I. Cultural Analysis
Introduction :
Switzerland is a landlocked country geographically divided between the Alps, the Central Plateau and the Jura. Its area is 41,285 km2 (15,940 sq mi). The Swiss population of approximately 7.8 million people concentrates mostly on the Plateau, where the largest cities are to be found. Among them are the two global cities and economic centers of Zürich and Geneva. Switzerland is one of the richest countries in the world by per capita gross domestic product, with a nominal per capita GDP of $67,384. Switzerland also has one of the world's largest account balances as a percentage of GDP, only placing behind a few oil producing countries. Zürich and Geneva have respectively been ranked as the cities with the second and third highest quality of life in the world. In 2010, World Economic Forum deemed Switzerland the world's most competitive country.
II. Brief discussion of the country’s relevant history
Switzerland’s geographical position with its transit routes over the Alps made it a desirable possession for European great powers through the ages. Switzerland developed slowly over many centuries, as more and more regions came together to form a loose confederation whose members gave each other mutual support. At times their different interests stretched the bonds between them almost to breaking point. It was only in 1848 that Switzerland became a more centralized federal state. This favored its economic development and ended any possibility that Switzerland might break up.
It borders Germany in the north, Austria and the Principality of Liechtenstein in the east, Italy in the south and France in the west. This means that three important European cultures meet in Switzerland - that of the German-speaking area, the French and the Italian. The Jura, the Plateau and the Alps form the three main geographic regions of the country.
C. Topography
Switzerland is divided into three natural topographical regions:(1) the Jura Mountains in the northwest, rising between Switzerland and eastern France; (2) the Alps in the south, covering three-fifths of the country's total area; and (3) the central Swiss plateau, or Mittelland, consisting of fertile plains and rolling hills that run between the Jura and the Alps. The Mittelland, with a mean altitude of 580 m (1,900 ft), covers about 30% of Switzerland and is the heartland of Swiss farming and industry; Zürich, Bern, Lausanne, and Geneva (Genève) are on the plateau. The central portion of the Alps, around the St. Gotthard Pass, is a major watershed and the source of the Rhine, which drains into the North Sea; of the Aare, a tributary of the Rhine; of the Rhône, which flows into the Mediterranean; and of the Ticino, a tributary of the Po, and of the Inn, a tributary of the Danube, which flow into the Adriatic and the Black seas, respectively. The highest point in Switzerland is the Dufourspitze of Monte Rosa at 4,634 m (15,203 ft); the lowest is the shore of Lake Maggiore at less than 195 m (640 ft). The second-highest and most celebrated of the Swiss Alps is the Matterhorn (4,478 m/14,692 ft), long a challenge to mountaineers and first scaled in 1865.
IV. Social institutions
A. Family People marry relatively late; they concentrate on their training and career before they start a family. Swiss women are among the oldest in Europe at the birth of their first child.The majority of couples have only 1 or 2 children. In 2004 the average number of children per woman was 1.42, less than the EU average of 1.5. The world average is 2.65.Surveys have shown that parents put financial difficulties as the main reason for restricting family size. Large flats are expensive, and there is a shortage of affordable child care.
Age at first marriage 31 (men) / 28.7 (women)
divorce rate 52.6%
children per woman 1.42
mother's age at birth of first child 29.5
1. The nuclear familyThe nuclear family is the most important social unit. On weekends, families are often active together, taking trips or visiting family or friends. Teenagers are generally given a fair amount of independence. To get around, Swiss rely on well-organized public transportation, but many also walk and bike. It is easy to get around, and cities are in most cases easily accessible.
1. The role of education in society
The need to make the education system more centralised has become more evident as Switzerland faces up to changes in society and the world.These changes are occurring on several levels.Families in today's world are more mobile than ever before. There is generally a much greater mixture of backgrounds and nationalities in any one class than there used to be. If families move to a new canton, it is important that the children can fit straight in to the syllabus at their new school. Schools have an important role to play in integrating children of immigrant parents.
More women are working, so mothers cannot always be there to look after their children in the day time. Currently most schools have long lunch breaks and pupils are expected to eat at home. Furthermore, the lesson times often vary from one class to another, which means that children from the same family attending the same school are likely to begin and end class at different times. In some areas, mainly in towns, it is possible to arrange for children to be looked after during the lunch break and after lessons, but this is a paying service. Many cantons and communes are now discussing the introduction of a set school day. Globalisation has thrown up further challenges. Educational standards and qualifications have to be comparable not only within Switzerland, but at a European level. Globalisation has also changed the need for linguistic competence. Where once it was important for Swiss citizens to know at least one of the other languages of Switzerland, today English is coming to dominate. The rapid spread of new technologies has opened up new possibilities for learning. At the same time, teachers are having to learn new skills in order to keep abreast with new developments.
a. Primary education (quality, levels of development, etc.)
