About Switzerland

Switzerland has one of the most stable and open economies in the world, and it was ranked fifth in the 2020 Index of Economic Freedom. Switzerland has a highly developed services sector, focused around the financial services industry and high-tech and knowledge-based production. Other key sectors include the chemical, pharmaceutical and life-sciences industries. Switzerland has one of the highest levels of per capita GDP in the world, and its currency, the Swiss franc, is regarded as a "safe haven currency" due to the country’s stable economy.

As Switzerland is a relatively small country, the economy relies heavily on trade. To bolster its openness towards external markets, Switzerland has low tariffs on imports. The highly developed financial sector offers a suite of financial instruments, while the banking industry is well capitalised, contributing to Switzerland’s status as an investment haven.

Foreign investors typically enjoy the same regulatory treatment as Switzerland's national investors, including the same tax regulation and corporate laws. There are no significant barriers to foreign investment. The country's geographical location gives it access to the European, African and Middle Eastern markets. Switzerland's state-of-the-art infrastructure further enhances its connectivity within the region.

Switzerland Market Profile Infographic_Small

What solutions are available in Switzerland?

Solution Description
Treasury Centres A centralised treasury is one way to reduce the tax burden, centralise risk management, improve liquidity and enhance yield on cash.
Interest Optimisation Maximise your interest yield from for your balances held with the bank.
Notional Pooling Cash balances in different accounts are notionally offset to derive the net balance, which is then used to calculate interest.
Sweeping/ Zero Balance Account (ZBA) ZBA are checking accounts with zero balances where funds are physically swept to eliminate excess balances and maintain greater control over disbursements.
Intercompany loans Similar to bank loans, intercompany loans refer to lending between entities within the same group.

Corporate Treasury in Switzerland

Switzerland has been consistently rated as one of the top five most competitive economies in the world by the World Economic Forum. Here, we highlight some of the key benefits relevant to treasury and cash management in Switzerland.


Financial Market Development

  • The World Economic Forum ranks Switzerland fourth in the world for financial market development in The Global Competitiveness Report 2019.
  • It ranks Switzerland eighth in the world for the soundness of its banks, while it is ranked in the top five for its low level of non-performing loans, as well as its high market capitalisation as a percentage of GDP and the availability of domestic credit to the private sector.
  • Switzerland has excellent business infrastructure and high levels of innovation, a highly skilled multilingual workforce and strong legal protections. Switzerland offers one of the most stable macroeconomic environments in the world.
  • There are no foreign-exchange controls in Switzerland. In 2015, the Swiss National Bank removed the Swiss franc's value cap against the euro. The SNB regularly intervenes to try to limit the currency’s appreciation.


Sophistication of Banking Systems

  • Switzerland is one of the world's leading banking centres.
  • There are 246 banks in Switzerland, including canton, regional and savings banks, and stock-exchange banks, but the sector is dominated by Switzerland's two largest commercial banks: UBS and Credit Suisse. There are also 71 foreign-controlled banks and 23 branches of foreign banks.
  • Switzerland's foreign-exchange market has an average daily turnover of USD275 billion (Bank for International Settlements Triennial Central Bank Survey 2019).
  • Switzerland has a very active debt market with both government and corporate bonds widely available. The market is dominated by corporate issuers, with foreign issuers accounting for a greater market share than domestic ones. Yields on Swiss government bonds are currently negative.


Regulatory Bodies

  • The banking industry is regulated by the Swiss Financial Market Supervisory Authority. The Swiss National Bank is the central bank.



