Switzerland: Country and Foreign Investment
This page was last updated on 7 April 2021.
Switzerland is a federal state made up of 26 sovereign cantons, six of which are sometimes styled ‘semi-cantons’. These are subdivided into more than 3,000 political communes, autonomous self-governing bodies that have legal personality. This complex combination of multiple sovereign bodies is reflected in the Swiss legal and taxation system and has led to political and administrative responsibilities being split between federal, cantonal and municipal levels of government.
The rights and duties of citizens and governing bodies are set out in the 123 articles of the federal constitution of 1848-1874. The principal federal organs of government are the Federal Assembly, the Federal Council and the Federal Supreme Court. The responsibilities of the Federal Government include the supervision of external and internal security, foreign and military affairs, transport, forestry, water conservation, telecommunications, the monetary system, social security and the uniform administration of justice in areas of civil and criminal law.
Legislative power rests with the bicameral Federal Assembly, which comprises the National Council consisting of 200 deputies elected every 4 years by a system of proportional representation, and the Council of States in which each canton is represented by 2 deputies. Executive power rests in the Federal Council, a 7-member board consisting of elected deputies each of whom presides over a federal department.
Although each canton elects and maintains its own magistracy for ordinary civil and criminal trials, ultimate judicial power is vested in the Federal Supreme Court based in Lausanne. The Swiss Civil Code of 1912 has served as a model for the administration of justice in many countries and has often been copied verbatim. The difficult task of creating a uniform judicial system with so much diversity in the national structure has produced a large number of jurists of international repute.
Switzerland has a long historical tradition of neutrality and is not a member of NATO or the European Union. However, it is a member of the OECD, the WTO, and the European Free Trade Area (EFTA), and has acceded to large parts of the acquis communautaire, the body of EU law, particularly in areas connected with trade and the economy.
Swiss separateness is gradually yielding in the face of globalisation. In 2002 the Swiss voted in favour of joining the United Nations in a referendum, and the country's gradual progression towards EU membership continues despite problems with harmonising tax. A first set of 'bilateral agreements' with the EU came into force on 1st June 2002, and a second set, signed in June 2004, came into force in 2005.
In considering its options in its relationship with the EU, Switzerland is expected to mull at least five choices: maintain the status quo, pursue a "consolidated bilateral route" which would strengthen institutional cooperation, advance a multilateral form of cooperation, an EU 'lite' membership which would permanently exempt Switzerland from certain EU decisions and full membership.