The United States and Switzerland have a long-standing business relationship.
The United States and Switzerland have been allies since 1853, shortly after Switzerland became a unified state. There are several political, economic, law enforcement, and trade agreements between the two countries, and they enjoy a close relationship of mutual support and cooperation.
Switzerland is one of the wealthiest countries in the world per capita and the US is the largest economy in the world. Switzerland is perennially recognized as one of the most competitive economies in the world. The diversity of the Swiss economy is impressive; they have a large pharmaceutical industry and financial services sector. Manufacturing is the most important economic driver, with chemicals, machines and electronics, precision instruments, and watches leading the list of exported goods. One of the most important ways to promote economic competitiveness is to attract foreign investment. Switzerland has done so, with 39 percent of Swiss companies owned by Swiss citizens, 33 percent owned by North Americans, and 24 percent owned by Europeans.
Investment and exports flow both ways
Switzerland, a country of only 8 million people, is the 6th largest investor in the United States, with 700 companies employing more than 500,000 Americans.
The Swiss government and economic authorities actively encourage and promote exports to every country in the world, particularly the United States, with an economy that is largely consumption-based. The Swiss Business Hub USA, part of the Consulate General of Switzerland, with four offices throughout the US: “provides localized support, market information, consulting and networking services to Swiss companies venturing into the US market. An experienced team of trade commissioners stands ready to support inquiries of all kind and serves as a first-hand local contact for companies – new and experienced – in the US market.”
The attraction of Switzerland for American companies is political and labor stability, high per capita wealth, low taxes, an educated workforce, and access to the European market without having to adhere to EU rules and regulations. While Switzerland has a tight labor market, it is possible to recruit workers from other European countries allowed to work in Switzerland under Swiss law. Americans are accustomed to working in a diverse environment, and the Swiss culture is a combination of French, German and Italian cultures that blend together in a unique way, which is closer than many European countries to the American model.
While the country’s famous banking secrecy laws were attractive to some but corrupting to others, in recent years foreign governments have pressured Switzerland on banking confidentiality. Now the Swiss Tax Authority sends an annual accounting of all US citizens with accounts in Swiss financial institutions to the US Department of the Treasury, and FATCA regulations require that financial account information of US non-residents with a connection to the country must also be forwarded to the IRS.
The most common form of business structure used by foreign companies in Switzerland is the share corporation. The laws and litigation resources for business disputes in Switzerland are well developed. In fact, the world’s largest arbitration organization, the Swiss Chambers Arbitration Institution (SCAI), has developed well-recognized rules and procedures for settling business disputes without civil litigation. This makes Switzerland an even more attractive location for an offshore business; two companies can work out their disagreements while still working together and continue their business partnership after the dispute has been resolved, something unlikely if not impossible in an adversarial process. Business arbitrations also generally take much less time to resolve and cost less. While any company from any country can take advantage of SCAI, Swiss attorneys and arbitrators have experience with SCAI and can assist in shaping a successful process for all parties concerned.