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The consumer

Consumer Profile
In 2020, Switzerland's population slightly exceeded 8.4 million. Switzerland faces an ageing population, albeit with consistent annual growth projected in 2035, due mostly to immigration and a fertility rate close to replacement level. The median age is 42.7 years. People aged 0 to 14 years represent 15.3% of the population, the group of people aged 15 to 24 years represents 10.4%, the group of people aged 25 to 54 years represents 42%, the group of people aged 55-64 years represents 13.5% of the population and the group over 65 years represents 18.3% of the population (CIA World Factbook, 2020). There are 0.98 males per female.
In terms of ethnic composition, Swiss represent 69.5% of the population, followed by German (4.2%), Italian (3.2%), Portuguese (2.6%), French (2%), Kosovo (1.1%), and others (17.3%). Around 74 live in urban areas. Switzerland has a dense network of towns, where large, medium and small towns are complementary. The plateau is very densely populated with about 450 people per km2 and the landscape continually shows signs of human presence. The weight of the largest metropolitan areas, which are Zürich, Geneva–Lausanne, Basel and Bern tend to increase. In international comparison the importance of these urban areas is stronger than their number of inhabitants suggests. In addition, the two main centres of Zürich and Geneva are recognised for their particularly great quality of life.
At the end of 2019, there were about 3.8 million private households in Switzerland. Over a third were single-person households and 16% of the permanent resident population were living in a single-person household. Almost one third were two-person households, which represents 30% of the permanent resident population. The average household size was 2.21 persons (Federal Statistical Office).

The education system in Switzerland is largely decentralised. There are 26 cantons, which are overseen by the State Secretariat for Education, Research and Innovation (SERI). According to PISA survey, Switzerland schools are above the OECD average as for performances. According to an OECD report on education, the level of upper secondary attainment among 25-64 year-olds is one of the highest among OECD and partner countries with available data (87.8 %, rank 10/45, 2017). The level of upper secondary attainment among 25-34 year-olds is one of the highest among OECD and partner countries with available data. In contrast to general trends across OECD countries, women do not make up the majority of new entrants into bachelor’s and master’s programs in Switzerland.
Finally, 3% of the labour force work in agriculture, 20% in industry and 77% in services (2020, World Bank).
Purchasing Power

With a GDP per capita PPP of almost USD 70,989 in 2019 (World Bank), Swiss consumers enjoy a particularly high buying power. The average monthly gross wage in 2019 was CHF 6,538. According to the latest figures from OECD, the average household net-adjusted disposable income per capita is USD 37,466 a year, higher than the OECD average of USD 33,604 a year. There is a considerable gap between the richest and poorest – the top 20% of the population earn nearly five times as much as the bottom 20%. Switzerland's GINI index was at the level of 32.7 in 2017 (World Bank, latest data available).

The consumption expenditure of private households stood at CHF 357.636 billion in 2018 (Federal Statistical Office, latest data), divided as follows: housing, water, electricity, gas and other fuels 25.2%; health 16.3%; transport, communication 11.9%; miscellaneous goods and services 11.6%; food and non-alcoholic beverages 8.9%; restaurants and hotels 8.2%; recreation and culture, education 8.0%; alcoholic beverages, tobacco and narcotics 3.6%; furnishings, household equipment and routine household maintenance 3.6%; clothing and footwear 2.7%.

There is a gender gap between women and men’s earnings for all levels of educational attainment for which data are available. In 2019, women earned CHF 72,800 on average for a 90-100% job while men earned CHF 86,000 (the Federal Statistical Office). For part-time workers, women earned on average CHF 38,500, while the figure stood at CHF 48,100 for men.

Consumer Behaviour
The majority of Swiss consumers give great importance to the origin of products (especially fresh products), and at an equal price, a local product will be given preference over one that does not state its origin. To decide on a purchase, Swiss consumers are more likely than their European counterparts to look out for value for money rather than the design or the brand's reputation. Furthermore, after-sales service is very important to these consumers.

Despite the increasing popularity of e-commerce, many Swiss prefer buying only from physical shops, which gives them the opportunity to assess the product and speak to a knowledgeable salesperson. About half of the Swiss population makes at least one online purchase a month.

Digital technology has greatly altered consumer behaviour in Swiss retail in the last few years. Product sales are increasingly shifting to the internet, generating high growth rates. At the same time, the boundaries between offline and online are blurring, as the use of digital devices and online channels is now also affecting bricks-and-mortar purchases (offline sales). Many customers are using (mobile) digital devices to check product information such as prices, reviews and stock availability before or during a shopping trip. According to a Deloitte study on digital retailing in Switzerland, 83% of Swiss consumers use a digital device for shopping-related activities before, during or after their physical shopping trip. This shows that digital influences the entire online and offline shopping journey. According to the same research, digital payment systems are on the rise. In future, 46% of Swiss consumers would like to use a mobile wallet to make a payment in-store while 65% would like to use self-checkout systems.