  • Corporate income tax (CIT) is charged at a federal, cantonal and communal level.
  • At the federal level, the CIT rate is 8.5% on profit after tax. CIT is deductible for tax purposes, giving a federal CIT rate on profit before tax of around 7.83%. Each canton and commune also levies its own corporate income and capital taxes at different rates.
  • Tax reforms abolishing special canton tax regimes, such as for holding companies and domicile companies, came into force on 1 January 2020. Most cantons also either reduced or plan to reduce their CIT rate, giving an effective tax rate of between 12% and 14% in the majority of cantons.
  • Resident companies are taxed on their worldwide income except for profits derived from foreign branches and foreign immovable property. Non-resident companies are taxed on their Swiss-sourced income only. There is no branch profits remittance tax on the remittance of profits to the head office by the branch of foreign company.
  • Interest income is a taxable item. Interest expenses paid to third parties are generally tax-deductible. Interest paid to related parties must reflect the fair market rate and are subject to limitations. Please note that on an annual basis, the tax authorities in Switzerland issue safe harbour interest rates to be used on loans denominated in Swiss francs.
  • The standard Value Added Tax (VAT) is 7.7% with certain goods and services qualifying for lower rates of 2.5%, 3.7% (including hotel and lodging industry) or VAT exemptions (including most banking services and insurance premiums).
  • A securities transfer tax of 0.15% is levied on the transfer of Swiss securities, including shares and bonds, and 0.3% for foreign securities. Various exemptions may apply.
  • Issuance stamp tax is charged at 1% of the fair market value of equity contributions to Swiss companies. However, the first CHF1 million of equity in exchange for ownership rights are exempted from issuance stamp duty. Various exemptions may apply.
  • There is no capital gains tax at the federal level. However, capital gains tax is levied at the cantonal and the communal level, based on the company’s equity, with rates ranging from 0.001% to 0.508% (depending on location).
  • Companies that carry out only administrative functions in Switzerland and have no commercial activities there may be eligible for domicile company tax status, with benefits including reduced capital tax rates and tax exemptions on income from qualifying activities, such as dividends, capital gains and revaluation gains. A modest portion of foreign-sourced income, between 0% and 15%, is subject to tax.
  • There is no withholding tax (WHT) on interest and WHT on dividends is either 0% or 35% for resident companies. WHT at the rate of 35% on dividends and 0% or 35% on interest is payable by non-resident companies where no tax treaty is in place. Where a tax treaty is in place and the non-resident can provide the Certificate of Residence, rates range from 0% to 25% on dividends and 0% to 15% on interest.
  • Switzerland has tax treaties with more than 90 countries and territories.
  • Switzerland is a signatory to the Organisation for Economic Co-operation and Development's Multilateral Competent Authority Agreement, through which information is exchanged between tax administrations, to provide a single, global picture on some key indicators of economic activity within multinational enterprises.


Benefits for Regional Treasury Centres

  • Switzerland is one of the world's leading financial centres.
  • Its benign regulatory and fiscal regime makes it an attractive place for companies to locate their European or global treasury operations.
  • There are tax benefits for companies that base their administrative functions in Switzerland. Centralised treasury operations can be carried out under a tax-efficient structure known as a business coordination centre.
  • Cash concentration is available in Switzerland on a domestic and cross-border basis. Companies may include accounts from different legal entities in their liquidity-management structures.
  • Notional pooling is permitted on both a cross-border and domestic basis but used less than cash concentration as Swiss banking law does not permit credit and debit balances to be offset.
  • Switzerland's real-time gross settlement system, SIX Interbank Clearing, is connected to TARGET2, the pan-European real-time gross settlement system.v
  • Switzerland is a member of the European Free Trade Association (EFTA) and has established bilateral trade agreements with the EU.
  • Switzerland has an extensive tax treaty network.
  • Switzerland is located in Europe with trading hours that overlap with Asia and North America.



Banking System

  • Switzerland is a leading global banking centre, offering a diverse range of banking services, which contributes significantly to the country's economy as a whole.
  • However, its position as a private banking centre has diminished as the global clampdown on tax evasion, the demand for transparency and increasing global regulation takes hold. Swiss banks have had to adapt accordingly and are looking to financial technology (fintech) and improved efficiencies to provide a competitive edge.
  • Global changes in the banking sector led to a drop in the number of non-Swiss banks in the country over the past year. At the end of 2019, there were a total of 246 banks, of which 71 were foreign-controlled and 23 were branches of foreign banks. The remaining banks were mainly cantonal, regional and savings, and stock exchange.
  • The banking sector is dominated by UBS and Credit Suisse, which are also two of Europe’s biggest banks.