The obligatory school system usually includes primary education (Primarschule in German, école primaire in French and scuola primaria / elementare in Italian) and secondary education I (Sekundarstufe I in German, secondaire I in French and scuola secondaria / media in Italian). Before that, children usually go to kindergarten, but it is not required. The minimum age for primary school is about six years in all cantons but Obwalden, where it is five years and three months. The cantons Thurgau and Nidwalden allow five year olds to start primary school in exceptional cases. Primary school continues until grade four, five or six, depending on the school. Any boy or girl can take part in school if they choose to, but kids are separated depending on whether they speak French, German or Italian.
b. Secondary education (quality, levels of development, etc.)
At the end of primary school (or at the beginning of secondary school), pupils are separated according to their capacities and career-intentions in several (often three) sections. Students who aspire to an academic career enter high schools (named "Gymnasium" or "Kantonsschule") to be prepared for further studies and the matura (normally obtained after 12 or 13 years of school at the age of 18/19) Students intending to pursue a trade or vocation complete only three additional years before entering Vocational Educations which are regulated by federal law and are based on a cooperation of private business offering educational job-positions and public schools offering obligatory school-lessons complimentary to the on the job-education. This so called "dual system" splitting academic and vocational training has its continuation in the higher education system. While the academic training leads to the matura and free admission to Universities, successfully completed vocational education give access to third level of practical education, the Fachhochschulen. In the science literacy assessment of PISA, 15-year-old students in Switzerland had the 16th highest average score of 57 countries.
In the lower second level there are several different teaching and school models that may exist. Some cantons define a specific model, while others allow the individual municipalities to determine which model to follow.
Separated modelPupils are allocated to institutionally separate school types, according to their performance levels. The structure is based on the principle of equal capacities among pupils. Generally, each school type has its own adapted curricula, teaching material, teachers and, in some cases, its own range of subjects. In general, there are 2 to 3 school types (4 in a minority of cantons), the names of which vary. In the structure with 2 school types, a distinction is made between the performance-based group at basic level (with the least demanding requirements), and the performance-based group at advanced level. In the structure with 3 school types, there is a performance-based group at basic level, a performance-based group at intermediate level and a performance-based group at advanced level. The requirements of the performance-based group at advanced level are the most demanding and this school type generally prepares pupils for transfer to the matura schools.
Cooperative model
The cooperative model is based on core classes with different performance requirements. Each pupil is assigned to a core class according to his or her performance level. The pupils attend lessons in certain subjects in differentiated requirement-based groups (where by the core classes are mixed).
Integrated model
The integrated model does not use different school types or core classes. Pupils with different performance levels attend the same class and mixing is maintained. In certain subjects, teaching occurs on differentiated requirement-based levels.
2. Literacy rates
The literacy rate for Switzerland is close to 100%. However, there is a phenomena called "secondary illiteracy" which means, people can read a text (they know the letters), but they do not understand what they read (not because of the language, but because of their limited intellectual capabilities).
C. Political system
• Confederation
• Cantons
• Communes
Federalism
Switzerland consists of 26 cantons. These are the original States which joined together in 1848 to form the Confederation to which they ceded part of their sovereignty. Each canton has its own constitution, parliament, government and courts. Direct democracy in the form of the “Landsgemeinde”, or open-air people’s assemblies, is now confined to Appenzell Innerrhoden and Glarus. In all other cantons the people cast their votes at the ballot box.
All the cantons are divided into communes, of which there are currently over 2,700. Their number is in decline as a result of amalgamations. Around one-fifth of these communes have their own parliament; in the other four-fifths, decisions are taken by a process of direct democracy in the local assembly. The degree of autonomy granted to the communes is determined by the individual cantons and therefore varies considerably.
Political parties
Swiss People's Party
Social Democratic Party
The Liberals
Christian Democratic People's Party
Conservative Democratic Party
Green Party
Green Liberal Party
Evangelical People's Party
Christian Social Party
Federal Democratic Union
Ticino League
Swiss Party of Labour
Alternative List
Freedom Party
Pirate Party
Swiss Democrats
solidaritéS
Geneva Citizens' MovementStability of government
Switzerland has a stable government. Most voters support the government in its philosophy of armed neutrality underlying its foreign and defense policies. Domestic policy poses some major problems[citation needed], but the changing international environment has generated a significant reexamination of Swiss policy in key areas such as defense, neutrality, and immigration. Quadrennial national elections typically produce only marginal changes in party representation.
In recent years, Switzerland has seen a gradual shift in the party landscape. The rightist Swiss People's Party (SVP), traditionally the junior partner in the four-party coalition government, more than doubled its voting share from 11.0% in 1987 to 22.5% in 1999, thus overtaking its three coalition partners. This shift in voting shares put a strain on the "magic formula", the power-broking agreement of the four coalition parties. Since 1959 the seven-seat cabinet had comprised 2 Free Democrats, 2 Christian Democrats, 2 Social Democrats, and 1 Swiss People's Party, but in 2004, the Swiss People's Party took one seat from the Christian Democrats.
The Swiss Federal Constitution limits federal influence in the formulation of domestic policy and emphasizes the roles of private enterprise and cantonal government. However, in more recent times the powers of the Confederation have increased with regard to education, agriculture, health, energy, the environment, organized crime, and narcotics.
