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How does being in EFTA and Schengen benefit people in Switzerland?

Helena Bachmann
Helena Bachmann - [email protected]
How does being in EFTA and Schengen benefit people in Switzerland?
Schengen and EFTA do have their advantages for Swiss citizens. Photo: Pixabay

Switzerland is not a member of the European Union but it does have other agreements in place that give certain benefits to its citizens.


While the country has steadfastly stayed out of the EU, its government has been pragmatic enough to realise that it can’t remain completely ‘neutral’ and miss out on all the perks that other European citizens take for granted — specifically, the Schengen area and EFTA (European Free Trade Association).

Let’s look at Schengen first

This treaty allows citizens of 27 European nations the free movement of people among participating countries.

Most of the Schengen countries are EU members, with only Switzerland, Norway, Iceland, and Liechtenstein — all of which belong to EFTA (read more about this below) — not in the European Union.

How did Switzerland get into Schengen?

Again, chalk it down to pragmatism.

Given its location right in the middle of Europe, and surrounded by EU-member states, Switzerland would be totally isolated if it did not join the borderless zone.

Therefore, the government signed a bilateral agreement with Brussels but, as any new legislation, it had to be approved in a referendum before going into effect.

As often happens when Switzerland seeks closer ties with the EU, the right-wing Swiss People’s Party (SVP) opposed the move.

However, it was approved by 55 percent of Swiss voters in 2005, and on December 12th, 2008, Switzerland formally joined Schengen


What are the benefits of this membership for residents of Switzerland?

Simply put, it allows anyone who is in Switzerland legally to enjoy hassle-free travel to and from the 26 other Schengen states, visa time limits permitting.

Travellers arriving into Switzerland for the first time from a non-Schengen state like the UK or the US will have to queue up to have their passports checked, but after that they can move freely.

That means Swiss citizens, EU nationals, non-EU international residents in Switzerland, tourists, exchange students or people travelling for business can travel on to another Schengen member state, perhaps neighbouring France or Germany by car or train, without having to show their passports. (Although occasionally checks are brought back.) 

That is a definite ‘plus’ for anyone who travels within Europe. Due to Switzerland having so many land borders with other Schengen countries it would have been hugely problematic not to join.

What about EFTA?

The four countries that opted to stay out of the European Union (Switzerland, Norway, Iceland, and Liechtenstein) belong to the European Free Trade Association, known as EFTA.

Its main goal is to promote free trade among the four countries and with the EU.

One feature of EFTA is that, in contrast to the EU, its four member states are economically prosperous, as well as expensive  — though none as much as Switzerland.

But since the EU, and primarily Germany, are Switzerland’s main trading partners, EFTA doesn’t carry quite as much weight overall.

There is, however, another advantage as well: its citizens can live and work in the each other’s countries without a visa, with work permits being granted easily (just as is the case for the EU, which Switzerland has a Free Movement of Persons Agreement).

But in terms of residency, Swiss nationals draw less benefit from EFTA than vice-versa.

Take, for instance, Norwegian citizens.

While only about 2,800 Swiss live in Norway, around 5,000 Norwegians have moved to Switzerland

The reason is simple: taxes.

Since tax rates in Norway are much higher than in Switzerland, dozens of wealthy Norwegians have moved to Switzerland in recent years.

READ ALSO: Why do rich Norwegians flee to Switzerland? 

So it is fair to say that one of EFTA’s benefits — in particular the freedom of movement — is that wealthy citizen of that country bring significant tax revenue to Swiss cantons where they live.


And what's the deal with  Liechtenstein?

The tiny principality is one EFTA member that is most like Switzerland: its residents speak Swiss German and use Swiss franc as a currency.

Of the four nations it is also the only one that looks most like rural Switzerland — especially when it’s dark and raining, and it is difficult to distinguish one nation from another.

So much so, in fact, that the Swiss army even ‘invaded’ it on three occasions because they mistook Liechtenstain for Switzerland.

READ ALSO: How the army attacked Liechtenstein three times — by mistake


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