Multinationals fear for Switzerland as a business location

Clouds over Zurich: most multinationals are pessimistic for the future of Switzerland as a business location Keystone

Foreign multinationals that have chosen to settle in Switzerland for its business-friendly qualities are beginning to worry, according to a survey by consultants KPMG. A majority think the country’s attractiveness is threatened.

This content was published on November 15, 2016 - 16:40 and agencies, and agencies

One of the main reasons multinational companies move to Switzerland is the tax regime – seven out of ten said the attractive tax system was why they set up shop in Switzerland. Most enjoy a special tax status.

However, only 42% of the 850 companies questioned by KPMG thought the tax system would remain an advantage for Switzerland in the future.

In addition the high salary costs for mid-level managers and the strong franc were also seen as a challenge and a concern.

The surveyExternal link found that high salaries don’t present a problem as long as the employment law remains liberal and flexible – and in this respect virtually all respondents said Switzerland was superior to all other European countries.

However, this is exactly where respondents saw dangers for Switzerland as a business location. Less than half of respondents (47%) thought Switzerland could maintain this advantage over the next three years.

Almost 30% believed increased employment regulation would hamper business activity in Switzerland. A particular headache for employers would be the tracking of working hours.

Immigration initiative

Negative consequences were also expected in connection with the implementation of a 2014 initiative calling for limits on migration from the European Union.

This has had a palpable effect on the attractiveness of Switzerland for qualified foreign workers, according to the authors of the KPMG study. These workers were instead being tempted by countries such as Germany and the United States.

An additional area in which respondents expected Switzerland to lose ground in the near future is innovation.

Only 44% thought their company would become more innovative as a result of being in Switzerland.

What’s more, only 30% believed Switzerland, with its universities and technical colleges, would enjoy a significant locational advantage in the future. 

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