Switzerland continues to be an attractive hub for foreign businesses wishing to expand their businesses beyond their geographic regions. Most of these companies are looking to get into the European market, and they view Switzerland as the gateway to the continent. The main reasons for this phenomenon include:
- Currency stability
Switzerland’s currency is viewed as highly stable, a very attractive characteristic for companies seeking to expand their business operations to this European nation. A stable currency is important for businesses because they can predict the cost of importing raw materials, and plan their budget accordingly. Companies are also in a better position to know how much money they will make when they export their products.
Every business expert will tell you that a turbulent currency will have negative consequences on the cost of doing business in a country.
In addition, you are more likely to attract more investors if you are conducting business in a country with stable currency such as Switzerland.
- Price Stability
Price stability is also critical to the success of a business, especially one that is operating in a foreign environment. With price stability in a country, the business does not need to worry about prolonged periods of inflation or deflation, which can have adverse effects on the business’s price and profit margins. High levels of inflation makes purchasing raw materials used in production expensive, and this cost is transferred to your customers through higher prices for the products that you sell. Higher prices will lead to lower demand for your products, and this can significantly decrease your sales and revenue.
On the other hand, prolonged deflation can also impact your business negatively as you will have to set lower prices for your products. This will definitely cut your profit margin, and in some cases also lead to heavy losses.
Hence, it is imperative that when relocating your business to a foreign country, ensure that prices are fairly stable. Switzerland is a very good example of such a country.
- Pro-business government policies
Favourable and flexible laws that govern corporate tax, labour market, and employment in the country are also a major reason for the continued rise in foreign countries setting up shop in Switzerland. Such a pro-business legal environment makes it easier and affordable for foreign businesses to register and establish their operations in the country.
In addition, the business-friendly employment laws ensure that foreign companies do not experience restrictive measures when it comes to hiring from the country’s highly skilled labour market. There is also very little government interference in the labour market, which is another plus for foreign companies seeking to take advantage of this highly advanced skills’ pool.
- Low tax rates
One of the most crucial factors in setting up a business in a foreign country is the number and amount of taxes that the company will have to pay for doing business in that country. High number of taxes as well as high tax rates can make a country unsuitable for foreign business relocation. This is not the case with Switzerland, as the number of taxes payable by businesses, both local and foreign, are few in comparison to other Western nations. In addition, low tax rates continue to be attractive to foreign businesses. Lower tax rates often guarantee higher profit margins, as well as the ability to remain competitive for the long-term.
Business relocation to Switzerland will prove to be a prudent business decision because of all of the points noted above. A stable currency, pro-business legal environment, low tax rates, and price stability are all essential to a thriving foreign business, and you can expect to find all these and much more when you decide to relocate your business to Switzerland.