Role of local government
The role of local governments in Switzerland at the grassroots-level (villages and towns) cannot be properly understood without a look at Swiss federalism in general and the position of cantons in particular. The Swiss polity is a federalist three-tier system, composed of the national state (the 'Confederation'), federated states (cantons) and localities (communes). Switzerland is divided into 26 cantons, three of which are divided into half-cantons. The cantons are also divided into communes and there are currently about 2,900 communes in Switzerland. Communes are the smallest administrative units represented by the local government bodies.
The cantons, second tier local government bodies, vary greatly as to size and character. Not all the cantons are single territorial entities: some have small exclaves completely surrounded by the territory of other cantons. Each canton has its own constitution, its government, its parliament, its courts and its laws, though they must, of course, be compatible with those of the Confederation. The cantons enjoy a great deal of administrative autonomy and freedom of decision-making. They have independent control over their education systems and social services, and each has its own police force. Each canton also sets its own level of taxation. In two of the smaller cantons - Appenzell Inner-Rhodes and Glarus - the people meet annually in a popular assembly, the Landsgemeinde, where each citizen can vote personally on local issues. In the other cantons decisions are taken by elected representatives. Cantons exert decisive influence on the affairs of the federation; majority of the cantons decide on any new competency of the central government.
Regional intergovernmental conferences deal with matters of importance to their particular region. The directors of departments at cantonal level - such as education - meet in the relevant cantonal directors' conferences to discuss coordination among and/ or between them. The governments of all the cantons are represented in the Conference of Cantonal Governments, set up in 1983, to mediate between the cantons and the federal government and to help in the division of responsibilities between them.
Communes are the first tier local government bodies in Switzerland. All Swiss are first and foremost citizens of a commune. It is from this status that they automatically derive citizenship of a canton and of the country as a whole. The communes, like the cantons, have their own elected administrative authorities. For some local issues they take autonomous decisions; in other cases they carry out decisions of the canton or the confederation. The areas for which they are responsible include security, education, health, transport and local infrastructure (food, water and sanitation). They also register births, marriages and deaths, and collect federal, cantonal and local taxes. The details vary from canton to canton. Cantons and communes have their own fiscal revenue and are therefore largely independent of central funds.
Communes in Switzerland have citizens' assembly and its size depends on the population of the respective communes. In 90% of communes, the citizens gather at least once a year in the assembly where each adult individual votes on important subjects. However, in larger communes such direct participation is not practical, and most decisions are left to an elected town council which meets regularly. Even in the biggest communes all members are balloted on items like the budget. They cast their votes not in an assembly, but in booths or by post.
Decentralised government with the strong cantons and communes is a vertical dimension of power-sharing. A host of factors, i.e. specific historical, cultural, political and constitutional development, have contributed to the successful decentralisation in Switzerland. Nevertheless, the Swiss model of providing services to citizens at the lowest possible level may be an inspiration for successful decentralisation process and for strengthening local governance elsewhere.
D. Legal system
The Swiss legal system is highly developed; commercial law is well defined; and solid laws and policies protect investments. The Swiss franc is one of the world's soundest currencies, and the country is known for its high standard of banking and financial services. Switzerland is a member of a number of international economic organizations, including the World Trade Organization (WTO), the International Monetary Fund, the World Bank, and the Organization for Economic Cooperation and Development (OECD).
Organization of the judiciary system
Art. 122 of the Federal Constitution provides that the organization of the courts as well as the jurisdiction in civil and criminal matters remains with the cantons. Because of its federal structure, the 26 cantons have retained a considerable degree of law-making authority. Accordingly, the organization of the courts and the procedure before them is primarily a matter for the cantons to regulate. The Swiss court system is traditionally divided into civil, criminal, and administrative courts.
Much like the U.S. Supreme Court, the Swiss Federal Supreme Court in Lausanne is primarily a court of last resort, but, unlike in the United States, there are - at least at the moment - no lower federal courts.
The procedural law applied by the cantonal courts is thus primarily state law (with various incursions of federal law and public international law) while, depending on the area, substantive law can either be federal law (this is the general rule in regard to private and criminal law) or state law (in several areas of public law).
The Federal Statute on Debt Enforcement and Bankruptcy governs the enforcement of money claims and claims for the furnishing of security against private individuals and legal entities of private law. The enforcement of non-monetary claims is governed by cantonal
Language
A. Official language(s)
German
French
Italian
Rumantsch
II. Economic Analysis
Guideline
I. Introduction
The economy of Switzerland is one of the world's most stable economies. Its policy of long-term monetary security and political stability has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment. Because of the country's small size and high labor specialisation, industry and trade are the keys to Switzerland's economic livelihood. Switzerland has achieved one of the highest per capita incomes in the world with low unemployment rates and a low budget deficit. The service sector has also come to play a significant economic role.
II. PopulationThe population of Switzerland on November 26th 2010 is approximately 7,841,300. (Extrapolated from a population of 7,739,100 on September 2nd 2009 and a population of 7,782,900 on March 22nd 2010.)
