Companies in Central Switzerland well positioned
Central Switzerland is one of the country's most attractive business locations. With a low tax burden, a large supply of skilled workers, and excellent transport links in many places, the cantons provide ideal conditions for business headquarters. Find out how companies in Central Switzerland have fared over the past few years.
Central Switzerland's economy is robust
The economic structure of Central Switzerland varies heavily from canton to canton. While Uri, Obwalden, and Nidwalden are characterized by the agricultural, hotel, food services, and manufacturing sectors, the tertiary sector is dominant in Zug and Lucerne. During the period of the euro and Swiss currency crisis, the economic structure of Central Switzerland proved to be resilient, posting above-average employment growth of over 7% between 2012 and 2017.
Although the agricultural and manufacturing sectors shed jobs, growth in other sectors, such as business services, more than made up for that. Moreover, the decline in manufacturing jobs was lower than the Swiss average thanks to high-tech sectors, which are less sensitive to the business cycle. The highest number of jobs in absolute figures was created in the canton of Lucerne. The canton registered an increase of 11,500 jobs, a growth rate of 6.5%. In percentage terms, Zug grew the fastest, at a rate of 10%.
Central Switzerland is experiencing lively start-up activity
A look at the business statistics reveals that, from January 2018 to September 2019, nearly 10,700 new companies were entered in the commercial register, while 980 companies declared bankruptcy – a below-average rate of business failure compared to the rest of the nation. The top five sectors for starting new companies are business consulting, head office activities, financial services, the IT sector, real estate, and the wholesale trade. A full 40% of all new businesses were registered in the canton of Zug.
Young entrepreneurs are also busy founding start-up companies. An analysis of the website Startupticker.ch in 2018 revealed that start-ups are found all over Switzerland. Overall, most start-ups are located in Zurich. When measured is terms of the number of residents, however, the canton of Zug has the highest start-up density.
Central Switzerland's tourism sector is growing
The tourism industry is an important economic factor in Central Switzerland and has seen strong growth in recent years in a nationwide comparison. The attractiveness of the tourist locations is one of the reasons for this. Another is that the sector benefits from its increased focus on the premium segment, which offers good opportunities for growth.
The number of overnight stays rose between 2013 and 2018 from roughly 3.8 million to 4.3 million, an increase of 13.8%. The canton of Lucerne, which grew by 18.9%, was the main driver due to its size. Growth in Nidwalden even shot up by 61.8% thanks to the opening of the new Bürgenstock resort.
Cantons in Central Switzerland are planning to cut corporate taxes
With the adoption of corporate tax reform in 2019, the competition to become the most attractive location is heating up once more. To prevent an exodus of certain companies with special status following abolition of their preferential tax treatment, the cantons in Central Switzerland must also find ways to maintain their attractive tax rates.
That is why the majority of the cantons in Central Switzerland plan to introduce reductions in their corporate tax rates. Another strategy for remaining attractive is the introduction of new tax instruments promoting innovative activities that are also recognized abroad. These include patent boxes, an additional deduction for research and development, as well as an interest deduction on equity.