Location:Switzerland: the best formula not only for Formula 1
Michael Schumacher, the German world Formula 1 champion,has lived for several years in Switzerland. He is about to put roots down even deeper in the soil of the Confederation, moving with his wife and two children into a property recently acquired near Wolfhalden in the “Heidiland” of Appenzell.
He is in good company there with the Formula 1 Team Red Bull Sauber Petronas who is also located in Switzerland near Zurich. The choice of “location Switzerland” in his case had less to do with the relatively low rate of taxation in Switzerland than with such factors as an educational system of exceptionally high quality, a well developed transport and communication system with no shortage of international connections, and a quality of life that compares favourably with almost anywhere on the planet. Mr. Schumacher’s movements over the past few years have received much attention in the national and international media. Switzerland’s growing attractiveness for company relocations on the other hand is much less well known.
Multinational companies which for the past three decades or more have used Switzerland as a strategic base for their activities include such household names as Dow, DuPont, PepsiCo, Caterpillar, Rank Xerox, Shell and Motorola. A number of relatively new corporations have also chosen Switzerland as their European headquarters, including two companies active in the field of medical technology, the Micrus Corporation and Card Guard Scientific Survival Ltd. So has Omnexus, a very modern type of company which describes itself as a “neutral independent e-marketplace for the injection moulding plastics industry”.
New federal support measures
In the past five years Switzerland has been implementing a new policy and actively seeking foreign direct investments (FDI) rather than merely waiting passively for it to arrive. Until the mid-1990s FDI programmes were mainly the responsibility of the development authorities of Switzerland’s 26 cantons and 3,000 communes. And indeed these local authorities achieved impressive results and today continue to offer investor services which include site location, property acquisition, assistance with the arrangement of financing and work permits, as well as tax incentives. Development packages tend to differ from one region to the next, each authority having its own policy and approach, and of course each investment project has its special requirements.
What has changed in the past five years is that the federal government now provides tax and other financial incentives while acting as co-ordinator through an arm called the State Secretariat for Economic Affairs (seco). As well as a tax reform package other recent federal initiatives include relaxation of the laws governing foreign ownership of real estate and new regulations to help small-to-medium-sized businesses. Location:Switzerland is the name of the seco initiative that co-ordinates inward investment in co-operation with the cantons, Swiss embassies and consulates, and other interested parties.
The government also supports investment in key industries in collaboration with the private sector and Swiss schools of higher learning, notably the Federal Institutes of Technology in Lausanne and Zurich. These efforts focus on such areas as precision manufacturing, pharmaceuticals and biotechnology, where Switzerland has recognised strengths, although they are not limited to these fields. MedTech for example is a government initiative designed to encourage the universities, private laboratories and industry to work together in R&D projects, bringing together companies with similar interests.The aim is to create “skill networks” linking researchers and industries, accelerating knowledge and technology transfer, and strengthening the competitiveness of the companies concerned for years to come.
The Biotechnology Priority Programme, another government initiative, supports R&D projects in a wide range of biotechnology sectors that include pharmaceuticals, process technology, bioelectronics, bio-safety and neuroinformatics. While helping to develop networking in these fields the Programme pays special attention to the needs of small companies and encourages their involvement in large projects.Nearly 100 Swiss and foreign companies currently participate in the Biotechnology Priority Programme. Similar federal priority programmes provide funding for promising projects in the engineering science fields, notably optics, microelectronics, material sciences and nanosciences.
Such programmes have markedly improved overall framework conditions for businesses in Switzerland. Their success is beyond any doubt. According to the Swiss National Bank statistics, capital imports for new foreign direct investment in Switzerland amounted to 29.2 billion Swiss Francs (about 18 billion US-dollars) in 2000, up from some 3 to 4 billion Francs a year in the mid Nineties.
The many advantages of Switzerland as a business location
Switzerland offers many advantages to both companies and employees, be it in terms of the “bottom line” or the pure enjoyment of life. The attractions include a highly developed infrastructure, a qualified local workforce, a world class financial centre, excellent educational systems, research and development at the highest level, a wide range of services offered by both state and private institutions, a first class healthcare system and a quality of life second to none. Life in Switzerland is enriched by a great variety of cultural activities, beautiful, untouched landscapes and recreational areas that are within each reach of most locations. These are advantages that both Swiss and foreign companies consider important. This view of Switzerland is shared by their employees, and has been endorsed by a certain high-octane world champion.
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