A. Total
1. Growth ratesPopulation growth rate: 0.223% (2010 est.)
B. Distribution of population1. Age
0 - 14 years: 16.80%
15 - 64 years: 67.90%
65+: 15.30%
Labour: 3,720,000 (43%)
3. Geographic areas (urban, suburban, and rural density and concentration)
Population: Current estimate—7,542,000; density, 473 per mi2 (183 per km2); distribution, 68 percent urban, 32 percent rural. 2000 census--7,288,010.
4. Migration rates and patterns
Net migration rate: 1.31 migrant(s)/1,000 population (2010 est.)
5. Ethnic groups
The four ethnolinguistic groups (Germanic, French, Italian, and Rhaeto-Romansh) that make up the native Swiss population have retained their specific characteristics. Originally, the country was inhabited by Celtic tribes in the west and south and by Rhaetians in the east. With the collapse of Roman rule, Germanic tribes poured in, among them the Alemanni and Burgundians. The Alemanni ultimately became the dominant group, and the present Alemannic vernacular (Schwyzertütsch, or Schweizerdeutsch) is spoken by nearly two-thirds of the total population as their principal language. As of 2002, 65% of the population was German; 18% was French; 10% was Italian; 1% was Romansh; and 6% was comprised of various other groups.
III. Economic statistics and activity
A. Gross national product (GNP or GDP)
$379,758,300,000.00
2. Rate of growth (real GNP or GDP)
3.1%
B. Personal income per capita
Per capita income (2008): $66,926.
C. Average family income
6,385
E. Minerals and resources
Aluminum, Primary
Ammonia
Gypsum
Hydraulic Cement
Raw Steel
F. Surface transportation
Switzerland has a dense network of roads and railways. The crossing of the Alps is an important route for European transportation, as the Alps separate Switzerland from some of its neighbours. Alpine railway routes began in 1882 with the Gotthard Rail Tunnel, followed in 1906 by the Simplon Tunnel. The Lötschberg Base Tunnel opened in 2007. The Gotthard Base Tunnel is yet to open.
The Swiss road network is funded by road tolls and vehicle taxes. The Swiss motorway system requires the purchase of a road tax disc - which costs 40 Swiss francs - for one calendar year in order to use its roadways, for both passenger cars and trucks. The Swiss motorway network has a total length of 1,638 km (as of 2000) and has also - with an area of 41,290 km² - one of the highest motorway densities in the world.
1. Modes
1 Railways
1.1 Urban rail
1.2 Maglev
1.3 Mountain rail
2 Roads
2.1 Road passenger transport
3 Air transport
4 Water transport
4.1 Inland waterways
4.2 Ports and harbours
4.3 Merchant marine
4.4 Ship lines on lakes
4. Ports
Basel is the only port with access to the sea
H. Working conditions
1. Employer-employee relations
By comparison with the EU, Switzerland regulates comparatively few aspects of the employer/employee relationship, and labour law in general is more favourable towards the employer than is the case in the EU, although some influence is being felt from the EU acquis through the 'Bilateral Agreements' which have been signed between Switzerland and the EU.
A written contract of employment is not required except in certain special cases. For most workers, the maximum work-week is 45 hours, although overtime is permitted. The limit on hours does not apply to managers. Four weeks' vacation is the minimum, and cannot be 'bought out'.
Maternity leave is available, and return to work is only permitted after a minimum of 6 to 8 weeks. Compensation is payable if pregnancy results in termination of employment.
Non-competition agreements between employers and employees are permitted, up to three years, and with safeguards for the employee.
Sickness is not a reasonable cause of termination, on a sliding scale which permits up to 180 days of sickness after six years of employment.
An employer may terminate an employment 'with cause'. The legislation is not specific, and in the event of a dispute, a judge in court (not a tribunal) will decide. There are some rules about compensation for termination, but they are not onerous.
3. Salaries and benefits
The structures for Salaries and Compensation & Benefits, are quite generous in Switzerland for jobs of almost all professions.
Foreign investment
$24.8 Billion current US$ - 2009
Source: World Bank, World Development Indicators
1. Opportunities?
There are no controls on inward investment, or on the repatriation of profits or capital on disinvestment, other than applicable taxes (see Direct Corporate Taxation). The Swiss authorities have a 'laissez-faire' attitude towards investment, but the other side of that coin is that there is relatively little official support for investment, at least at Federal level. However, the Government does support infrastructural investment (tourist facilities, communications and training facilities) with subsidised loans up to 25% of a financing package. There are also a few traditional, mainly rural, industries in long-term decline in which the Government offers rather more generous financial support.
International trade statistics1. Major exports
The major exports of Switzerland are machinery, electronics, and chocolate.
a. Dollar value
Switzerland shipped $233.1 billion worth of exports in 2008. Principal Swiss exports were machinery, chemicals, metals, watches and agricultural products. Based on 2008 statistics, Switzerland’s largest export clients were Germany (21.2%), the United States (8.7%), France (8.2%), Italy (7.9%) and Austria (4.5%).
