Swiss companies invest more in their foreign subsidiaries

Swiss companies invest more in their foreign subsidiaries Keystone-SDA

In 2023, Swiss-companies invested more money in their foreign subsidiaries than they withdrew for the first time since 2018.

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In total, companies based in Switzerland invested CHF49 billion ($54.8 billion) in their subsidiaries abroad last year, as the Swiss National Bank (SNB) announced on Friday. By comparison, they withdrew CHF71 billion in 2022 and CHF111 billion in 2021.

According to the SNB, investment activity saw two contrasting developments. Companies from industry and the services sector – excluding foreign-controlled finance and holding companies – invested significantly more abroad than in the previous year (CHF92 billion). In contrast, foreign-controlled finance and holding companies further reduced their direct investments abroad by CHF43 billion.

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Swiss companies focused mainly on Europe, where they invested CHF59 billion. Outside Europe, Swiss direct investments flowed mainly to the United States (CHF15 billion) and Asia (CHF7 billion). In Central and South America, on the other hand, Swiss-based firms reduced direct investments (by CHF23 billion).

In total, direct investments abroad amounted to CHF1,288 billion (2022: CHF1,319 billion). Finance and holding companies had the largest capital stock abroad (37%).

Funds withdrawn from Switzerland

Meanwhile, investors from abroad once again withdrew funds from Switzerland. However, the loss (CHF49 billion) was slightly lower than in 2022, when it amounted to CHF63 billion.

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Finance and holding companies (-CHF40 billion) saw the largest outflows. This trend has been observed since 2018, according to the SNB. In total, they amounted to CHF560 billion from 2018 to 2023.

However, foreign investors also withdrew funds from Switzerland from trading and industrial companies in 2023. Inflows remained the exception, according to the SNB. Both the insurance sector and transport and communications firms recorded these inflows.

Overall, foreign direct investments in Switzerland amounted to CHF930 billion last year. The lion’s share (96%) was equity capital. The remaining 4% were corporate loans.

Number of employees rises slightly

The Swiss companies surveyed by the SNB reported that they controlled around 21,200 subsidiaries abroad. They employed roughly 2.5 million people, which is slightly higher than the 2.3 million of the previous year. In turn, turnover fell to CHF869 billion from CHF902 billion the previous year.

They are also major employers in Switzerland. The number of employees rose slightly to 556,000 in 2023.

Translated from German by DeepL/sb

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