Switzerland’s National Bank accepts two types of investments, the direct ones and the portfolio ones. The direct investment is the one where general capital is made in order to influence a business’ activities abroad in a direct manner and for a long period of time. Direct investments in Switzerland can be made by establishing a subsidiary or an office abroad or if an investor that owns 10% of the company’s shares has voting rights. Portfolio investments in Switzerland are made by capital investments in order to directly influence company management. Portfolio investments are represented by debt certificates, dividend-paying securities and fund certificates.
For all countries, therefore for Switzerland too, international investments are very important for economic growth. Switzerland is a renowned country for direct investments due to its exporting industrial goods and services, but it also receives great capital investments from abroad. The number of investors interested in opening companies in Switzerland is continuously increasing.
The State Secretariat for Economic Affairs (SECO) is the authority that establishes the regulations and law disciplines for foreign investments with the scope of protecting bilateral investments and agreements (BITs) against international law breaching. SECO negotiates terms of market access in order to get correct and non-discriminatory activities and it is also involved in formulating the investment policy for the Swiss Confederation.
The World Trade Organization (WTO) is responsible for the international rules on investment agreed upon with the General Agreement on Trade Services (GATS) and the Agreement on Trade-Related Investment Measures (TRIMS).
Switzerland has adopted the OECD’s Code of Liberalization of Capital Movements and agrees not to take any discriminatory actions against foreign investments made by OECD member countries. Swiss investors will have the same benefits in OECD member states.
When it comes to multilateral investment rules Switzerland is part of the Energy Charter Treaty (ECT), which means protection for the non-commercial investments in the energy sector. As part of the ECT, Switzerland also benefits from an investor-state dispute settlement mechanism.
According BITs, Switzerland negotiates the protection of its international investments on bilateral paths according to the international laws. Switzerland also negotiates free trade agreements respecting all law provisions with other countries through the European Free Trade Association.
In addition, Switzerland has signed double tax treaties with a large number of countries in order to insure it avoids the situation when the foreign investors are taxed both in Switzerland and their country of residence.
The purpose of all treaties is to make sure the Swiss business environmentis as attractive and friendly as possible. For the latest provisions on foreign investments in Switzerland, you can contact us anytime. Our Swiss attorneys will be at your disposal.
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