Switzerland Is Much More Than Just an Alpine Country

In Switzerland, Businesses Are Treated as Customers by the Tax Authorities

Patrick Vergult founded curaVer in 1999, a Swiss-based consulting company that assists foreign businesses with establishing and expanding their operations in Switzerland.

“I founded my own software company in Belgium in 1991. During the 1990s, I was involved in several projects in Switzerland, and over time I developed a strong connection with the country. After successfully resolving a tax dispute with the Belgian tax authorities, I decided to relocate to Switzerland permanently. That experience ultimately led to the creation of curaVer. Today, we specialize in supporting foreign companies that want to establish and grow their business in Switzerland.”

What Is his most important advice for foreign SMEs considering the Swiss market?

“The first step is to clearly define your objectives. Entering the Swiss market to sell products or services is fundamentally different from relocating your company’s registered office to Switzerland. If your goal is market entry, you should not underestimate the cultural differences. Swiss people are generally reserved and communicate in a very indirect manner. If they dislike something, they are unlikely to express it openly. Many Belgian and Dutch entrepreneurs mistakenly compare Switzerland with Germany. In reality, the relationship between Swiss and Germans can be compared, to some extent, to that between Belgians and Dutch people. One of the greatest advantages of doing business in Switzerland is the exceptional payment discipline. Invoices are usually paid on time, and throughout my career I have rarely experienced payment issues. Relocating a business to Switzerland is a different matter altogether. Switzerland offers an exceptionally attractive business environment—not only because of its tax system, but also because of the constructive relationship between businesses and government authorities. The Swiss tax authorities genuinely view businesses as customers and treat them accordingly.”

Switzerland Offers an Outstanding Business Environment

If you are considering expanding your business into Switzerland, you will quickly discover that the country offers a wide range of opportunities, particularly for small and medium-sized enterprises (SMEs). At the same time, Switzerland has its own legal, economic, and cultural characteristics that should be understood before entering the market. Below are several important aspects that Belgian and Dutch businesses—and international companies in general—should be aware of.

Switzerland and Economic Stability

Unlike many other European countries, Switzerland has weathered recent financial and economic crises remarkably well. While economic growth slowed during certain periods, the country remained comparatively stable thanks to its strong economic fundamentals. Because the European Union and the United States are Switzerland’s most important trading partners, the Swiss government has consistently taken measures to preserve favorable conditions for businesses. For example, in 2011 the Swiss National Bank introduced a temporary exchange-rate floor against the euro to protect Swiss exporters from an excessively strong Swiss franc. Switzerland also expanded its short-time work program (Kurzarbeit), enabling companies to respond more flexibly to economic downturns. Additional measures were introduced to support domestic consumption. Switzerland also benefits from relatively low inflation, supported by a strong national currency and a sustainable energy mix. Nearly 60% of the country’s electricity is generated by hydropower, while nuclear power plants supply approximately one-third of total electricity demand. As a result, Switzerland is significantly less exposed to rising oil and natural gas prices than many other countries.

Federalism and Regional Differences

Switzerland consists of 26 cantons and four linguistic regions. Each canton enjoys a high degree of autonomy and has its own tax regulations and, in some areas, its own legislation. Fortunately, these differences rarely create significant obstacles for foreign businesses. German-speaking Switzerland is the country’s economic powerhouse. Basel is internationally recognized for its pharmaceutical and chemical industries, while Zurich is Switzerland’s leading financial center and home to major banks, insurance companies, and advanced manufacturing businesses.
French-speaking Switzerland is centered around Geneva, which hosts the European headquarters of the United Nations and serves as the country’s second most important financial center. Both Zurich and Lausanne have developed into internationally recognized technology and innovation hubs. In the Italian-speaking region, Lugano has established itself as an important financial center.

Switzerland Is Not Part of the European Union

Switzerland should not be regarded as an extension of Germany or France. Although Switzerland maintains numerous bilateral agreements with the European Union, it is neither a member of the EU nor of the European Economic Area (EEA). Companies should therefore take customs duties and import regulations into account. Businesses operating in the food industry must also comply with particularly strict import requirements. It is equally important to recognize that Switzerland is not one homogeneous market. Business practices in the German-speaking part of the country differ from those in the French-speaking and Italian-speaking regions.

Cultural Differences

Many Swiss companies have an open organizational structure, where collaboration and consultation are encouraged. It is not uncommon for executives to maintain close contact with employees and regularly visit operational departments. However, despite this collaborative culture, conflicts are generally addressed indirectly rather than through open confrontation. Swiss professionals often prefer to avoid conflict instead of addressing disagreements head-on. This differs considerably from countries such as the Netherlands or the United States, where direct communication is more common. The Swiss proverb “Speech is silver, silence is golden” accurately reflects this mindset. Labor strikes are also relatively rare in Switzerland.

The Swiss Business Climate

The Swiss labor market is characterized by a high degree of flexibility. Thanks to consistently low unemployment—typically between 2.5% and 3%—both employers and employees benefit from favorable labor market conditions. For companies entering Switzerland, it is also important to understand that building local networks and becoming well integrated into the business community are essential for long-term success. Swiss consumers value products and services of exceptional quality. The Swiss Made label continues to enjoy an outstanding reputation, while innovative products and services are generally well received. Switzerland has one of the highest levels of purchasing power in the world. As a result, purchasing decisions are often driven less by price and more by quality, reliability, and outstanding customer service.

Do

• Always arrive on time and well prepared for business meetings.
• Address your business partners by their professional title and last name until invited to do otherwise.
• Focus on quality, expertise, and added value rather than competing primarily on price.

Don’t

• Avoid overly theatrical or exaggerated behavior, as it is generally not appreciated.
• Avoid asking overly personal questions.
• Do not assume that Switzerland is one uniform market—always consider its regional and cultural differences.