2. Major importsMilitary equipment including ammunition, artillery, guns, missiles and tanks … US$22.9 million (up 451.2% from 2006)
Other petroleum products … $16.1 million (up 209.7%)
Numismatic coins … $38.2 million (up 209.7%)
Steelmaking equipment … $7.9 million (up 152.6%)
Chemical fertilizers … $15.8 million (up 126.4%).
a. Dollar value
Swiss imports last year were valued at $189.6 billion. Leading suppliers of Swiss imports included Germany (19.7% of total imports), Italy (10.6%), France (10%), the United States (6.2%), the Netherlands (4.7%) and Austria (4.3%).
3. Balance-of-payments situation
Switzerland reported a balance of trade surplus equivalent to 2.1 Billion CHF in October of 2010. Trade has been the key to prosperity in Switzerland. Switzerland's annual trade balance is habitually in arrears, owing to the economy's reliance on large quantities of imported raw materials for industry. Swiss main exports are: medicinal and pharmaceutical products, watches and clocks, machinery for special industry and tools. The country imports mostly machinery, chemicals, vehicles, metals; agricultural products and textiles. European Union is by far its largest trading partner accounting for about 62% of exports and 79% of imports.4. Exchange rates
http://www.x-rates.com/d/CHF/table.html
b. Current rate of exchange
Exchange Rate 1.0048
Trade restrictions
The Swiss economy earns roughly half of its corporate earnings from the export industry. The EU is Switzerland's largest trading partner (60.9% of exports and 78.8% of imports), and economic and trade barriers between them are minimal. After more than 4 years of negotiations, an agreement known as the "Bilaterals I" covering seven sectors (research, public procurement, technical barriers to trade, agriculture, civil aviation, land transport, and the free movement of persons) entered into force on June 1, 2002. Switzerland has so far attempted to mitigate possible adverse effects of non-membership by conforming many of its regulations, standards, and practices to EU directives and norms. Full access to the Swiss market for the original 15 EU member states entered into force in June 2004, ending as a result the "national preference". The Swiss agreed to extend these preferences to the 10 new EU members on September 25, 2005, but restrictions remain until 2011. A referendum was held in February 2009 on the Bilaterals I and the extension of the free movement of persons to Romania and Bulgaria.1. Quotas
The reintroduction of quotas would have had a limited impact and would have resulted in more paperwork, particularly for small and medium-sized enterprises, the justice ministry said.
"The quotas would include 44,000 permits. The impact would therefore be relatively modest as a result," the government said in a statement following a meeting on Wednesday.
The business community, trade unions and the country's 26 cantons had come out against plans to shield Swiss workers from foreign competition.
The justice ministry added that an influx of qualified foreign labour from the EU over the past two years had not harmed the country's workforce, and that there was not enough political support in Switzerland for the restrictions.
2. Import taxes
Value Added Tax (VAT/TVA)
Value Added Tax is levied on imported goods. The normal VAT rate is 7.6%, but some goods are exempt from VAT or are eligible for a reduced rate. VAT is calculated on the transaction value of the goods, plus all charges to the port of entry (including freight and insurance) plus the amount of customs duty, if any.
Most importers have a VAT number. Although supplying the VAT number at time of entry or export is not a requirement, having it on the shipment documents can assist Customs and the importer's customs broker in the customs clearance process.
Refunds
Importers may be eligible for VAT refund on goods that are re-exported from Switzerland within 60 days of import. (For example, the goods do not meet order requirements and are returned to the foreign shipper). The importer must be able to provide proof that the goods were imported and re-exported within the 60 days period for them to be VAT-free. Proof that the goods arrived in the shipper's country may also be required. Some goods are also eligible for refunds on customs duties depending on the circumstances and providing that the refund claim is submitted within regulatory deadlines.
Other Taxes
Switzerland imposes additional taxes on certain commodities. A monopoly tax is applied to most alcoholic products. Products subject to veterinary and/or phytosanitary controls are subject to tax. Tobacco, mineral oils and lubricants, vehicles, and volatile organic chemicals are also subject to additional taxes at time of import.
3. Tariffs
Tariff Schedule of Switzerland. Although the rate is as high as 3,999 CHF/kg gross, import customs duties usually are between 0 and 40 CHF/kg gross. In some circumstances, anti-dumping or countervailing measures, which result in the imposition of additional rates of duty, may also apply.
4. Customs duties
The European Free Trade Association (EFTA) between Iceland, Liechtenstein, Norway Switzerland and Singapore provides for the elimination of duty on industrial products that are the manufacture of a member country.
Although not a member of the European Union, as a member of the EFTA, Switzerland has trade agreements which eliminate duty on certain industrial, farm, and fisheries products with the European Union (EU), Bulgaria, Chile, Croatia, Israel, Jordan, Macedonia, Mexico, Morocco, Romania, Singapore, Turkey, and West Bank and Gaza Strip.
Switzerland also holds a Bilateral Trade Agreement with Faeroe Islands.
As a member of the World Trade Organization, Switzerland provides preferential duty treatment to developing nations under the Generalized System of Preferences.
