HSBC Treasury Management Profiles 2018 -

Current section, Introduction

Introduction

The Swiss economy is built on strong financial services, high-tech industries and excellent infrastructure. It has a highly skilled workforce, low unemployment (3 per cent as of August 2017) and one of the highest per capita GDPs in the world. The country was ranked first in the World Economic Forum’s Global Competitiveness Index 2017. Switzerland’s economy is heavily reliant on exports; exports of goods and services account for nearly 63 per cent of GDP. It trades heavily with EU countries (Germany and the UK account for 14 per cent and 11 per cent of total exports respectively), the US (12 per cent of total exports) and China (9.0 per cent of total exports), and in 2016, exports reached a record high of CHF 210.7 billion. However, Switzerland has experienced slow economic growth in the aftermath of the global financial crisis, recording growth of just 0.9 per cent and 1.3 per cent in 2015 and 2016 respectively. In September 2017, weak growth (GDP grew 0.3 per cent year-on-year in Q2, below the estimate of 1.1 per cent) prompted the government to cut growth projections for the year to 0.9 per cent from 1.4 per cent, the lowest growth figure since 2009. A growth of 2 per cent is forecast for 2018. The strong franc has been blamed for economy’s sluggish growth; the Swiss National Bank ended its peg against the euro in 2015.

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Legal and regulatory

  • Foreign exchange and domestic currency (CHF) accounts can be held by residents both domestically and abroad. Resident domestic currency accounts are convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts can be held abroad and are convertible into foreign currency
  • There are no central bank reporting requirements
  • Switzerland is a member of the European Free Trade Association. It is not a part of the European Economic Area but has negotiated bilateral agreements with the EU

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Taxation

  • Resident companies are subject to taxation on their worldwide income
  • Non-resident companies are taxed on Swiss-sourced income only
  • The standard rate of corporation tax is 8.5 per cent at the federal level
  • Switzerland is a signatory to the Multilateral Competent Authority Agreement, under which information will be exchanged between tax administrations, giving a single, global picture on some key indicators of economic activity within multinational enterprises

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Payment instruments and systems

  • Credit transfers are used for both high-value corporate and low-value retail payment transactions. Cheque use is in terminal decline. Payment card use is rising, accounting for nearly 48 per cent of all payments in 2015. The MasterPass e-purse payment platform enables payment card holders to make online purchases via their PCs or mobile devices. SwissWallet is connected to MasterPass and can also be used by payment card holders for online purchases
  • SEPA covers all 28 EU member states, the four EFTA member states, Monaco, San Marino and Andorra
  • Switzerland operates the national payment system SIC, a TARGET2-linked RTGS system. SIC is divided into two subsystems: SIC for CHF payments and euroSIC for EUR payments. PostFinance operates a bilateral clearing system for retail payments

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Cash management

  • Domestic and cross-border notional pooling and cash concentration are permitted between resident and non-resident accounts
  • Automated collection methods are used by medium-sized and large businesses in Switzerland
  • Switzerland is a popular location for companies to set up their regional/global cash pool structures and treasury activities due its liberal regulatory environment, beneficial taxation policies and central geographical location

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Electronic banking

  • There is no bank-independent electronic banking standard in Switzerland
  • Internet and mobile banking services are provided by the country’s leading banks for both corporate and retail purposes. Electronic payments can be initiated online via SIX Payment Services’ Saferpay Secure PayGate solution

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To read the full report on Switzerland and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.

Sources:

  • State Secretariat for Economic Affairs
  • World Bank

The materials contained on this page were assembled in April 2017 (unless otherwise dated).

 

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