Switzerland

Europe

תוצר לנפש ($)
$93657.2
Population (in 2021)
8.7 million

הערכה

סיכון מדינה
A1
אקלים עסקי
A1
הקודם
A1
הקודם
A1

suggestions

תקציר

חוזקות

  • Political, economic and social stability and consensus; role of direct democracy
  • International financial centre, headquarters of international groups and organisations
  • Limited sensitivity of exports to foreign exchange due to the emphasis on high technology, financial services, pharmaceutical products and luxury goods
  • Very strong public and external accounts

חולשות

  • Small, open economy (foreign trade accounted for 126% of GDP in 2023) and landlocked
  • The merger of Credit Suisse and UBS in March 2023 resulted in one large financial institution amassing assets of USD 1.5 trillion i.e., twice the size of Swiss GDP and representing over 30% of Swiss banking market share, thereby creating a huge banking risk.
  • Trade relationships between Switzerland and the EU are crumbling as existing trade-agreements have not been updated in years

מסחר בורסות

ייצואסחורות כ-% מסך

אירופה
38%
ארצות הברית
16%
סין
11%
הודו
4%
בריטניה
3%

יבואסחורה כ-% מסך הכל

אירופה 47 %
47%
ארצות הברית 11 %
11%
סין 6 %
6%
בריטניה 4 %
4%
איחוד האמירויות הערביות 3 %
3%

הערכות סיכונים מגזריות

השקפה

סעיף זה הוא כלי רב ערך עבור מנהלי כספים ומנהלי אשראי תאגידים. הוא מספק מידע על נוהלי התשלום וגביית החובות הנהוגים במדינה.

Resilient economic growth in 2024

The Swiss economy was relatively resilient in 2023 and is expected to remain so in 2024. One reason is private consumption, even if it cannot keep up last year’s strong momentum. Private consumption is influenced by various factors. The consumer price inflation rate has been below the target of 2% since June 2023 and fell almost continuously until Spring 2024. The fall in the price of goods and energy outweighed that of services. From the second quarter, the inflation rate is likely to stabilise at around 1.4%, which is still a high level for price increases by Swiss standards (bearing in mind the deflation over the 2012-2016 period). Consumption will be also influenced by rising costs for compulsory health insurance, with the average premium rising by 8.7% in 2024. The mortgage benchmark interest rate (“hypothekarischer Referenzzinssatz”) set by the Swiss government to regulate the market and to guide banks, was raised from 1.5% to 1.75% in December 2023 and will have an impact on rents. However, this will be countered by the increase in nominal wages, which are expected to grow by 2.0% in 2024 after a rise of 1.8% in 2023. Combined with slightly lower inflationary pressure, real wages should rise again for the first time in several years. The unchanged strong population growth rate (1.4% year-on-year in 2024 according to KOF estimates), which is supporting consumption growth, is also relevant for the economy as a whole.

Lower inflationary pressure and the strong franc already drove the Swiss National Bank (SNB) to cut interest rates for the first time from 1.75% to 1.5% in March 2024. The SNB has thus taken on a pioneering role compared to other central banks in developed economies. Interest rates in Switzerland are lower than in other countries (in the eurozone, the ECB's key interest rate, which is the main refinancing rate, was 4.5% in March), which is why only one more rate cut is expected this year, contrary to other central banks. Although these interest rate cuts mean lower financing costs compared to 2023, the interest rate level remains high by Swiss standards. In combination with a deterioration in the earnings situation due to higher labour costs, among other things, the scope for investment activity by Swiss companies remains limited, especially in some segments of the manufacturing sector (like machinery), which have continued to suffer from low foreign demand from 2023. In the construction industry, on the other hand, investment activity is likely to increase. Despite the high demand in the private housing market, partly due to the rising population, this is not due to private house building. Rather, it is civil engineering investments for public transport and infrastructure expansion that are supporting economic growth. These projects include, for example, the expansion of the Gotthard tunnel with a second tube (total project costs are 2.1 billion CHF), capacity expansion of the railway stations in Geneva and Lausanne and the expansion of Alpine solar plant projects (Solar Express). Foreign trade should support economic growth in 2024 as exports should grow faster than imports. After appreciating considerably last year, the franc should depreciate again somewhat against other central banks due to the earlier interest rate cut. Between the start of the year and the end of April, the franc depreciated by around 4% against the EUR and the GBP and by 6% against the US dollar. This makes Swiss exports cheaper and imports more expensive. In addition, a significant proportion of exports are pharmaceutical products as well as watches and precision instruments (59% of goods exports in 2023), which are less susceptible to economic fluctuations.

