Switzerland is located right in the center of Europe. Its area is 41,285 km2 , making it close in size to Denmark or the Netherlands. The Alps cover about 60% of Switzerland’s territory, running from the northeast to the southwest of the country. Switzerland has more than 200 ski resorts, many of which are considered to be the best in the world. Switzerland shares borders with France (in the west and southwest), Germany (in the north and northeast), Austria, the Principality of Liechtenstein (in the east), and Italy (in the south and southwest). There are four official languages in Switzerland: Germany (spoken by 65% of the population), French (20%), Italian (9%) and Romansh (less than 1%). English is also spoken in the major tourist and commercial centers.
Switzerland is not only a country of mountains. It has countless lakes, waterfalls, glaciers and springs. Among the most famous lakes are Lake Zurich, Lake of the Four Cantons (Lake Lucerne), Lake Thun, Lake Lugano and Lake Maggiore, as well as Lake Geneva, which is the largest reservoir of fresh water in Western Europe. All this adds to the dreamlike picture of Swiss nature. The sources of the largest rivers in Europe, such as the Rhine, Rhone and Inn, are located in the Swiss Alps.
The population of Switzerland is about 7.8 million people, 20% of whom are foreigners. The average life expectancy of the Swiss is 79 years and, in the near future, it is expected to be close to 100 years. As for religion, 46% of the population is Catholic, 40% — Protestant, and the rest identify with various other religions. Switzerland’s diversity of cultures, religions and languages makes it one of the most cosmopolitan countries in the world.
If one were to describe Switzerland in one word, the most accurate word would be “tolerance”.
This includes tolerance of different cultures, skin colors and ideologies. Switzerland is a popular place to live, because, unlike most Western European countries, it is accepting people from other countries, regardless of their economic status or lifestyles.
In the heart of Europe
One of the advantages of Switzerland is its strategic geographic location, as it is a 1.5-hour flight from the most important economic and financial centers of Europe: Frankfurt, Paris and London. This is why the country has historically been situated at the crossroads of important trade routes. Major international companies and nonprofit organizations choose to locate their headquarters in Switzerland. Of the 6,500 foreign companies based in Switzerland, more than 1,000 of them have chosen the country to host their global or regional parent companies and offices. In just the last 10 years, over 180 headquarters have been opened here.
Among the companies that have established their corporate headquarters in Switzerland are 89 firms from the Forbes 2000 list, such as IBM, General Motors, Kraft Foods, Philip Morris, Procter & Gamble, Dow Chemicals, Amgen, Baxter, DuPont, Nissan and Google.
These trends are certainly not by coincidence. Indeed, in addition to its favorable geographical position, the country is known for its high productivity, availability of skilled labor, moderate taxation, infrastructure development, as well as political and economic stability. All these factors contribute to the high demand on real estate in Switzerland and on influx of foreigners.
Switzerland’s favorable investment climate has allowed for an influx of foreign capital and the development of international business. More than 50% of major companies have chosen to set up offices and research centers in Switzerland. Among them are many high-profile global brands (Cartier, Michelin, Wella, Nestle, Novartis, Roche, etc.), including American companies (for example, Google).
Office spaces take up tp 20% of all properties, properties of mixed use take around 40% and another 40% goes to the residential real estate. Large organizations mainly invest in major development projects and thus constitute a substantial share of the market.
To choose a proper country for life, work and investment, it is necessary to do a thorough analysis of the political, economic and social factors that determine an area’s investment climate, as well as to answer the question: What protection for investments, including in real estate, can the state provide a foreign investor? Let us dive deeper into the most important factors that make Switzerland very attractive for investors.
For more than 500 years, Switzerland has not participated in a war. Unlike other countries, it has not had to bear the financial losses associated with war and national currency depreciation. This has contributed to Switzerland’s high standard of living and the stability of its currency. Over the last quarter century, most European currencies have lost up to 50% in value against the Swiss franc. Traditionally low interest rates, high savings quota and inflows of foreign capital are all indicators of the stability of the Swiss economy.
Switzerland has a very low inflation rate of less than 1% (less than the EU or the USA).
As for gross domestic product per capita, Switzerland ranks third in the world, while it ranks eighth in the world in terms of purchasing power. Nominal GDP is well above the European average at USD 48,000 per capita, which is 47% higher than in Germany and 33% higher than in Austria. About 70% of GDP is generated by the service sector and 85% by small and medium-sized businesses.
