Economy and Banking Sector of Switzerland

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.

Location Central Europe
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 %)
Inflation Rate 
    CPI, MoM (Dec 2016)-0.1 % ↑ (Nov 2016: -0.3 %)
    CPI, YoY (Dec 2016)-0.2 % no change(unchanged)
    CPI, Year Average (2016)-0.5 % ↑ (2015: -0.8 %)
Unemployment Rate (2015)3.3 % ↑ (2014: 3.2 %)
Credit Ratings (as of Sep 2016)
    FitchAAA highest credit quality, outlook stable
    Moody'sAaa prime, outlook stable
    S&PAAA prime
Withholding Tax 0.0 - 35.0%
Double Taxation Agreements 101 signed agreements
Information Exchange 
    Exchange on Request 6 signed agreements
    Automatic Exchange starts in September 2018
FATCA IGA in effect since 14 February 2013, Model 2
Banking Sector
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)
    Economy Risk 1
    Industry Risk 2
Deposit Guarantee Scheme 
    Maximum Protected Amount 100 000 CHF
Country Ceiling for Deposits 
    Local Currency (Swiss franc)Aaa prime
    Foreign CurrencyAaa prime
Banking Sector Structure 
    Number of Banks275
    Recent Changes (2015) new banks: 8, closed banks: 15
    Consolidated Assets (2014) 2 975.07 bln CHF ↑ (+9.99%)
Major Banks
 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
 Zürcher Kantonalbank
 List of Banks in Switzerland

Swiss Economy

National Currency

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.

Euro to Swiss franc (EURCHF).
Chart 1. Euro to Swiss franc (EURCHF). Source: ECB.


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.

Real GDP Growth in Switzerland.
Chart 2. Real GDP Growth in Switzerland. Source: Eurostat, International Monetary Fund.

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.

GDP Per Capita at Purchasing Power Parity in  Switzerland; European Union = 100.
Chart 3. GDP Per Capita at Purchasing Power Parity in Switzerland; European Union = 100.

Inflation Rate

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.

Inflation Rate in Switzerland.
Chart 4. Inflation Rate in Switzerland. Source: Eurostat, International Monetary Fund.

Taxation in Switzerland

Withholding Tax

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.

Dividends Interest
Natural person, resident 35.035.0
Natural person, non-resident 35.035.0
Table 1. Withholding tax rates in Switzerland.

Double Taxation Agreements

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):

 Antigua and Barbuda
 British Virgin Islands
 Bulgaria (Oct 2013)
 Cote D'Ivoire
 Czech Republic
 Faroe Islands
 Hong Kong
 Iran, Islamic Republic of
 Korea, Republic of
 Moldova, Republic of
 New Zealand
 Peru (Mar 2014)
 Russian Federation
 Saint Kitts and Nevis
 Saint Lucia
 South Africa
 Sri Lanka
 Trinidad and Tobago
 Turkmenistan (Dec 2013)
 United Arab Emirates
 United Kingdom
 United States

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):

 Argentina (Mar 2014)
 Australia (Jul 2013)
 China (Sep 2013)
 Hungary (Sep 2013)

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

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):

 Andorra (Mar 2014)
 Guernsey (Sep 2013)
 Isle of Man (Aug 2013)
 Jersey (Sep 2013)
 San Marino (May 2014)
 Seychelles (May 2014)

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.

Further Information:
Automatic Exchange of Information on Financial Accounts
Countries Which Will Not Automatically Exchange Account Information



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).

Further Information:
FATCA and European countries


Swiss Banking Sector

Financial Market Development

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).

Financial Market Development in Switzerland.
Chart 5. Financial Market Development in Switzerland. Source: WEF.

Banking Industry Country Risk

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'.

BICRA Group 1
Economic risk 1
    Economic resilience very low
     Economic imbalances very low
    Credit risk in economy low
Industry risk 2
    Institutional framework low
    Competitive dynamics low
    Systemwide funding very low
Government support assessment supportive

Table 2. BICRA for Switzerland. Source: S&P's.


Deposit Guarantee Scheme

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:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Switzerland are summarised in Table 3.

Scheme Participantsall credit institutions operating in Switzerland (including branches of foreign banks), branches of Swiss banks abroad
Eligible Depositorsprivate individuals, commercial enterprises and public-sector offices
Covered Accountscredit balances (e.g. personal accounts, savings accounts, investment accounts, salary accounts, numbered accounts, deposit accounts and current accounts)
Covered Currenciesall
Maximum Protected Amount100 000 CHF
Paid In CurrencyCHF

Table 3. Deposit guarantee scheme in Switzerland.

Further Information:
Deposit Guarantee Schemes in Europe


Country Ceiling for Deposits

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).


Banking Sector Structure

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 Banks22118
Number of Closed Banks01716815

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.

CategoryNumber of Banks
Big banks3
Branches of foreign banks26
Cantonal banks24
Central banks1
Foreign-controlled banks86
Institutions with a special field of business6
Other banks14
Private bankers who do not actively seek deposits from the public7
Raiffeisen banks1
Regional banks and savings banks62
Stock exchange banks45

Table 5. Number of banks by category in Switzerland.

The list of the most recently opened banks in Switzerland is provided in Table 6.

NameStart Date
 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 AGJanuary 2013

Table 6. The most recently opened banks in Switzerland.


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