Switzerland is a stable, peaceful and prosperous country, with modern market economy having low unemployment and highly skilled labor force.
Among the main sectors of Swiss economy are production of chemicals, watches, textiles, machinery, and also tourism, banking, and insurance.
Swiss neutrality and national sovereignty have fostered a stable environment where the banking sector was able to develop.
|Population (2016)||8 325 194 (+0.01%)|
|EU Status||not a member|
|National Currency||CHF (Swiss franc)|
|Exchange Rate (2017-02-17)||1 EUR = 1.0637 CHF|
|Nominal GDP (2015)||604.5 bln EUR (+0.13%)|
|Nominal GDP per Capita (2015)||73 000 EUR (+0.12%)|
|Real GDP Growth (2015)||0.8 % (2014: 1.9 %)|
|CPI, MoM (Dec 2016)||-0.1 % (Nov 2016: -0.3 %)|
|CPI, YoY (Dec 2016)||-0.2 % (unchanged)|
|CPI, Year Average (2016)||-0.5 % (2015: -0.8 %)|
|Unemployment Rate (2015)||3.3 % (2014: 3.2 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||AAA||highest credit quality, outlook stable|
|Moody's||Aaa||prime, outlook stable|
|Withholding Tax||0.0 - 35.0%|
|Double Taxation Agreements||101 signed agreements|
|Exchange on Request||6 signed agreements|
|Automatic Exchange||starts in September 2018|
|FATCA||IGA in effect since 14 February 2013, Model 2|
|Financial Market Development||5.3 (max 7.0)||rank: 8th out of 138 countries|
|Banks' Soundness||5.9 (max 7.0)||rank: 19th out of 138 countries|
|Banking Industry Country Risk||1||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 CHF|
|Country Ceiling for Deposits|
|Local Currency (Swiss franc)||Aaa||prime|
|Banking Sector Structure|
|Number of Banks||275|
|Recent Changes (2015)||new banks: 8, closed banks: 15|
|Consolidated Assets (2014)||2 975.07 bln CHF (+9.99%)|
|UBS AG||HSBC Private Bank (Suisse) SA|
|Credit Suisse AG||Bank Julius Bär & Co. AG|
|Raiffeisen Group||Mortgage bond bank of the Swiss mortgage institutions|
|List of Banks in Switzerland|
During the last 11 years EURCHF exchange rate was within the range 1.0341 - 1.6762, reaching its maximum in Oct 2007 and falling to its minimum in May 2015.
According to Eurostat, nominal GDP of Switzerland in 2015 was 604.5 bln EUR.
Switzerland outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.1% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 0.8% which was below the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Switzerland was 73 000 EUR.
Switzerland has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 49.5% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Switzerland in 2016 expressed as annual percentages of average consumer prices was -0.5% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Switzerland are shown in Table 1.
|Natural person, resident||35.0||35.0|
|Natural person, non-resident||35.0||35.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Switzerland signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Switzerland and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
There are also several agreements between Switzerland and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Switzerland signed the automatic information exchange agreement on 29 October 2015 and committed to start the automatic information exchange in September 2018.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Switzerland has FATCA agreement with the U.S. in effect since 14 February 2013 (Intergovernmental Agreement Model 2).
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Switzerland is scored 5.3 out of maximum 7.0 and ranked 8th out of 138 analysed economies. Soundness of banks is scored 5.9 bringing Switzerland into the 19th place, trustworthiness and confidence of financial market is scored 5.2 (21st place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Switzerland is included into group '1' with economic risk scored '1' and industry risk scored '2'.
|Economic resilience||very low|
|Economic imbalances||very low|
|Credit risk in economy||low|
|Systemwide funding||very low|
|Government support assessment||supportive|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Switzerland are summarised in Table 3.
|Scheme Participants||all credit institutions operating in Switzerland (including branches of foreign banks), branches of Swiss banks abroad|
|Eligible Depositors||private individuals, commercial enterprises and public-sector offices|
|Covered Accounts||credit balances (e.g. personal accounts, savings accounts, investment accounts, salary accounts, numbered accounts, deposit accounts and current accounts)|
|Maximum Protected Amount||100 000 CHF|
|Paid In Currency||CHF|
Table 3. Deposit guarantee scheme in Switzerland.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Swiss franc) deposit ceiling for Switzerland is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
Currently there are 275 credit institutions operating in Switzerland.
Recent structural changes (2011 - 2015) of the banking sector of Switzerland are summarised in Table 4.
|Number of Opened Banks||2||2||1||1||8|
|Number of Closed Banks||0||17||16||8||15|
Table 4. Recent structural changes in the banking sector of Switzerland.
All the credit institutions operating in Switzerland can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||26|
|Institutions with a special field of business||6|
|Private bankers who do not actively seek deposits from the public||7|
|Regional banks and savings banks||62|
|Stock exchange banks||45|
The list of the most recently opened banks in Switzerland is provided in Table 6.
|SOCIETE GENERALE Private Banking (Lugano-Svizzera) SA (new)||January 2015|
|IG Bank S.A. (new)||January 2015|
|Zähringer Privatbank AG (new)||January 2015|
|Bank of America, National Association, Charlotte, Zurich Branch (new)||January 2015|
|UBS Switzerland AG (new)||January 2015|
|CACEIS Bank Luxembourg, Luxembourg, succursale de Nyon (new)||January 2015|
|Banque Internationale de Commerce - BRED (Suisse) SA (new)||January 2015|
|China Construction Bank Corporation, Beijing, Swiss Branch Zurich (new)||January 2015|
|Banque du Léman SA (new)||January 2014|
|PostFinance AG||January 2013|
Table 6. The most recently opened banks in Switzerland.