Switzerland is a signatory to the Convention of International Trade on Endangered Species (Flora and Fauna), the Montreal Protocol on ozone-depleting substances and various agreements relating to non-proliferation of weapons and military equipment including the Wassenaar Agreement, the Nuclear Suppliers Group (NSG), the Missile Technology Regime (MTCR), the Australia Group, and the Chemical Weapons Convention
General Import Clearance Information
Clearance Process
Customs clearance for Switzerland is usually done electronically through a system called Model 90 that provides a link between Customs and the importer's customs broker. (Manual entry is normally used only for goods that accompany a person entering Switzerland.) A formal entry is required for all non-document shipments. Although entries are submitted electronically, a waybill and a commercial invoice are required for all goods except for a few goods that are classified as documents and are non-dutiable.
Prior to submitting the entry electronically to Customs, the customs broker reviews the shipment information and uses the description and weight of the goods to calculate the amount of duty and tax and to determine if any of the contents are subject to regulatory controls such as licenses or inspections. The customs broker also arranges payment of duties and taxes since Customs requires payment prior to customs clearance. The presence of the importer's Value Added Tax (VAT) number and Centralized Customs Clearance (ZAZ) number on the customs documents helps the broker determine if the importer will pay Customs directly through a deferment account or whether the broker will need to submit payment on behalf of the importer.
Customs reviews the electronic entry and responds with one of the following clearance messages, usually in 60 minutes or less.
- Free / without (Entry is complete using electronically submitted information.)
- Free / with (Entry is permitted, but additional documentation must be submitted within regulatory deadlines.)
- Blocked (Entry is not permitted until the documents and/or shipment contents are examined and approved.)
The statistics for how often the above entry types are applied are as follows:
Free without & Free with = ca. 80.0%
Blocked = ca. 20.0%
Examination of all imports = ca. 2%
Shipments which are designated "free" or as "free / with" are eligible for immediate release. For shipments designated as "free / with" or "blocked", the customs broker will submit any required documents in their possession. For "blocked" shipments, if Customs or one of the regulatory agencies set additional conditions (such as an inspection or a license) that must be accomplished prior to customs clearance, the customs broker will assist their client in fulfilling the requirements.
Switzerland allows entries to be submitted prior to arrival of a shipment and is able to release a majority of those shipments before arrival.
Swiss importers are required to retain commercial documents relating to a transaction for five years from the date of entry. These documents may be required for Customs audit purposes. Importers who fail to keep records may be fined.
Import Controls
When imported goods are subject to regulatory controls and an import license or permit is required, the importer is responsible for requesting import permission from the appropriate department or agency. Although very few goods require that a license be obtained prior to import, shipments lacking required licenses are subject to clearance delays.
Some regulated goods are eligible for a weight tolerance exemption that allows importation of shipments of low weight without a license or permit. Although tolerance limits are generally based on gross weight, Customs does authorize tolerance exemption for some goods based on net weight.
Customs Authorities are obligated to perform extensive and/or random review of all goods. They are obligated to process the full handling of the investigation of the goods selected for examination. They are to insure consistency in application of all necessary restrictions and exercise reasonable care in their determinations. If upon examination, goods are determined to be of a pornographic or violent nature they are subject to detainment and/or confiscation. Customs Authorities are obligated to immediately notify the public prosecutors office in the Kanton (province) where the addressee resides or the public prosecutors office having jurisdiction over the community in which the addressee resides. Films requiring an import permit/license are not subject to these measures. The final determination and enforcement of these detained goods are made through the government regulations and processes of the Kantonal Government and punishable by their laws. The lodging of complaints regarding these measures taken by customs authorities is not permissible.
Weight Declarations
Customs duties for most goods are based on the gross weight of the item (weight of the good plus the weight of its packaging) so it is important that the weight of each commodity be provided for Customs purposes. It is also beneficial to include the net weight because certain commodities subject to high duty rates (such as tobacco, watches, jewelry, etc.) have duty rates based on the net weight.
Document Requirements
Air Waybill
An air waybill (naming the importer or exporter for customs purposes)
Commercial Invoice
Required for all import and export shipments. The gross weight of the goods is required including the net weight may benefit the importer by reducing duty or taxes on certain goods and may exempt certain low weight shipments from license or permit requirements.
Certificate of Origin
Certificates of Origin are used by Switzerland to determine shipments eligible for preferential duty treatment. The EUR1 form is required under trade agreements with certain European trade groups. The GSP Form A is required when preferential treatment under World Trade Organization agreements is requested for shipments from developing countries. It should be produced at the time of entry and must be in the possession of the importer at the time of entry. Copies are not acceptable. The country of origin of the goods must also be detailed on the commercial invoice.
Carnet
The ATA (Admission Temporaire - Temporary Admission) carnet is an international customs document that may be used for the temporary duty-free importation of certain samples, trade show goods, and professional equipment that will be re-exported in the same condition by the same party within a limited amount of time. The carnet is usually issued by a Chamber of Commerce in the owner's country and is valid for one year. The carnet serves as a guarantee against the payment of duty which would be due if the merchandise is not re-exported. It must be validated by Customs, beginning with Customs in the owner's country, at time of import and re-export in order to qualify for duty-free treatment. Improper validation may lead to fines and penalties in addition to assessment of normal duties and taxes. Shipments subject to a carnet are not acceptable on any of FedEx's International Priority Services.