The predominance of small and medium enterprises is a fundamental feature of the Swiss economy. The number of employees in 99% of Swiss companies does not exceed 250 people.
Other strong points of the Swiss economy include its skilled labor force, which is why the service sector is so highly developed, as well as the trade secrets and corporate traditions that have been passed down through the generations and have formed the basis of the country’s industry. The work force’s high levels of education, accordingly high level of productivity and knowledge of several languages are appreciated worldwide.
Switzerland is among the countries with the lowest public debt in Europe. The quota of the state budget deficit is less than 1%, which is significantly below the EU average. Furthermore, the banking sector in Switzerland is one of the most important in the global economy. According to statistics, Swiss banks hold more than 9% of global capital.
The Swiss Confederation is a federal state. According to the current constitution adopted in 2000, Swiss cantons are provided a significant degree of political freedom and administrative independence. This means that Switzerland for the most part is not a bureaucratically centralized state. At the federal and cantonal level, power is divided into legislative, executive and judicial branches. Each canton has its own laws, as well as a government and administration. This system provides the legal stability of Switzerland and a “decentralization” of power.
Switzerland is known worldwide for its unique system of “direct democracy,” according to which society, rather than parliament, has the final say in political decisions, such as military reductions, the legalization of drugs, accession to the UN or the European Union.
It is interesting to note that by obtaining 100,000 signatures, it is possible to make any amendment to the Swiss constitution, while 50,000 signatures allow you to block any law enacted by the Swiss Parliament.
The legislative body of Switzerland is a parliament consisting of two chambers: the National Council (House of People’s Deputies, 200 people) and the Federation Council (the representatives of the 26 cantons, total of 46 members). The country’s executive body is the Federal Council, which is composed of seven ministers. Every year, one of the ministers becomes president, performing only representative functions.
The four major political parties in Switzerland are the Swiss People’s Party (SVP), the Social Democratic Party (SP), the Liberal Democratic Party (FDP) and the Christian Democratic Party (CVP), which form a kind of coalition. The desire for reaching a consensus based on collective and coalition principles is an important factor for maintaining political stability in Switzerland.
Switzerland is also traditionally known for its political neutrality, which the country has kept for many centuries. As such, it does not engage in activity related to the escalation or resolution of international conflicts, and thus ensures the wellbeing and security of its citizens.
Rule of law
Switzerland offers equal legal conditions and opportunities for all, from foreign investors and to its own citizens. In Switzerland, there is no law similar to the American law on trade with hostile nations (Trading with the Enemy Act), under which the USA government reserves the right to detain an alien’s property if the USA is in conflict with his / her country.
In Switzerland, an investor’s property is absolutely secure and inviolable, regardless of whether the investor is a foreign investor or a citizen of Switzerland.
Even in times of political crises and world wars, the state has always maintained its policy of neutrality with respect to foreign owners. In addition, intellectual property and patent rights are well protected in Switzerland. Companies that register their rights in Switzerland receive guaranteed protection at the international level.
Furthermore, the development of the Internet has led to the fact that today in Switzerland, you can register a trademark in one-two weeks without having to leave home.
Social stability, personal security and high quality of living
Switzerland has the highest standards of living and excellent health care system, which services the rich and lower-income populations alike. The diversity of languages and cultures in Switzerland is not a hindrance to social stability. Rather, the absence of social problems, the high degree of tolerance and personal freedoms contribute to the nation’s economic prosperity and citizens’ high level of personal security and quality of living.
The relationships between employees and employers, tenants and landlords, etc., are based on principles of cooperation. Parties prefer to resolve disputes and disagreements through negotiation in order to avoid unnecessary conflicts and aggressive means of influence. Indeed, Switzerland is a peace-loving country, and any conflicts are resolved by reaching a compromise. a developed network of trade unions, in contrast to neighboring countries, also allows the country to avoid strikes and public utterances by workers.
The Swiss themselves are independent and very democratic people. This is evident not only in the country’s foreign policy, but also in the attitude of local residents to foreigners, who now make up about 20% of the population. Therefore, a foreigner can comfortably live in Switzerland.
