Pros And Cons Of Starting A Business In Switzerland
by Arnab Dey Starting a Business 03 February 2023
The desire to start a business in Switzerland is understandable since this country is known all over the world for its prevailing advantages over disadvantages.
A stable economy, beautiful mountainous terrain, and the reputation of being the safest country in the world with a low crime rate and gender equality have always attracted different businesses. Further, we will look through some of the most evident business startup pros and cons in the country.
Benefits of performing business in Switzerland
High-rank education. The country generates only skilled and dedicated graduates and teachers in educational institutes are the best in the world. There is one more feature about education in Switzerland – local people really believe in the power of education and do not look twice at every rappen when it comes to education.
The selection of students is an unbiased procedure at any local university. This particular feature brings about quick trade and business development in the country. There are about sixty higher education universities. Four of them are globally renowned.
Highly developed transportation and telecommunication systems. The road network is sophisticated and at the same time, comprehensible. Movements from one town to another are fast, safe, and memorable. Industries with respect to research, pharmacy, and biotechnology prosper.
Geographic location
Switzerland is the heart of Eurozone countries. Practically all of them, and especially France, Italy, and Germany, are within several hours of driving. This fact causes foreign countries to do their business in Switzerland since its location is very suitable for foreign trading.
Priority in science
The research sector accounts for almost 3% of the gross domestic product. In terms of science and health care, it makes the country to be the top among leading countries in the world and attractive to any prospective investor.
Tax policy
Switzerland is among the first twenty countries in the world that have the best business-related tax policies. Company income tax is low-rated.
Population amount
The number of inhabitants is quite remarkable. The density of the population is about 207 persons per square kilometer which make up a total of 8.6 million people. The excessive number of residents attracts trade markets and investors.
Expansion of business here proves to be easy and quick since the high power of consumption always demands more and more goods and services, including articles of luxury. Moreover, as a consequence of the large workforce, many top businesses consider the country attractive for investments and new enterprises.
Low risks
Support from the government and economic prosperity inspire many entrepreneurs to start almost any business. Once it starts, it will develop gradually and smoothly without serious challenges.
Modern and high-tech infrastructure
Modern and high-tech infrastructure creates comfortable facilities to start your business. A large number of business parks, sites, and hubs are ready to welcome all those newcomers who are willing to start any business. The electricity and water supply networks are compatible with all contemporary requirements.
Tourism
Millions of tourists visit Switzerland on a regular basis. People mostly visit places of interest such as the Matterhorn, Jungfraujoch, Interlaken, St.Moritz, lakes Geneva, Lugano and Ticino, chateau de Chillon, and Lucerne.
Famous mountain ski resorts, environmentally clean food, and air strike the eyes and encourage the attention of many people, including millionaires who prefer Switzerland not only for business trips but for vacations as well. Many of them make up their minds to purchase real estate. Consequently, it boosts the production of luxury commodities and associated goods together with indirect export and foreign currency conversion.
In general, Switzerland is famous for the following advantages: asset protection, tax optimization, corporate structuring, anonymity and bank secrecy, strong governmental and non-governmental international institutions located in Switzerland, loyal and transparent authorities, a crypto-friendly country (in some cantons, you can pay governmental fees or taxes in cryptocurrency), avoiding double taxation with many countries, and stable currency.
Disadvantage
The main disadvantage of business in Switzerland is to start it. Many startups may encounter many obstacles on their way that sometimes turn out to be somewhat challenging. The procedures of preparation and management of all required documents, together with the opening of your bank account, take a good deal of time.
Many other issues are also time-consuming and must be indispensably taken into consideration. Many inspections conducted by government representatives are performed for the legalization and approval of documents.
A decent number of various procedures must be taken into account once you decide to start your own business in Switzerland. In general, all drawbacks are related to time matters, which are solved with the help of special companies that deal with them.
Drawbacks of performing business in Switzerland
Local citizens are not very interested in starting their own businesses. The reason for it is that local businesses require people to have the appropriate educational background and high management skills. The study of entrepreneurship is not popular among the local population, which consequently brings about a lack of interest in any sort of enterprise.
The System Of Hierarchy
The system of hierarchy used to be before in the country but now it is famous for its liberal policy. Foreigners have the same privileges as citizens of Switzerland. At the same time, any Swiss lawyer will remind you that every registered company here must have a local citizen on the board of directors or just act in higher positions and perform representative functions. There are certain law firms that can provide you with nominee services, and you will be able to manage the business by yourself.
Expensive
The long list of benefits that reflect the Swiss lifestyle has the other side of the coin. Living in Switzerland is expensive. It requires a very careful arrangement of your savings and expenditures unless you want to find yourself bankrupt. This disadvantage can be easily avoided when you live beyond Switzerland since nowadays you don’t have to live in the country or be its resident to run your business.
Annual Accounting Statement
Switzerland is very strict when it comes to annual accounting statement preparation and tax declaration. The processes of bank account opening and arrangement of all necessary documents require a good deal of time.
Conclusion
The government needs a long time to inspect and approve all documents that you apply for to open your business. Many procedures and issues need to be taken into consideration while arranging your startup. Stringent business behavior and strict dress code.
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