Declarations / Notifications
Certain goods require that the importer or exporter provide the government with particular shipment information after customs clearance of the goods. These goods may be exempt from license or other regulatory requirements.
Import Approval
Certain goods require import approval from one or more government ministries. The importer must submit an application form to the regulating ministry, which will apply its stamp/seal to the import approval application form when it grants approval. Although there is one primary import approval application form, certain commodities (textiles, whale products, food, plant products, animal products, etc.) require a form specific to the commodity.
Phytosanitary Certificate
This is certification from the appropriate government agency in the country of export that certifies that the plant or plant product is free from disease. Swiss regulations may also require that the foreign agency certify that the area in which the plant was grown or processed is free from particular pests or diseases.
Veterinary Certificate
This is certification from the appropriate government agency in the country of export that the animal or meat product is disease free and/or that the area where the animal lived or the product was processed is free from particular pests or diseases.
Customs Valuation
While there are several methods of valuing goods for Customs purposes, the method most applied (transaction value) is based on the price actually paid (or payable) for the imported goods subject to certain adjustment.
A major condition for using the transaction value is that there is no relationship between the buyer and seller, which may influence the price.
Import Duties
All goods entering or exiting Switzerland must clear Customs. Imports are subject to customs duty, value added tax, and excise duty except for those exempted under law. In some circumstances imports may also be subject to anti-dumping or countervailing duties, which result in the imposition of additional rates of duty. Duties and taxes must be paid before Customs will release goods for import.
N. Labor force
1. Size
2. Unemployment rates
O. Inflation rates
IV. Developments in science and technology
The major scientific learned societies, headquartered in Bern, are the Swiss Academy of Sciences, founded in 1815, and the Swiss Academy of Engineering Sciences, founded in 1981. About twothirds of the funds for Swiss research and development—a high proportion by world standards—are supplied by industry and the rest by federal and cantonal governments. In 1987–97, expenditures for research and development totaled 2.6% of GNP. In the same period, 3,000 scientists and 1,374 technicians per million people were engaged in research and development. The Swiss National Science Foundation was established in 1952 to finance noncommercial research for which funds would not otherwise be available. Most such spending is in the important chemicals sector. The Ministry of Public Economy, the center for federal agricultural research, has six research stations. In 1998, high-tech exports were valued at $12 billion and accounted for 16% of manufactured exports.
V. Channels of distribution (macro analysis)
The distribution market in Switzerland is dominated by vertically integrated retailers. This allows them to have a centralized buying system in order to remain competitive when compared to independent retailers.
The number of independent retailers is thus decreasing, giving way to a growing number of discount stores and supermarkets. Most of the leading retailers are legally structured as cooperatives.
Department stores, chain stores, consumer cooperatives, discount stores and supermarkets comprise the majority of such retailers that deal in a wide range of products and services ranging from textiles, leather goods, sports articles, pharmaceuticals, toys, to hardware.
A. Retailers
The structure of retail trade in Switzerland has been changing since the 1980s. Independent retailers are decreasing in number, giving way to self-service and discount stores and supermarkets, and a tendency toward specialization in food distribution has been particularly noticeable. Department and chain stores, consumer cooperatives, discount stores, and supermarkets account for a large part of local trade. The tendency in those companies is to deal in a wide range of products and services. Their centralized buying gives them a competitive advantage over independent retailers (they are given a discount by suppliers due to the vast scale of their purchases). Retail traders continue to streamline their operations in order to counter their stiff competition. Scanner cash registers for bar-coded articles are ubiquitous, and the use of electronic cards to ease payment transactions is growing (cards are issued, among others, by the Swiss Post, where numerous Swiss have bank accounts, and are becoming increasingly popular). In 1987, Swiss retail groups united to form an Electronic Payment System Association.
Yet, faced with the competition of large retail establishments with nationwide coverage, individual retailers also set up organizations to provide wholesale purchasing, importing, and other services. Functioning as cooperatives, most of these small retailers' buying groups and associations operate in the foodstuffs business but also in textiles, leather goods, sports articles, pharmaceuticals, toys, and hardware. Home shopping, or the direct sale from a private location, is becoming increasingly popular and has recorded enormous growth. The turnover for direct sales companies has doubled after 1995. The home-shopping boom has reached a record high and products sold range from Tupperware to lingerie to new recipes and cleansing agents. More than 5,700 salespeople are members of the Swiss Association of Direct Marketing Companies (VDF), mail order companies not included. They can count more than 1 million client-contacts yearly, generating a turnover of US$195 million (in 1998). Most of the products sold at "Home Shopping Parties" are top quality and innovative and cannot be found at retail stores. The advantages of home shopping are the advice offered by the sales persons, the relaxed and friendly atmosphere of the private location, the combined shopping and meeting friends experience, and the possibility of testing the products on the spot.