Public accounts remain in good shape, but more social expenditures are looming on the horizon

Public accounts remain at a small surplus in Switzerland thanks to better results by the cantons and the social security system, which more than offset an increased federal deficit. A special feature over the medium term is a positive referendum in spring 2024, according to which the basic pension is to include a 13th monthly payment from 2026. This corresponds to an increase of around 8%. This is the first left-wing popular initiative on social expansion to be successful in more than 130 years. However, it remains unclear how this is to be financed (by higher revenues or a budget deficit). The additional costs involved amount to CHF 4.1 billion (0.5% of GDP). In any case, public debt remains very low and gives no cause for concern.

The country consistently posts a large current account surplus thanks to the considerable goods surplus, which in 2023 stood at 15% of GDP. Although finance and insurance, together with sport licences (e.g., the FIFA, UEFA and IOC), play an important role in the Swiss economy and the external accounts, the services balance and the primary income balance (e.g., income from financial market operations abroad) are structurally in a small deficit. On top of this is the structural deficit of the secondary income (transfer) balance, which is a result of foreign workers who work in Switzerland and sent home part of their income. In 2024, a noticeable reduction of the trade of services deficit is expected thanks to the European football championship and the Olympic games in summer. Furthermore, the trade surplus is also expected to improve.

Swiss assets abroad allow the country to enjoy a substantial positive net foreign investment position (103% of GDP at the end of December 2023), the size of which varies according to stock market prices and the USD/CHF exchange rate.

Stable domestic political situation, but the future relationship with the EU remains unclear

Due to the Swiss tradition of political consensus, the political system is extremely stable. The main decisions are taken by plebiscites. The Federal Council, i.e. the government, comprises seven ministers. The position of the President is elected from this group for one year and alternates. Since 1959, the federal council has been composed of the so-called “magic formula”, according to which the first three parties in the results of the general election receives two seats in the Federal council and the fourth party gets one seat. To change the party composition of the council a party has to finish in the top four at two consecutive elections, which is rare. Accordingly, the party composition of the council has not changed since the last general election in October 2023. The right-wing national-conservative SVP, the social democratic SP and the liberal FDP have two seats, while the Christian-democratic Center party has one seat. What materialised from the election was a shift to the right. The SVP made inroads in Parliament, gaining 9 new seats to reach 62 seats out of 200 at the expense of the left-wing environmentalists (Greens), who came in fourth place in 2019, but in 2023 lost another 5 seats to now total 23 seats, and fell to fifth place. The Green Liberals lost support in a similar scope and now has only 10 seats. Apart from these scores the number of seats held by other parties stayed roughly unchanged.

Political relations between Switzerland and the European Union remain uncertain. In May 2021, negotiations over an all-embracing trade agreement collapsed at the last minute after Switzerland walked away from the negotiating table. Since then, the EU has refused to update the existing trade-agreements and to work out new ones, with negative effects on the trade of equities, the allocation of European Research grants, or the integration of Switzerland into the European electricity market, for instance. In March 2023, Switzerland announced that the negotiators should be authorised to hold new negotiations. According to the authorities, Switzerland's position on critical issues should be clarified in advance before the negotiations start to avoid risking another breakdown at the end of the negotiation process. The plan is not to reach a comprehensive agreement but to harmonise individual thematic packages. Negotiations with the EU (Switzerland's largest trading partner accounting for 58% of the total trade volume) officially resumed in mid-March 2024. However, the SVP has already spoken out against the negotiations and the possible outcome. The main bone of contention remains the role of the European Court of Justice. By participating in the EU internal market, Switzerland must adopt changes to EU law. In the event of disputes, there is to be an arbitration tribunal in which Switzerland and the EU are represented, but which will refer to ECJ case law if necessary. How long these talks will last is unclear, as is whether these individual agreements would even be accepted in a final referendum.

נוהלי תשלום וגבייה

סעיף זה הוא כלי רב ערך עבור מנהלי כספים ומנהלי אשראי תאגידים. הוא מספק מידע על נוהלי התשלום וגביית החובות הנהוגים במדינה.

Payment

Bills of exchange and cheques are not commonly used in Switzerland, due to prohibitive banking and tax charges. The stamp duty on bills of exchange is 0.75% of the principal amount for domestic bills and 1.5% for international bills.

Commercial operators are particularly demanding regarding the formal validity of cheques and bills of exchange as payment instruments.

Domestic and international payments are commonly made by bank transfer ? particularly via the SWIFT electronic network to which the major Swiss banks are connected. SWIFT provides rapid and efficient means of processing of payments, at low cost.