Relatively low level of taxation
The level of taxation for organizations and individuals in Switzerland compared with other regions of Europe and North America remains very low. For example, legal entities registered in Switzerland pay income tax at a rate almost twice lower than in Germany or the USA.
Switzerland and the EU
Although not a member of the European Union, Switzerland and the EU signed a free trade agreement, as well as a number of other bilateral agreements, which allow for the open exchange of goods and services. Thus, Switzerland is fully integrated into the European market, while maintaining its political independence.
The European Union is an important trading partner for Switzerland, as Switzerland is the third largest supplier and second largest consumer of European goods.
Switzerland and Schengen
Since December 12, 2008, it is possible to enter Switzerland with a Schengen visa issued by any embassy of any Schengen member country. On December 15, 2008, Swiss embassies started issuing Schengen visas.
In most Western European countries, including Switzerland, buying real estate does not entitle you to obtain a residence permit, but it gives the right to receive an annual Schengen visa.
A Schengen visa entitles you to three-month stay in the country over a six-month period. Thus, by buying real estate, you are entitled to reside in the country of purchase six months of the year without worrying about getting a residence permit. In most cases, this is quite enough for a second home.
Swiss real estate law
Due to the complex mountainous terrain in Switzerland, there is very little land for development and habitation, so real estate acquisition in Switzerland is subject to a number of strict restrictions. Since 1983, the country has enacted a law limiting the rights of foreign nationals to acquire land and real estate (Bundesgesetz vom 16. Dezember 1983 über den Erwerb von Grundstücken durch Personen im Ausland (BewG)). This law is also called the Lex Koller (“foreign nationals”) law, as its purpose is to limit the acquisition of Swiss land by non-residents.
These limitations are mainly related to acquisitions and investments in residential property and not subject to the purchase of commercial real estate, which can be bought freely.
Trends on the Swiss real estate market
Foreigners have always shown interest in Switzerland. According to Swiss law governing the purchase of residential property by non-residents, foreigners can buy residential property only in certain, usually tourist areas (for example, in the cantons of Vaud, Valais, Bern, Graubünden, Ticino and Schwyz), where there are so-called purchasing quotas. It is only in these regions can foreigners buy real estate properties designated for leisure or tourism.
The real estate market in Switzerland is the most stable in Europe and significant price fluctuations on it are not expected. The main reason for this is the positive economic situation of the country in the past few years and the almost complete absence of “overheated” real estate prices due to legal restrictions on the real estate market.
In addition to housing, the real estate market in Switzerland offers other exciting opportunities for investment, such as income-generating commercial property (offices, warehouses, shopping centers, hotels, etc.).
The Swiss homeowner association, HEV Schweiz, conducts an annual survey of more than 80 organizations and companies that manage property.
According to leading professionals, the Swiss market as a whole resisted the global financial crisis. With regard to the immediate future, forecasts are predominantly optimistic.
Studies show that since 2007, the level of demand in virtually all segments of the market has not changed. Among those polled, 72% believe that the housing demand has not changed, while 52% believe the demand for apartments has remained unchanged, 3% say it has increased, and 17% believe it has fallen. The demand for office and commercial space has not changed compared to previous years, and only 22% of respondents have reported a decline in demand. In terms of land, most experts (60%) expect growth or even a continuous rise in prices, 29% believe that prices will not change, and only 11% predict a decline in prices. According to 57% of specialists, the price of construction will increase steadily, while 40% predict a constant level of prices in this market segment.
In addition, due to record-low mortgage rates, low bank deposit rates and the financial crisis, the demand for income-generating commercial real estate has noticeably increased.
Swiss education: preschool, grade school and higher education
Switzerland is one of the most attractive countries in terms of quality of education. Over 90% of those who are interested in purchasing real estate, obtaining a residence permit or building a business in Switzerland are also interested in educating their children in the country. This interest is due primarily to the high quality Swiss education. In addition, children who graduate from school in Switzerland acquire a unique experience of living in a multicultural environment and are usually fluent in two or three foreign languages.
In Switzerland, the choice of kindergarten and school is determined by a child’s place of residence. However, this applies only to children whose parents are locals and have Swiss residency or citizenship.
If you are not a resident, your only choice is private boarding schools, where the child lives all week and only spends weekends or vacations with the family.
Public or private non-residential day schools are only available to citizens or those who have a residence permit. Therefore, when thinking about Switzerland as a place of education for your children, it is necessary to either first get a permanent residence or be prepared to pay for a private boarding school for your child.