III. Market Audit and Competitive Market Analysis
Guideline
I. Introduction
Marketing audit is one of the services which enable you to validate by professionals, confidentially of course, your marketing process. This objective eye will give you the chance, if necessary, to complete your marketing plan, to avoid traps or identify new potentially interesting markets. This service requires only a light intervention of our consultants; it is then very cost effective for companies. As our consultants have industrial expertise, they understand your language and technical constraints. They will therefore examine your marketing process with regard to your situation.
Customs duties
Switzerland applies the Harmonised Customs System. The customs duties are calculated on the nature of the goods, mostly in relation to the weight, with a taxation in Swiss francs (CHF) for 100 kg gross or sometimes per unit, per metre or per litre. The gross weight includes the net weight of the goods and the weight of the packaging.
Import taxes
There are also taxes for the environment which are collected as prepaid royalties for the elimination of waste by the importer / distributor and which are included in the retail selling price. These taxes are enforced by the Federal Office of the Environment, Forests and the Landscape.
The Business to Consumer (B to C) market
Retail business has known limited growth: in 2003, the Swiss spent 380 billion Swiss francs (CHF) but the market-share of spending on retail business is in decline, with more being spent on entertainment. Retail business in 2003 represented only 36% of spendingf, as against 69% in 1980.
The food sector is dominated by the duopoly Migros et Coop which together controlled 60% of the Swiss food business in 2003. The other players are:
- Bon appétit, a Swiss group which owns the stores Frimago and DiscountPay.
- The wholesaler Usego.
The number of discount stores is on the rise with the entry of Aldi and Lidl. Aldi opened its first discount store on 27th October 2005 while Lidl is still looking for a site. They hope to open 120 retail outlets in Switzerland.
In the specialised distribution sector, the market is becoming internationalised with various foreign brands having successfully establishing themselves in the country:
- Ikea in the furniture segment,
- H&M, C&A in the clothes segment.
The Business to Business (B to B) market
The Swiss market is rather complex due to the existence of multiple languages (French in Lausanne and Geneva, German in Zurich and Berne, Italian in Lugano) and also due to administrative decentralisation. The principal commercial zones are located around Zurich, Bale, Geneva and Lausanne. Considering the high purchasing power of people and the fundamental demand for quality, this market has the reputation of being very difficult and is considered a model for the rest of Europe. One of the typical characteristics of the Swiss market is the fidelity of the Swiss importer towards his suppliers. Generally, importers demand national or regional exclusivity for imported products.
Importation and distribution in Switzerland takes various forms, local agents have good contacts and have a thorough knowledge of the market, and together they belong to the Swiss Association of Agents and Representatives.
A large number of salons specialises (specialised exhibitions and fairs) take place every year. It is a very good medium for obtaining information for entering the market.
IV. Preliminary Marketing Plan
· Swiss Marketing is the Number One Network of Entrepreneurs and Experts in Marketing & Sales
· Swiss Marketing is a marketing platform for professional marketers in Switzerland to promote marketing and its professionals, in order to contribute to the development of competition, the economy and the society
· Swiss Marketing is an association of business and friendship
· Swiss Marketing promotes and portrays the world of marketing and sales to its best advantage
· Swiss Marketing encourages best practice in marketing and sales for business
· Swiss Marketing assists people to acquire ability and technique required within the profession regarding marketing and sales
· Swiss Marketing stimulates its members and offers ways to develop and professionalize the commercial profession
Transportation of goods
By road
The Swiss road network extends over 1,530 km of highways and main roads which connect the main cities of the country, plus 18,500 km of cantonal roads and 52,000 km of municipal roads. In general the road network is excellent even if in mountainous zones, but the climate can sometimes block certain ways. 4/5 of trips are made by road. The federal Department of the Environment, Transport, Energy and Communication (DETEC) in co-operation with the federal Office of Roads (OFROU) and the Federal Office of transport (OFT) want to promote an ecological policy of transport by combining the assets of the various ways of transportation; for example the use of rail transport for heavy traffic of goods on long distances.
By rail
The Swiss railroad network extends over 5,313 km of lines with very good services but at a very high cost. The network is run by The Federal Railroads (CFF). The traffic of goods represents 37,8% of the total traffic. The Swiss railroad network is almost entirely electrified. About 7% of the network passes through 694 tunnels. Two transalpine tunnels under the mountains Holy Gotard and Lotschberg are under construction and will be operational by 2015. The construction of high speed lines to connect the French network between Geneva and Basel, is in project. In 1997, 62 million tons of goods were forwarded by the Swiss railroads.
By air
Switzerland possesses 3 international airports in Zurich (Kloten), Geneva (Cointrin) and Bâle/Mulhouse (EuroAirport), as well two secondary airports in Berne and Lugano. Geneva remains the airlines' main destination. In 1999, 378,449 tons of freight transited through Zurich airport. The ministry in charge of air transport is the Federal Office for Civil Aviation (FOCA). The national air company is the Swiss, replacing the air company Swissair, which went bankrupt