Debt Collection

The Swiss legal system presents technical specificities, notably: The existence of an administrative authority known as the Enforcement and Bankruptcy Office (Office des poursuites et des faillites / Betreibungs und Konkursamt / Ufficio di esecuzione e fallimenti) in each canton, with several offices at local government level which are responsible for executing court orders. Their functions are regulated by federal law. Interested parties can consult or obtain extracts from the Office’s records; A new, unified civil procedure code, created by a commission of experts and approved by the Federal Council, became effective in 2011. This code entailed the repeal of the 26 cantonal procedure laws which were hampering the efficiency of the judicial system. Nevertheless, lawsuits require the assistance of a lawyer who is familiar with the court organisation in the jurisdiction where the case is has been initiated, as well as with the language to be used in the litigation process (French, German or Italian).

Amicable phase

The debt collection process commences with the issuing of a final notice, preferably by recorded delivery (making it possible to accrue overdue interest). The notice requests the debtor to pay, within two weeks, the principal amount due, along with overdue interest calculated at the legal rate of 5% (unless otherwise agreed by the parties).

Legal proceedings

If payment is not forthcoming, the creditor can submit a signed and completed petition form (réquisition de poursuite) to the Enforcement and Bankruptcy Office. This Office then serves the debtor with a final order to pay within 20 days, effective from the date of notification of the?petition.

While very easy to use by creditors, this procedure nonetheless permits debtors to oppose the order within 10 days of being served, without having to specify grounds. In such cases, without unconditional proof of debt to cancel the debtor’s opposition, the only recourse for creditors is to seek redress through a formal legal?action.

Before commencing formal legal action, it is mandatory to proceed to mediation or conciliation before a Justice of Peace. This excludes disputes falling within the jurisdiction of the Commercial Court of Zurich, or cases where both parties have agreed to ignore these proceedings and the claim is higher than CHF 100,000.

Legal proceedings entail initiating a formal (and now unified) procedure, comprising written and oral phases, with the possibility of examining witnesses during a court hearing. These procedures can last from one to three years, depending on the canton.

Conversely, where a creditor holds unconditional proof of debt signed by the debtor (any original document in which the buyer recognises his debt – such as a bill of exchange or a cheque), he may request the temporary lifting of the debtor’s opposition (main levée de l’opposition), without having to appear before the court. This is a simplified procedure, which is quick and relatively easy to obtain, and in which the court’s decision is based upon the documents submitted by the?seller.

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Once this lifting order has been granted, the creditor has 20 days in which to refer the case before the judge to obtain the debt’s release (libération de dette) and subsequently obtain an executory order. Once the court hands down a final ruling, the Enforcement and Bankruptcy Office delivers an execution order or a winding-up petition (commination de faillite). This winding-up petition enables the creditor to send the court a request for bankruptcy. Upon receipt of this request, the court will fix a hearing and send a written notice to attend to both parties. If no payment is effected by the debtor and the creditor does not withdraw his request, the court will declare the debtor company bankrupt.

Either a court of first instance or a district court hears legal procedures. Commercial courts, presided over by a panel of professional and non-professional judges, exist in four Germanic cantons: Aargau, Berne, Saint-Gall, and Zürich.

Once an appeal has been lodged with the cantonal court, as a last resort for claims exceeding CHF 30,000, cases are heard by the main federal judicial institution: the Swiss Federal Court (Tribunal fédéral Suisse / Schweizerisches Bundesgericht / Tribunale federale svizzero), which is located in Lausanne.

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Insolvency Proceedings

RESTRUCTURING PROCEEDINGS

Restructuring proceedings (Nachlassverfahren) can be initiated either by the debtor or the creditor. The administrator takes the necessary measures to prepare for the creditor and court approval of the composition agreement. An inventory is then taken, where all assets are valued. Approval of the agreement requires the affirmative vote of a quorum of either a majority of creditors representing two-thirds of the total debtors, or a quarter of the creditors representing three-quarters of the total debt. Once approved, the agreement must be confirmed by the Court. It then becomes valid and binding on all creditors of claims subject to the agreement.

BANKRUPTCY PROCEEDINGS

A company may be declared bankrupt by the court and placed into bankruptcy proceedings if a creditor has successfully requested this, following a debtor’s declaration that it is insolvent. The court will determine whether summary or ordinary proceedings should be applied, or whether bankruptcy proceedings will go ahead (if the assets are insufficient to cover the expected costs of proceedings). The Receiver then draws up an inventory. Summary proceedings are ordered if the proceeds of the assets are unlikely to cover the costs of ordinary proceedings. In this case, there are no creditors’ meetings and the bankruptcy office will proceed to the liquidation and realisation of the assets, without the participation of the creditors.

If ordinary bankruptcy proceedings apply, the receiver publishes a notice of bankruptcy instructing all creditors and debtors to file their claims and debts within 30 days. This notice invites creditors to a first meeting (where they may appoint a private receiver instead of the state bankruptcy office) and a creditors’ committee. A second meeting will be convened for the commencement or continuation of claims against third parties and to agree the method for realisation of the assets belonging to the bankruptcy estate.

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Last updated: May 2024

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