In Switzerland, children start attending kindergarten in their community when they are four years and stay there for one to two years. Kindergarten is usually around 20 hours per week and in many cantons is mandatory. There are also preparatory groups for children up to four years old, but usually the number of seats in them is limited, so it is necessary to get on the waiting list in advance.
It is necessary to say at once that there is no single national education system, not even a national ministry of education, in Switzerland. Rather, as a result of the country’s many different cultures and languages, the system is decentralized. Nevertheless, managing the education system at all levels is the task of the state. Responsibilities are shared between three levels — state, cantons and communes — but the lion’s share still lies with the cantons. The task of coordinating school education at the national level is left to the Swiss Conference of Cantonal Directors of Public Education (EDK). This body is composed of 26 members of cantonal governments that oversee education.
Currently, the age at which children enter school, the duration of the school year and the duration of compulsory schooling are similar across all the cantons. In all other matters, cantons are free to build an education of their own. Broad powers are vested in municipalities as well. And all possible conflicts are resolved through compromise on the local governmental level.
The education system in Switzerland consists of four stages: preschool, primary, secondary and higher.
Primary education and the first stage of secondary education are compulsory and last nine years. The second stage of secondary education is optional.
The school year runs from September to June (in some cantons, from late August to early July) and is divided into three trimesters: fall (from early September until mid-December), spring (from mid-January to mid-April) and summer (from late April to early June). Most public schools are free and co-educational.
At age 16, students graduating from junior high school can continue on to high school or can also pursue a specialization in vocational schools. Education in high school lasts usually three to four years, after which students receive a Matura degree, which gives them the right to enroll in universities.
In addition to public schools in Switzerland, there are about 250 private schools that are divided into single-sex schools (i. e. separate schools for boys and girls schools) and co-educational schools. Education in private schools is paid, with tuition costs varying from CHF 10,000 to 100,000 per year.
Since children live on campus, they are offered a wide choice of sports teams, clubs and activities, including additional training in research laboratories, chess, music, drama clubs, etc. Traditionally, much attention is paid to athletics. Virtually every school has a section of football, tennis, hockey and swimming. But, of course, the emphasis is on skiing.
Depending on the school, the course curriculum can also be carried according to the British, American, French or German educational system, which gives additional benefits if a child plans to enroll in universities in the UK, USA, France or Germany.
There are 10 cantonal universities in Switzerland. The language of instruction is based on the language of the region: German is used in Basel, Bern, Zurich, Lucerne and St. Gallen; French in Geneva, Lausanne and Neuchâtel; Italian in Lugano, and two languages (German and French) in Fribourg. The Federal Institute of Technology is located in Lausanne and Zurich. Swiss higher education is highly valued throughout the world, and each year students come here from all over the world. The percentage of foreign students in universities is 20%, while in some universities, such as in Geneva, it is about 30%.
Switzerland also has a system of higher professional education institutions. In these institutes, the curriculum varies according to specialty areas, which allows students to train for a certain profession at the university level. Among these are 15 pedagogical institutions that produce future teachers.
Education in universities lasts usually four to six years depending on the faculty. However, due to the fact that many students combine study with work, the duration of study may take five to seven years. The academic year is comprised of two semesters: winter (mid-October — early March) and spring (mid-April — mid-July).
Admission requirements to institutes of higher education may vary depending on the institution, and they usually hinge on competitive exams.
In the French-speaking part of the country, universities accept Russian students with a certificate of secondary education and local examination, but in the German speaking side, it is necessary to complete special preparatory coursework or to have spent one or two years studying in a higher education program in one’s home country.
It is very common practice for institutes of higher education to accept students without restriction. However, after the first year, the students must pass a competitive exam, after which 50% or more of them are eliminated. The same exam is dealt after the second year as well.
A single exam for foreigners wishing to enter the Swiss universities is held in November at the University of Fribourg. In order to sit for it, you must first apply at the admission board, which is located in the same place. The exam lasts two days. On the first day, candidates take written tests on language and mathematics (four and three hours). The second day, they are orally tested on language (20 minutes) and mathematics (15 minutes). Mathematics can be replaced by another basic discipline, like history, biology, chemistry, etc.
