Setting up a business in Switzerland? Here are 5 things to think about
Bordering France, Germany and Italy, and boasting world-leading tech and finance sectors, Switzerland offers some exciting opportunities for new businesses.
For all its beauty and dynamism, Switzerland is an expensive place to live and do business. Yet with high costs can come high rewards, with affluent customers right on your doorstep.
So if you’re tempted to set up a business in Switzerland, here are some things to think about before starting your international expansion.
Weigh up the pros and cons
With its highly educated workforce, efficient transport and renowned standard of living, Switzerland is an appealing place to start a business. To help you make a balanced decision and ensure Switzerland will work as a location for every aspect of your business, it’s important to assess the pros and cons.
For example, the high cost of living in Switzerland can be both a pro and a con when it comes to starting a business. The downside is real estate is expensive so you could be looking at costly leases on commercial property as well as high labour costs (more on this in the budget section below). The upside is your local audience will be made up of well-paid workers who have a good income to spend on your products or services.
Another potential stumbling block is the Swiss visa system. There isn’t a visa for people wanting to come to Switzerland to start a business and non-EU residents need to meet strict criteria to work on a self-employed basis – see the Swiss government website for more details. If your business is online and you aren’t planning on living in Switzerland then you can avoid the country’s strict immigration policies, just make sure you swot up on its import and export duties.
Budget for Switzerland’s high costs
Workers in Switzerland enjoy some of the highest wages in the world so you’ll need to factor this into your staffing budget. Even if you’re planning on keeping your initial team small, it’s worth thinking about early to ensure you plan for high salaries in any growth projections.
Real estate is relatively expensive too. If you need an office, store or warehouse for your business it’s worth doing some research to compare the rental costs in different Swiss cities and how competitive the market is. There’s good news if your business model is to purchase commercial property: while the Swiss government places restrictions on non-residents buying residential properties, there are no such restrictions on buying real estate for commercial use.
The high cost of living in Switzerland could also mean that you can charge more for your products or services than elsewhere in Europe. While budgeting for increased staff and property costs it’s also worth researching the prices your competitors command to see if you can improve your margins. You might find that a higher price point for your offering balances out increased running and production costs.
Research your sector
Switzerland attracts and nurtures some real innovators, with the technology, pharmaceutical, biotechnology and science sectors being big employers. If you’re thinking of establishing a tech startup you’ll be in good company, or with major pharmaceutical companies like Novartis having their headquarters in Switzerland, you’ll have some high-flyers as potential customers.
One digital sector that particularly thrives in Switzerland is crypto currencies. Zug is nicknamed “Crypto Valley” and is home to circa 200 blockchain companies. In 2016, the city of Zug became the first government in the world to officially accept bitcoin payments. The popularity of digital currencies could make Switzerland a good option for your online business.
Finance is also a key sector in Switzerland, with investment banks like Credit Suisse and UBS having offices there. If you’re thinking of setting up a business in the fintech sector then Switzerland could be a good fit, or if you’re an online seller you’ll have potential customers with real spending power.
- Open up to 20 local currency accounts, with local sort codes, account numbers and IBANs
- Collect secure payments from 130+ marketplaces, overseas buyers and payment processing gateways
- Pay suppliers, partners and staff in 40 currencies without hidden fees
- Pay and get paid easily with local bank details on your invoices
- Lock in conversion rates to manage your currency risk
Research the markets
Any new business needs an online presence, be it on social media or your own dedicated website. If you’re planning on selling products in Switzerland then having a store on an online marketplace can be a fast and cost-effective way to reach a wide audience.
The market share of online marketplaces in Switzerland is potentially more fragmented than elsewhere in Europe so it’s really worth researching which platforms your target audience use. For example, Swiss shoppers use the German, French and Italian Amazon websites, so the best one for your business depends on if you’re targeting German, French or Italian speaking Swiss, or all three.
Other popular platforms in Switzerland include: Ricardo, Tutti, eBay and Anibis. Weigh up whether you want a presence on all of these marketplaces or if you’re better focusing on one or two that complement your product and target audience.
Select your city
For a relatively small country, Switzerland has 26 distinct districts called cantons. Add to this the influence of their French, German and Italian neighbours and you’ll find a wide variety of business opportunities, landscapes and lifestyles across Switzerland.
Geneva has a place on the world stage as it’s home to the headquarters of international organisations such as the United Nations, the Red Cross and the World Health Organisation. Setting up in this vibrant city could be a good option if international connections are important to your business.
Zurich is the largest city in Switzerland and has a thriving financial services sector. With both the Alps and Lake Zurich nearby, the city could be a stunning setting for your next business venture.
Basel is located close to the Swiss border with France and Germany so is a good location if you plan on doing business in all three countries. It’s the home of Switzerland’s biggest convention centre and hosts major international trade fairs.
The best Swiss location for your business will depend on a number of factors including costs, nearby competitors, your target audience and workforce.
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