Bank Accounts

  • Residents may hold foreign-exchange and domestic currency accounts both domestically and overseas, whereby domestic currency accounts are freely convertible to foreign currency.
  • Non-residents may hold foreign and domestic currency accounts, whereby domestic currency accounts may be held overseas and are freely convertible to foreign currency.
  • Interest is available on current accounts.


Legal and Regulatory

  • The Swiss National Bank (SNB) is the central bank and an autonomous institution, and the Swiss Financial Market Supervisory Authority (FINMA) oversees the banking sector.
  • There are no foreign-exchange controls.
  • A company is resident if it is registered or centrally managed in Switzerland.
  • There is anti-money laundering and counterterrorism legislation in place, including regulations that follow European Union directives.
  • A financial intelligence unit has been set up, the Money Laundering Reporting Office – Switzerland (MROS), which is a member of the Egmont Group.

Banks in Switzerland have been facing increasing pressure in the legal and regulatory arena to conform to the tightening of global financial regulations through directives from the following: Basel III, issued by the Basel Committee on Banking Supervision; the government’s own too big to fail (TBTF) regulations; and the US Department of Justice, which came down hard on the Swiss banking sector, demanding the tightening of its tax regulations and imposing significant fines for tax banking fraud.



On 13 January 2018, the revised Payment Services Directive (PSD2) became law across all EU Member States. A revision of the initial PSD adopted in 2007, PSD2 updates and enhances the legal framework for payment systems across the European Economic Area (EEA) single market, to be supervised by the European Banking Authority. Supplemental regulatory technical standards are also being rolled out, from March 2018 to September 2019, to address issues of authentication, monitoring and API standardisation.

The main objective of PSD2 is to provide enhanced consumer security in the developing fintech environment i.e. for electronic payments such as mobile payments, credit transfers, online payments and direct debits.

Measures include:

  • Prohibition of surcharges on credit/debit card payments.
  • Imposition of strict security requirements including the protection of financial data.
  • Increased competition between European payment service providers.
  • Greater consumer rights such as ‘no questions asked’ refunds on direct debits in euros.


Payment Systems


(SIX Interbank Clearing)

National Real-time Gross Settlement (RTGS) system

  • Operated by SIX Interbank Clearing (Swiss Infrastructure and Exchange Interbank Clearing).
  • SIC is made up of two subsystems: SIC for domestic currency (CHF) payments and euroSIC for EUR payments.
  • 350 participants for CHF payments.
  • Processes high value (no maximum value threshold) and urgent CHF-denominated electronic credit and debit transfers and paper-based payments, which are settled across participant banks' correspondent accounts held at the SNB.
  • EUR payments are settled by the Swiss Euro Clearing Bank (SECB) in Frankfurt, which connects to the German component of TARGET2. Also possible to settle through euroSIC.
  • Payments use SWIFT and SIC messaging.
  • Paper-based payments are truncated into electronic imaging and then processed through SIC.
  • Payments may be submitted up to five days in advance of clearing by participant banks. For urgent transactions, payments may be submitted with priority codes for immediate settlement.
  • SIC settles urgent payments during peak hours in real time, while non urgent payments are typically settled overnight.
  • Both the SIC and euroSIC subsystems belong to the single multi-currency platform, multiSIC, which is also connected to TARGET2, Germany’s EMZ (retail payment system), STEP2 (pan-European ACH) and STEP1.


(Euro Swiss Interbank Clearing)

Switzerland’s EUR RTGS system

  • Operated by SIX Interbank Clearing.
  • Processes EUR-denominated transactions.
  • Operates through the SECB, which connects to the German component of TARGET2.
  • 190 participants for EUR payments from Switzerland and other European countries.
  • euroSIC is part of the single multi-currency platform, multiSIC.
  • Processes SEPA payments.
  • Is a subsystem of SIC.