Many universities organize preparatory courses for foreigners, including those for language learning. They are offered in three formats: summer (from July to October), intensive (from October to July) and special courses for pre-university training.
Tuition fees in Switzerland vary considerably in both public and private universities. Private universities (including schools for the hotel business) cost about CHF 25,000–30,000 per year.
Education in universities that have support from the federal or cantonal budgets is virtually free for Swiss citizens, while foreign students pay a nominal CHF 500 per semester.
Students are allowed to work 15 hours a week while studying and without restrictions during the holidays. Students in the senior classes have the right to work for faculty, while graduate students and research assistants can earn enough wages to live on in Switzerland, even with family.
For applying for a student residence permit in Switzerland, which is still often referred to as a student visa, you need to show confirmation of enrollment, as well as proof of available funds for the first year of study. This could be a bank statement confirming the availability of funds, or a letter of guarantee from the person paying tuition.
For more information about the admission process for foreign students at Swiss universities, it is best to inquire directly at the institution. To date, foreigners and persons under the age of 18 are not permitted to study in the departments of medicine, dentistry and veterinary medicine.
International studies show that Switzerland has the most developed and stable transportation infrastructure in Europe. An extensive network of high-speed highways and railways, as well as a well-developed air transport network, allow for quick and easy access to any European business center.
International airports are located in Zurich, Geneva and Basel. Domestic flights, flights to Europe and business flights are being serviced through the airports in Bern, Lugano, Sion and St. Moritz. The Zurich International Airport tops the list of the best European airports and currently offers 120 routes to more than 70 countries.
Swissair is a national Swiss airline. Through the years of operation Swissair was a major international airline and due to its financial stability it was known as “The Flying Bank”. Swissair is a national symbol of Switzerland.
The Swiss transportation system “runs like clockwork”. Of the 5,031 km of railway lines, more than half are electrified. In the mountains, more than 600 tunnels have been dug, including Simplon (19.8 km). In the mountainous regions, cable cars and mountain railways operate. The length of these railways is about 71,000 km. They play an important role, passing through the mountain passes of Gotthard, Great St. Bernard Pass and others.
The Zurich and Geneva airports are directly connected with the country’s railway system. Trains depart from the airport to the center of the city every 10–20 minutes, with a journey time of about 15 minutes. Direct trains to other cities and countries leave the rail airport terminals every hour.
Switzerland is a small country, and at any station it is possible to buy a ticket to any destination within its borders. Booking seats in advance is recommended only for special trains, such as Glacier Express and Bernina Express. However, booking tickets for them can only be done at major stations.
The Basel airport is connected to the center of the city (and the railway station) by bus lines. Buses run every half hour and deliver passengers to the center of Basel within 15–20 minutes.
On October 27, 2008, the first underground metro in Switzerland was officially opened in Lausanne. It spans 5.9 km, has 14 stations and the trains are controlled automatically without a driver.
Swiss Pass entitles you to unlimited travel across the network of railways, postal routes and waterways that are part of the Swiss transport network — the so-called Swiss Travel System — for a period of 4, 8, 15, 21 days or 1 month.
Swiss Flexi Pass gives you unlimited travel on this Travel System for 3 to 6 or 8 days within one calendar month.
Both tickets, Swiss Pass and Swiss Flexi Pass, also entitle you to travel on trams and buses in 36 cities across the country, as well as to receive discounts on many cable cars.
Swiss Saver Pass and Swiss Saver Flexi Pass differ from the Swiss Pass and Swiss Flexi Pass by offering additional savings if two or more passengers are traveling together. In this case, each of them receives a discount of 15%.
Swiss Youth Pass is another kind of Swiss Pass. With this ticket, young people under 26 years receive an additional 25% discount on the full fare Swiss Pass. Otherwise, Swiss Youth Pass gives exactly the same benefits as the Swiss Pass.
Swiss Transfer Ticket is a roundtrip ticket from the Swiss border or airport to your destination. It is valid for a month.
Swiss Card, like the Swiss Transfer Ticket, is a roundtrip ticket, but it offers access to the railway, postal and water transport routes in Switzerland for half price for a month. Most cable cars also offer discounts to Swiss Card holders.
Swiss Family Card is issued free of charge to families when purchasing any of the above tickets. With this ticket, children under 16 years travel free with their parents. Children between the ages of 6 to 16 years that are not members of the family receive only a 50% discount.