A representative survey conducted by market research company GfK on behalf of the WWF found that nine out of ten Swiss are re-evaluating their consumption behaviour in order to consume less, albeit for different kinds of reasons. The survey found that for 44% of respondents, saving money was the primary reason for wanting to buy less. On a national level, only 20% of people considered consuming less to protect the environment, according to the survey. The desire to save money was cited particularly often in French-speaking Switzerland, where 19 out of 20 people said that they wanted to consume less. By contrast, people in Italian-speaking Switzerland cited environmental concerns as a reason to rethink their consumption more often than those in all other areas of the country. For the German-speaking Swiss, the desire to have more time rather than material goods was mentioned more often than in other regions.

The Swiss are the biggest spenders on organic products in the world, and Swiss demand is one of the largest in Europe. The Swiss spent CHF 3.24 billion on organic food in 2019, so the organic food sales achieved a 10.3% share of the total food market, according to data from Bio Suisse. The largest organic sales segments were eggs, fresh bread, vegetables and fruit; whereas meat, frozen goods, drinks and snacks were well under 10%.
Despite protests and lawsuits, collaborative platforms such as Uber and AirBnb is commonly used among Swiss students and women. According to a survey, around 60% of ride-sharing services users are under 35, and 20% are students. Women now represent 47% of users, up from 39% in 2015.
Consumer Recourse to Credit

Recourse to credit is common practice in Switzerland. Credit cards are widely accepted, and easy to obtain from banks and other financial institutions. The debt ratio of households is one of the highest in the world, with a debt/disposable income of 223% (OECD). According to a survey on income and living conditions published by the Federal Statistical Office in 2020, 9.9% are in debt due to unpaid or late payments of taxes and 7.3% of the population are in arrears due to unpaid insurance premiums, which are the two most common forms of household debt in Switzerland. Furthermore, 18.9% of the population live in a household with at least one arrear in the past 12 months, and 8% live in a household with at least three different types of debt.

The number of credit cards in Switzerland grew by roughly 300,000 in 2019, reaching more than seven million in total, whereas debit cards stood at around 14 million (Statista est.).
According to the Swiss Payment Monitor 2019, 12% of Swiss consumers pay using credit cards in more than 75 % of cases.

Growing Sectors

FMCG, organic farming.

Consumers Associations
FCAB , Federal Consumer Affairs Bureau
 FRC , Fédération Romande des Consommateurs
 

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Importing & Distributing

Import Procedures
Goods intended for permanent importation into Switzerland must be delivered to a Swiss customs office and declared for customs clearance.

The following documents should accompany the products:
• Invoices
• Certificates of Origin
• Authorizations/Certificates
• Official confirmations
• Analysis certificates
• Delivery notes
• Cargo Manifests
• Weight certificates
•  Assessment instructions

Switzerland employs an electronic customs declaration system called the “e-dec” through which customs declaration forms may be submitted. The party in charge of declaration must be authorized for electronic customs clearance by the Directorate General of Customs.
For further information, refer to the "Import Procedure" section on the Federal Customs Administration website.
Specific Import Procedures
For import of animals and animal products (including fish and bees) special health certificates, stamped by the competent authorities of the country of origin, are required. Official plant health certificates of the country of origin must accompany shipments of some vegetables, fresh fruits, and wild plants.
The import, export, or transit of certain goods is prohibited or restricted in case of security reasons, intellectual property or health protection, environmental and cultural reasons, etc. For a list of prohibited goods, refer to the dedicated page on the Federal Customs Administration website.
Distribution channels
According to a report by Credit Suisse, in 2019 sales in the Swiss retail sector stagnated. While the food and near-food sectors grew by 0.5% last year, sales in the non-food sector fell by 0.3%, with the fashion industry suffering also due to a progressive switch of consumers’ purchases from brick-and-mortar stores (-4.5%) to online retailing. However, many Swiss consumers still prefer not to shop online: according to a survey by Eurostat, 17% of Swiss consumers prefer to shop at brick-and-mortar stores.

