U.S. multinationals are increasingly moving their European regional headquarters to Switzerland from other parts of Europe to take advantage of the country’s favorable tax regime, according to Swiss government representatives visiting Atlanta last week.
U.S. defectors to Switzerland in the last year include Colorado‘s Fischer Imaging Corp., which moved its headquarters to Zurich from London; John Deere International GmhB, a subsidiary of Illinois‘ Deere and Co., which moved a major international sales office to Shafhaussen from Germany and Polo Ralph Lauren Corp., which left Paris to open a European headquarters in Geneva.
And even among its traditional European competitors for U.S. direct investment, Switzerland is making strides, according to
Jacqueline Hess, director of international tax services with PricewaterhouseCoopers LLC in Switzerland, who spoke on behalf of the Swiss delegation during a program, Oct. 15, at the World Trade Center Atlanta.
For example, Switzerland has lured both U.S. and European firms away from the Netherlands, which has become more restrictive in its tax break rulings in recent years, under obligation to comply with the European Union‘s tax harmonization efforts, she told GlobalFax.
And with a corporate tax rate of 14-25%, Switzerland continues to compete favorably with Luxembourg and Ireland, also competitors in attracting direct investment from the U.S., Ms. Hess noted.
The country’s low capital gains tax, deductions for company dividends and other forms of tax relief can reduce the tax rate further, she said.
The country is also able to offer tax holidays, at the canton and federal level, of up to 10 years to foreign companies that invest in designated areas of the country and bring management and support-level jobs to the region, she added.
Foreign firms further benefit from Switzerland’s extensive network of tax treaties, negotiated with some 70 countries, including a treaty with the U.S. Its tax treaties with Latin America, in particular, are rivaled in number only by Spain, said Ms. Hess.
With its low individual income tax rates, Switzerland is also an easy location to attract top talent and management, particularly from surrounding EU countries with higher rates of taxation, she said. Double house, moving and private school tax deductions are additionally available to expatriates.
For more information, contact Location: Switzerland+, the inward investment agency of the Swiss government in New York, at (212) 599-5700.