Switzerland: Country and Foreign Investment
Economy and Currency
Switzerland's economy consists predominantly of low-bulk, high-value, service-orientated, export-driven activities utilizing a highly skilled, highly paid workforce. Among the factors which have moulded the development of the Swiss economy are the advantage of being strategically located on international trade routes, a shortage of raw materials and natural resources (other than hydro-electric power), economic pressure on land leading to high rentals, and the inability of the domestic market to absorb the total output of a skilled and efficient workforce. Thus, Switzerland's major industries include tourism, the provision of banking, insurance and financial services, watch-making, precision instrument manufacturing and chemical manufacturing. Some companies export virtually all their production.
As the world's predominant private banking center Switzerland is estimated to be the home of 35% of the world's private wealth. Banking secrecy and Switzerland have long been considered synonymous terms, although the country has passed many laws directed against money laundering, and participates fully in international efforts against it (see Other International Agreements). GDP was USD46,200 per head in 2012 (estimated), at purchasing power parity. Apart from 2009, the economy has grown steadily each year: 1.8% in 2004, 1.9% in 2005, 2.7% in 2006, 3.3% in 2007 and 1.9% in 2008, -1.9% in 2009 (est), seeing a return to growth in 2010 with 2.7% (est), an estimated growth of 1.9% in 2011 and 1% in 2012. The World Economic Forum's Global Competitiveness Report 2011-2012 ranked Switzerland in first place, followed by Singapore, Sweden, Finland and the US.
Switzerland remains the country with the highest quality of living according to a survey designed to help governments and multinational companies place employees on international assignments.
There are no exchange controls in Switzerland. The Swiss Franc (CHF) is fully backed and is one of the world's strongest currencies. It has appreciated 300% against the US dollar since 1974, a factor which encourages international investors to locate their assets in this country.
An umbrella group representing the Swiss investment and banking industry published a document dubbed 'Vision 2015' in September 2007, which outlines a joint strategy to put Switzerland among the top three centres of international finance.
The growth targeted by the document would create between 40,000 and 80,000 new jobs, and generate CHF11-17 billion in additional new tax revenues, depending on economic trends and how successfully the strategy is put into practice.
The strategy was announced on September 13, 2007 by the Swiss Bankers Association (SBA), the Swiss Insurance Association (SIA), the Swiss Funds Association (SFA) and the companies responsible for Switzerland’s financial infrastructure, including SWX Group, SIS Group and Telekurs Group.
Specific measures with regard to taxation, regulation and institutions have been drawn up for individual industries, and will be put forward for debate in the political arena.
The groups noted that the finance industry is the most important sector of the Swiss economy, accounting for almost 15% of gross domestic product (GDP) and 16% of total tax revenues.