Next year 8,000 permits can be dished out to non-EU workers (3,500 B permits and 4,500 L permits), 500 more than in 2017, news agency ATS reported on Wednesday.
The news will be a relief to several cantons that earlier this year demanded an increase in permits, saying the low number available was damaging to businesses.
Unlike foreigners arriving in Switzerland from the EU, who have the right to work here under a bilateral agreement granting free movement, workers from outside the EU – so-called third states – are subject to quotas.
However after the 2014 anti-immigration vote, the Swiss federal government reduced the quota of third-state permits for 2015 and 2016 by a quarter.
The number of permits was raised for 2017 but still fell short of 2014 levels.
In a joint letter to the government in August, the cantons of Geneva, Basel-City and Zurich – which together make up a third of Switzerland's economy – said they had used up their quota of permits by the end of the first trimester of this year and demanded the number be increased.
“The low level of quotas leads to uncertainty for the authorities and businesses, which isn't favourable to our economic development,” they said.
While domestic and EU workers make up a large part of the workforce, companies must be able to call on workers from third states, particularly specialists in research and development, added the letter. If not, there would be an “increased risk that projects will be moved abroad or that companies decide not to come to Switzerland”.
The government's announcement on Wednesday goes part way to meeting their demands, but still falls short of the 8,500 permits requested, which would have meant a return to 2014's levels.
Cantons that run out of permits can also ask another canton to hand over some of its own allocation, it said.
There are currently 2.1 million foreigners in Switzerland, a quarter of the total population.