Switzerland was recently named the world’s most innovative country, topping the Global Innovation Index for the seventh consecutive year. The index commended Switzerland for the environment it provides for growing businesses and the nation’s ability to transform resources into innovations. So how has Switzerland become such an attractive environment for an investor?
My first job was at a multinational company near Geneva and one thing has remained constant throughout my business experience – Switzerland’s status as a safe haven for investments.
Its consensual form of government and politically savvy electorate ensure an immense level of political stability. It has a highly business-friendly regulatory environment with a transparent and fair legal system. It therefore comes as no surprise that around 2,000 global corporates are headquartered in this alpine nation, with some of the world’s leading multinationals – including food giant Nestlé, drug maker heavyweights Roche and Novartis, and engineering juggernaut ABB – providing a solid bedrock for economic activity.
The Swiss franc is one of the world’s strongest and most stable currencies, and its independence has proved critical during turbulent times, including throughout the eurozone debt crisis that has been afflicting its neighbours since 2009. Swiss policymakers are prudent financial stewards and have little tolerance for inflation. This remarkable level of stability makes Switzerland one of the safest places to do business.
The Roche tower in Basel's cityscape. Photo: olli0815/Depositphotos
You would be forgiven for thinking that the country’s mature, low-risk market status makes it little more than a ‘safe pair of hands’, when Switzerland is in fact one of the most dynamic business environments in the world.
As evidenced in its Global Innovation Index supremacy, Switzerland is an exciting place to start, grow and develop cutting-edge companies. It is home to a highly skilled and educated workforce and has the highest per-capita spending on IT products in the world, making it a great testing ground for the introduction of high technology. Spearheaded by world-leading pharmaceutical and engineering sectors, Switzerland is one of the most advanced countries for R&D.
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I am an investor in Roth Gerüste, one of the country’s best-regarded construction manufacturing companies, and the stable macroeconomic backdrop and highly qualified workforce allow us to preserve and grow this business, with compound annual turnover growth over five percent over the past few years.
The country’s chocolate box landscape of mountains and valleys provides a fertile testing ground for some of the world’s most innovative construction techniques and the highly developed internal market reduces exposure to volatile economic developments on the global level.
Switzerland’s unique federal system of cantons is a boon to competitiveness, with the 26 cantons allowed to set their own foreign investment attraction policies.
Many cantons offer foreign investors numerous tax incentives to attract companies to establish operations and invest in their jurisdictions. This internal competitiveness is mirrored by an outward-looking heritage of international trade.
Businessman Javad Marandi. Photo: Javad Marandi
Switzerland’s strategic location at the heart of Europe has made it a commercial crossroads for centuries and acts as a gateway to European markets. World class infrastructure, including the 57-kilometre Gotthard Base Tunnel that opened last year, facilitates trade between Europe’s largest economies and has helped to make Switzerland one of the continent’s logistics hubs.
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Logistics is another of the sectors in which I have invested and see huge long-term potential. My commercial warehouses sit to the north of the country on the Swiss plateau and their positioning in Switzerland make them one of my safest long-term investments. The transport infrastructure hub lies on the doorstep of Germany and France, the two central players in Europe’s revived economic powerhouse, so we are confident about the outlook for the business over the coming years.
Highly-skilled, multilingual population
Finally, one of the most attractive factors of Switzerland is the Swiss people themselves. Aside from forming one of the most highly-skilled populations in the world, the Swiss are sophisticated, cosmopolitan people. They are traders at heart, multilingual and very used to working with international investors.
Business is a very serious affair in Switzerland, which makes investing simple and straightforward. Throughout my years of doing business in the country, I have learned that the Swiss are tough but fair negotiators. Business discussions are methodological and cautious, so while decision-making can take longer than in other countries, the outcome is always very precise.
It is important to be very punctual and well prepared for business meetings and to take note of the key decision makers as Swiss business culture has a deeply entrenched hierarchy.
Ultimately, this style of doing business – along with Switzerland’s stable, innovative and competitive environment – means that the tiny Alpine nation will remain a firm favourite for investors in search of growth opportunities for years to come.