Concerning food retail, in 2019 supermarkets remained the largest grocery channel in overall sales. Two local brands dominate the market: Coop and Migros, which are generally known for its premium products. Several discounters are also active, like the Germans Aldi and Lidl.
The Swiss consumer tends to give importance to the quality of goods, often being attracted by premium products. At the same time, Switzerland is one of the countries with the highest ratio of private label sales (around 50%), also thanks to the wide offer from the two main players: Migros is estimated to have around 250 private brands, while Coop has more than 20 (but with a wide variety of products). According to a study by GfK, Migros and Coop are the two brands to which the Swiss consumers are more loyal.

The outbreak of the COVID-19 pandemic in 2020 and the restrictions that followed contributed to a sharp increase in online sales: if the online share of total retail sales stood at approximately 9% in 2019 (GfK), estimates by the Credit Suisse see a jump of around 30% in 2020, meaning that online sales would account for nearly 15% of total retail sales by the end of the year).

Distribution market players

The two main players in the grocery retail market are Migros and Coop, with a combined market share of nearly 70%.
Migros is the leader in the sector, employing 106,000 persons and counting 2.22 million members organised in ten regional cooperatives. It has 612 supermarkets and recorded a turnover of CHF 23.7 billion in 2019 (+1.9% y-o-y, despite the stagnation of the Swiss retail sector).
Coop counts 2,313 shops, ranging in size from 30 m2 to 8,000 m2 supermarkets. In 2019, the company’s turnover stood at CHF 17.7 billion.

Other players in the Swiss market include: Denner, Lidl, Aldi, and Volg.

Retail Sector Organisations
Swiss Retailers Association (SRA)

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Operating a Business

Type of companies

Private Limited Company (SARL/Gmbh)
Number of partners: Minimum one executive domiciled in Switzerland. No maximum.
Capital (max/min): Minimum CHF 20,000.
Shareholders and liability: Liability is limited up to the registered capital and not to the amount contributed.
Public Limited Company (AG/SA)
Number of partners: Minimum one executive domiciled in Switzerland. No maximum.
Capital (max/min): Minimum CHF 100,000. When issuing registered shares, 20% of the share capital, but minimum of CHF50,000, has to be paid-in at the time of incorporation.
Shareholders and liability: Liability is limited to the amount contributed.
General Partnership
Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is unlimited.
Limited Partnership
Number of partners: Minimum 2 partners. Two types of partners: active partners and sleeping partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed.
Sole Propietorship
Number of partners: 1 natural person
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is unlimited.
 
Setting Up a Company Switzerland OECD
Procedures (number) 6.0 5.2
Time (days) 10.0 9.5

Source: Doing Business - Latest available data.

 

Cost of Labour

Minimum Wage
No minimum wage exists, except in the canton of Neuchâtel where it rises CHF 20 per hour. In October 2020, the canton of Geneva voted to introduce a minimum wage of CHF 23 per hour.
Furthermore, the majority of the voluntary collective bargaining agreements contain clauses on minimum compensation, which vary according to the sector and the experience of the worker.
Average Wage
Wages in Switzerland are among the highest in the world. According to the latest figures published by the Federal Statistical Office, in 2018 the gross monthly wage averaged CHF 6,538.
Social Contributions
Social Security Contributions Paid By Employers:
  • Old-age, survivors’, and disability insurance (10.55%; the employee’s share is one half;)
  • Unemployment insurance/supplementary unemployment insurance (approximately 2.2%; the employee’s share is one half)
  • Family compensation fund (0.3% to 3.5%; usually fully employer financed)
  • Occupational accident insurance (approximately 0.17%; fully employer financed)
  • Occupational pension scheme (2nd pillar) (contributions depend on pension plan; the employee’s share is usually half of the total contribution, where the employer bears the other half).

Social Security Contributions Paid By Employees: diseases and maternity: 0.225%; old age and widowers: 4.20; disability: 0.70%; and unemployment: 1.10% on the monthly salary, capped at an annual amount of CHF 148,000.
 

Intellectual Property

National Organisations
The body in charge of the protection of intellectual property in Switzerland is the Federal Institute of the Intellectual property (IGE).
Regional Organisations
Convention on Grants of European Patents (European Patent Convention of 1973).
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

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Tax Rates

Consumption Taxes

Nature of the Tax
Value-Added Tax (VAT) - Mehrwertsteuer (MWST)
Tax Rate
7.7% as of 2021
Reduced Tax Rate
A reduced rate of 2.5% applies to: food and drinks (except provided by hotels and restaurants); e-books, e-newspapers and e-magazines; drugs; water in pipes.
A special rate of 3.7% applies to the hotel and lodging industry.
The following items are zero-rated: exports of goods and services; supplies of certain goods and services to airlines; services with the place of supply abroad; supplies of investment gold.
Other Consumption Taxes
Federal and cantonal governments levy excise taxes on a number products. To name a few, the following taxes are levied at the federal level:

  • Petroleum tax
  • Performance-related Heavy Vehicle Charge
  • National road tax (motorway tax sticker)
  • Beer excise tax/Tax on alcohol
  • Tobacco excise tax
  • Radio and television fee

Private households pay a radio and television fee of CHF 365.