(member of SIC)

Bilateral clearing system

  • Processes low-value retail credit and debit transfers.
  • EUR-denominated cross-border payments are processed by euroSIC (linked to Germany's membership of TARGET2) through SIC's swisseuroGATE connection.
  • Alternatively, EUR cross-border payments can be processed by euroSIC (through swisseuroGATE) and the Euro Banking Association's (EBA's) STEP1 and STEP2 as well as Germany's EMZ retail payment system.
  • Bilateral relations have been set up with the Netherlands' payment system, Equens, to process cross-border SEPA credit transfers and SEPA direct debits between euroSIC and the Equens' Clearing and Settlement System.
  • A cross-border SEPA direct debit processing service was introduced by the SIX Group with the SECB and Luxembourg's CETREL.
  • Since October 2016, the SECB has been the sole clearing facilities provider for SEPA direct debits in Switzerland.
  • Cross-border payments can also be routed through SWIFT messaging and settled through accounts held with overseas correspondent banks.
  • Participants include most banks in Switzerland.
  • Final settlement is done through SIC.


Single Euro Payments Area
Pan-European payment infrastructure
  • Initiated by the EPC (European Payments Council).
  • Operates a common set of payment instruments, infrastructures, procedures and standards for euro transactions within Europe.
  • SEPA countries include 28 EU member states and European Free Trade Association member states, of which Switzerland is one.
  • Electronic retail payments within SEPA are regarded as domestic payments.
  • SEPA is not applicable to urgent, high-priority payments or cheques.
  • PSD2, a Europe-wide legal framework for payments, is not applicable in Switzerland.
  • There are two SEPA payment instruments: SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD).


(Trans-European Automated Real-time Gross Settlement Express Transfer system)
RTGS for the eurozone
  • Operated by Eurosystem. Second generation of TARGET.
  • Processes EUR-denominated transactions which are settled and with finality in real time. There are no value thresholds.
  • Settles interbank and individual customer payments as well as other institutional payments and high-value net settlement systems.
  • Operates SWIFT messaging.
  • Swiss EUR transactions are settled through SECB, which connects to the German component of TARGET2.



Payment Instruments


Credit Transfers

  • Credit transfers may be paper-based or automated, although the vast majority are automated.
  • SIC clears and settles both CHF and EUR transactions same day if payments are received before 15.00.
  • Low-value, non-urgent and bulk credit transfers are done through SIC for next-day settlement, but may be submitted five days in advance using priority codes.
  • Paper-based transactions are truncated into electronic images and then processed.
  • Used for payroll, supplier and third-party transactions, as well as retail and commercial transactions.
  • EUR domestic and cross-border transactions are settled through euroSIC or SECB in Frankfurt, which connects to the German component of TARGET2.


Direct Debits

  • Direct debits are known as Lastschriftverfahren (LSV).
  • Direct debits are used for low-value, regular payments such as utility bills.
  • Direct debits are available in both CHF and EUR. CHF direct debits are processed through SIC and EUR direct debits are processed through euroSIC.
  • There is a right of refusal on standard direct debit agreements (LSV+), but it’s not applicable to Business Direct Debit (BDD) agreements.
  • Direct debits are initiated through SIX Paynet’s payCOMweb online application. SIC clears direct debits in both CHF and (via euroSIC) EUR through the LSV+ and BDD procedures.
  • The SEPA Direct Debit (SDD) scheme clears EUR domestic and cross-border transactions through SECB in Frankfurt, which connects to the German component of TARGET2. It is also possible to clear bilaterally through euroSIC and the Dutch retail payment system operated by equensWorldline.


