Why Offshore Incorporation in Switzerland Makes Sense

Until just recently, few companies from the Far East placed their operations between the cities of Geneva and St. Petersburg. Gallen. However, it is beginning to change quickly as more big Asian firms discover Switzerland for setting up an offshore incorporation.

A few firms have already settled here, such as the Chinese Alibaba (media) headquartered in the city of Geneva. Others are the South Korean Songwon International (chemistry) in Frauenfeld and the Indian Arexera Information Technology in Schaffhausen.

To most entrepreneurs, Switzerland seems like an attractive location to do business through an offshore incorporation. That is why more than 180 international firms mostly from the US and Europe like Kraft Foods, Cisco Systems, Nissan, Yahoo, Cadbury or Google moved their operations to the Lake Geneva region during the last decade.

Switzerland Gains Draw as Tax Haven

Several large US companies are reincorporating from Bermuda to Switzerland. This helps them avoid expected legislation aimed at corporations located in tax heavens.

Just recently, oil-industry firms Weatherford International Ltd., Forster Wheeler Ltd. and Houston's Noble Corp. as well as also conglomerate Tyco International Ltd. announced their moves. A similar move plans Transocean Inc., a big offshore driller after receiving shareholder approval. Early this year (2008), the board of Bermuda-based insurer ACE Ltd. approved a "redomestication" from the Cayman Islands to Zurich.

Chiefly, the movements are designed to reserve tax benefits the companies enjoyed while being domiciled in countries like the Cayman Islands and Bermuda or even in the US state Delaware with favorable tax rules.

However, those companies discovered that Switzerland is a better place for tax protection than in these countries. Tax authorities have exceeded to close tax loopholes that allow US companies to benefit from incorporating in offshore tax havens while operating from the US Even if the laws should change, Switzerland's tax treaties with the US would still protect companies. For this reason, offshore incorporation in Switzerland will ensure the same tax advantages.

For years, the French part of Switzerland has lagged behind its Swiss-German rivals as a location for commerce. The city of Basel with its pharmaceutical, chemical and biotech industries flourished for years. Zurich's financial services sector also greatly very quickly while the French speaking part of our country drew up the rear, bothered with above average unemployment and a lack of dynamic businesses.

Switzerland has become the logical choice for a company looking for their European operations and headquarters to this region. Regional company seats mean high-qualified jobs for people with a good education and appropriate salaries and a knowledge transfer.

According to a study in 2006, international companies already operating from Switzerland would again settle here. The companies from India, China, Taiwan and South Korea are going global right now. It has to do that the champions from Asia grow stronger into the world economy.

Neverheless, they keep coming, not just from Asia but also from all over the world. The town of Rolle for instance has already made room for US agriculture giant ADM (Archer Daniels Midlands) this year. So also to the Japanese luxury car brand Infiniti (Nissan International SA), which has set up its European operations to this town.

Nearby, the town of Nyon is the second most dynamic area in Switzerland for new offshore incorporation start-ups. It is currently registering an annual increase of seven per cent. Morges, another town close by registers similar increases. The addition of companies moving into the Geneva-Montreux region was very noticeable in recent years.

The Lake Geneva region – the perfect location for an offshore incorporation

Experts cite a combination of factors. The region offers quality of life to expat workers who are used to the daily grind of commuting in big European or US urban areas.

Than, there is the availability of highly qualified staff, both in numbers and in proximate to the company's location. This is rather difficult to find in other European countries. Furthermore comes that Switzerland has a high educational standard and many employees are bi- if not tri-lingual.

For this reason, the region is proving particularly attractive to companies in the service industries. It will also move US companies closer to a faster-growing customer base in East Europe and Asia, where more than half of their revenues may come from today.

Combine that with a very attractive taxation level and the availability of international schools for the children of managers …

… and the result is an overall offering that makes areas like this appear very attractive in international terms. For many, it is reason enough to move their European headquarters to Switzerland to form an offshore incorporation.


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