 

Corporate Taxes

Company Tax
8.5% (the tax is deductible for tax purposes and reduces the applicable tax base, resulting in a direct federal CIT rate on profit before tax of approximately 7.83%)
Tax Rate For Foreign Companies
A company is considered resident in Switzerland for tax purposes if it is domiciled or if the place of effective management is in Switzerland.
Capital Gains Taxation
There is no specific capital gains tax levied at the federal level. Capital gains on the sale of assets (including real property) are treated as ordinary business income, regardless of how long the assets have been held. If assets are sold to a shareholder or related company at a less than a fair market price, gains may be reassessed for tax purposes. Capital losses are deductible.
Where the participation exemption applies, capital gains will be exempt from tax. To qualify, the participation must be at least 10% and held for more than one year. Participation relief is granted, however, only on the capital gain exceeding the investment cost of the sold participation (e.g. not on recaptured depreciation).
Main Allowable Deductions and Tax Credits
In general, all expenses that are booked in the statutory accounts and have been incurred in the course of business are tax-deductible.
Corporate income and capital taxes paid to the federal government, as well as to the cantons and the municipalities, are tax-deductible, so as indirect taxes (e.g. real estate transfer tax, import duties and foreign taxes not covered under unilateral or tax-treaty relief provisions). Bad debt provisions are tax-deductible. Certain cantons offer the possibility to book COVID-19 provisions in the 2019 financial statements (conditions apply).

Royalty payments are generally deductible for tax purposes if they are at arm’s length, same as for payments to foreign affiliates. As far as they are recognised as an expense in the statutory books, costs incurred for job-related training and continuing education of employees are generally tax-deductible, same as the cost of employee share plans and stock option plans.

At the federal level, charitable contributions are deductible up to 20% of the net profit after tax, provided certain criteria are met.

Swiss R&D personnel expenses and expenses for third party R&D contract in Switzerland can enjoy an additional super deduction of up to 50% at the request of the taxpayer.
Moreover, losses may be carried forward for seven years. The carryback of losses is not permitted.

Companies in the canton of Zurich can benefit from a notional interest deduction on excess equity generally be based on the 10-year Swiss government bond rate.

Tax incentives are provided at the canton level for newly established enterprises and qualifying existing companies that make substantial changes to their businesses. Further tax incentives are provided at the federal level for establishing new businesses in qualifying areas of economic development and the creation of new jobs. In 2020, the Swiss government introduced a Patent Box scheme as well as tax incentives for research and development and other tax privileges in line with OECD standards. Under this scheme, profits from intangible rights that qualify for Patent Box relief are tax-deductible up to a maximum of 90%, while R&D costs can be deducted up to a maximum of 150% of the costs sustained.

Other Corporate Taxes
Issuance stamp tax (often known as "capital duty") on the issuance and the increase of the equity of Swiss corporations is levied at the rate of 1% on the fair market value of the assets contributed, with an exemption on the first CHF 1 million of capital paid in, whether it is made in an initial or subsequent contribution.

Corporate net wealth tax is only levied at the cantonal and the communal level (not at the federal level). It is based on a corporation’s equity, with rates varying between 0.001% and 0.5%, depending on the corporate residence in Switzerland.

Transfer tax on immovable property is levied by most cantons and sometimes by the municipalities, but not by the federal government. Some cantons levy real property tax. The transfer of securities is also subject to a tax at a rate of 0.15% for securities issued by a tax resident of Switzerland and 0.3% for securities issued by a tax resident of a foreign country.
Inheritance and gift taxes may be levied at cantonal level.

Social security contributions are as follows (shared equally between employers and employees):

- Old-age, survivors’ and disability insurance: 10.6%
- Unemployment insurance: approx. 2.2%
- Occupational pension scheme: varies according to the specific pension plan
- Occupational accident insurance (approximately 0.17%, paid only by the employer).

Other Domestic Resources
Swiss Federal Tax Administration
Doing Business: Switzerland, to obtain a summary of taxes and mandatory contributions
 

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Double Tax Treaties signed by Switzerland
Withholding Taxes
Dividends: 35%; Interest: 0/35% (if derived from deposits with Swiss banks, bonds and bond-like loans; or if paid to non-resident on receivables secured by Swiss real estate); Royalties: 0%.

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