Card Payments

  • Payment cards, in particular debit cards, are the most widely-used form of cashless payment by volume, with debit and credit card penetrations being 1.24 and 0.71 per capita, respectively.
  • The main debit card brands in use are Postfinance card and Maestro/EC card, and the main credit cards are Visa and MasterCard. American Express and Diners Club are also in use. All cards are SEPA- and Europay, MasterCard and Visa (EMV)-compliant and are processed through SIC, except American Express payments, which are processed through the International Card Association.
  • Debit card transactions accounted for 28% of total payments in 2020.
  • ATM terminals are operated either by Swiss Post (Postomat) or the banks (Bancomat) or the national EFTPOS network, all of which are EMV-compliant.
  • Contactless card usage has shown strong growth since 2018, with 59% of debit card transaction value and 57% of credit card transaction value being contactless.


Online Payments

  • The Swiss Financial Market Supervisory Authority (FINMA) has initiated a series of schemes supporting the fintech sector, especially in light of the country’s fast-changing banking environment and the speed of global digitization. This culminated, for example, in the adoption of a regulatory sandbox and the launch of a new licensing category for fintech companies, providing a flexible backdrop from which companies are able to innovate.
  • The Swiss e-commerce market is worth CHF10.9 billion, 27% of which is mobile commerce.
  • Despite the relatively high smartphone penetration of 73.5%, the use of electronic payments is quite modest, with 17% of consumers occasionally making mobile payments and 83% never using them (Deloitte, 2017). However, mobile transactions are predicted to increase significantly as payment infrastructure becomes more widespread and mindsets change, especially among the younger generation. Retailers and mobile banks also offer mobile apps.
  • Bank transfers, bank cards and digital wallets accounted for 53%, 24% and 20% of online payments in 2018, respectively.
  • High internet penetration has seen a correspondingly high use of online shopping, using PayPal, credit cards and cash on delivery as the most popular forms of payment.
  • MasterPass is operated by SIX Payment Services and MasterCard. This scheme enables online and mobile transactions for MasterCard, Visa and American Express card holders.
  • SwissWallet, operated by Aduno Group, Netcetera and Swisscard, can be used in conjunction with MasterPass and enables online, mobile and contactless card payments.
  • The domestic digital wallet, Twint, is another popular system, with global players Apple Pay, Samsung Pay and PayPal also having a strong presence.
  • Up to 2021, the mobile commerce market is expected to increase at a compound annual growth rate of 15%, equating to double overall e-commerce growth.

Digital Currencies

  • Switzerland hosts a thriving cryptocurrency market, with some of the world’s largest initial cryptocurrency offerings (ICOs) either planned or executed in the country.
  • Finma, SNB and the Swiss Bankers’ Association are keen to create a welcoming cryptocurrency environment, extending the country’s progressive approach, and to develop regulations and rules for working within this fast-changing sector.
  • Finma has issued a set of ICO guidelines that focus on the following areas: function and transferability of tokens; adherence to the Anti-Money Laundering Act; and the application, where necessary, of securities regulations.
  • Bitcoin and bitcoin exchanges are legal.


Cash, Cheques and Other Payment Schemes

  • A survey by the SNB showed that cash is the second most common form of payment, especially for low-value retail transactions, being used for 23% of the value of all purchases.
  • Cheques are in use, but are being rapidly overtaken by the use of electronic payments as a form of cashless payment. The main cheques in use are postal cheques.
  • Cheques are truncated into electronic images and then processed through SIC next day.
  • Postal giros are used for retail payments. They are cleared through PostFinance and final settlement is done through SIC same day (if submitted by 13.00 CET).



Switzerland Market Profile Diagram

1 (Main) reduced and zero-rated VAT for certain goods and services

2 (Federal) CIT is also levied at cantonal and communal levels

3 (Progressive) max rate on incomes over CHF755,200 for single taxpayers



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Sources: IMF, The Heritage Foundation, World Economic Forum, PwC, Bank for International Settlements, Swiss Financial Market Supervisory Authority, Swiss National Bank, Association for Financial Professionals, CNBC, OECD, Swift, DBS, J.P. Morgan, Zurich University of Applied Sciences (ZHAW).

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only. The information is assembled based on information available and accurate as at Dec 2019.

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