Switzerland and the Greater Zurich Area are situated in the heart of Europe and offer international corporations and businesses some of the best operating conditions available. Highly competitive tax structures and liberal labor laws, plus a greatly qualified and specialized workforce suggest that Switzerland and the Greater Zurich Area are particularly suited to serve as a central gateway to the European and global market. Thanks to bilateral agreements with the EU, Switzerland is an ideal commercial hub for accessing the entire European market. Opening a branch in the Greater Zurich Area not only guarantees access to the Swiss domestic market with the world's highest purchasing power but also opens up the European market with 500 million consumers.

Switzerland is connected to the EU thanks to detailed agreements that guarantee free trade and the free movement of persons between countries. In July 2014, the free trade agreement between China and Switzerland has entered into force. 

So far, the agreement has brought many benefits to both the nations: the FTA not only improves mutual market access for goods and services, enhances legal security for the protection of intellectual property rights and bilateral economic relations in general, but also goes far beyond tariff dismantling by fostering cooperation in fields including science, technology, research, education and culture. But it has to be said, that the implementation process will take five to ten years. So the success story has just begun.

Nevertheless, there are indicators for 2014 already showing the first positive effects: From January to October 2014, the overall exports from Swiss companies to China increased by 11.2% (volume of CHF 7.5 billion), and the imports from China to Switzerland were increased by 7.7% (volume of CHF 10.0 billion).

China is already the largest purchaser of Swiss industrial products in Asia. The most important Swiss products exported to China include machinery, watches and instruments, as well as chemical and pharmaceutical products. Whilst 99.7% of China’s exports to Switzerland are duty-free since the FTA entered into force, tariff reduction periods of five to ten and, in some cases, as much as 12 to 15 years apply to Swiss exports (for instance fluid pumps, bottling machines, heat exchangers and industrial furnaces).

The excellent business relationship between China and Switzerland goes back to the mid-17th century and recently developed at a rapid pace. Switzerland was one of the first countries to enter into commercial agreements with China. The FTA amounts now to even stronger economic ties across the board for China and Switzerland. With China now the world’s second largest economy, as well as a key trading partner for Switzerland, the FTA is a monumental step forward. China buys more industrial products from Switzerland than any Asian country and third worldwide, following the EU and US. Today, China is by far the most important trading partner for Switzerland in Asia while Switzerland is China’s seventh largest trade partner and the sixth largest source of foreign investment in Europe.

And Switzerland is attractive to Chinese investors: The Economist just recently ranked Switzerland on seventh place in a ranking of Chinese direct investments abroad, making it the most attractive country in Europe to Chinese investors. Especially the Greater Zurich Area is an ideal location to set up a highly effective, successful and cost-efficient corporate structure with central management functions. Realizing these business models in the Greater Zurich Area guarantees Chinese corporations to tax-efficiently manage commercial operations in the European or global market under privileged tax regimes.

Welcome to the Greater Zurich Area!

By Dr. Balz Hösly

Dr. Balz Hösly is a renowned practitioner in strategic legal advice and corporate governance. He is chairman and member of several boards of directors and well versed in strategic corporate development issues. As a Certified Specialist SBA Inheritance Law he is expert in corporate succession and in international inheritance and estate planning for private clients. Balz Hoesly also focuses on live entertainment and e-commerce as well as on public governance and business models for public private partnerships (PPP).

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