About Switzerland 

Switzerland has one of the most stable and open economies in the world, being ranked fourth on the 2017 Index of Economic Freedom. Switzerland's labour force is extremely specialised, allowing the country to be a forerunner in high value production in the engineering, electrical, metal, life-sciences and information and communication industries. To date, Switzerland has one of the highest GDP per capita incomes in the world. Switzerland's currency, the Franc, is also known as the "safe haven currency", because of Switzerland's stable economic outlook throughout the years.

As Switzerland is a relatively small country, the economy relies heavily on trade for long-term stability. To bolster its openness towards the external market, Switzerland boasts a tariff rate of 0% for most imports except agricultural products. The well-developed financial sector offers a suite of financial instruments, which have also allowed the banking industry to remain well capitalised, giving Switzerland its status as an investment haven.

Additionally, foreign investors may enjoy the same regulatory treatment as Switzerland's national investors, such as the same tax regulation and corporate laws. Regulatory frameworks remain favourable to businesses which are efficient and transparent.

The country's geographical location has also allowed accessibility to the Europrean, African and Middle Eastern markets. Switzerland's state-of-the-art infrastructure further enhances its connectivity within the region.


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.
In-house Banks (IHB) In-house banks provide corporate treasurers with another method of centralising and consolidating their business.
Intercompany loans Similar to bank loans, intercompany loans refer to lending between entities within the same group.

Corporate Treasury in Switzerland

Switzerland has been rated as the most competitive economy in the world for seven consecutive years 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 10th in the world for financial market development in The Global Competitiveness Report 2015-2016.
  • It ranks Switzerland 20th in the world for the soundness of its banks, while it is ranked top for both availability and affordability of financial services. It also rates it highly for the ease of access to loans, venture capital and financing through local equity markets.
  • Switzerland has excellent business infrastructure and high levels of innovation, a highly skilled multilingual workforce and strong legal protection. Switzerland has 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.
  • Switzerland currently has negative interest rates.


Sophistication of Banking Systems

  • Switzerland is one of the world's leading banking centres.
  • The banking sector is dominated by Switzerland's two largest banks, UBS and Credit Suisse. There are also a number of cantonal and regional banks, as well as 28 branches of foreign banks and 58 representative offices of foreign banks.
  • Switzerland's foreign-exchange market has an average daily turnover of USD156 billion (Bank for International Settlements triennial global survey 2016).
  • 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.



  • Tax is charged at a federal, cantonal and communal level.
  • Corporate income tax (CIT) is charged at a federal level at a flat rate of 8.5% on profit after tax. CIT is deductible for tax purposes. Each canton also levies its own taxes. The overall maximum range of CIT is generally 11.5% to 24.2%, depending on a company's location.
  • The government recently drafted a new set of tax proposals that aim to increase Switzerland's competitiveness as a business location.
  • Resident companies pay tax on profits generated in Switzerland. Foreign-sourced is generally excluded, although some cantons take it into account for progressive tax purposes. Non-resident companies may be subject to CIT on income generated in Switzerland under certain circumstances, such as if they are partners of a Swiss business, have a permanent establishment in Switzerland, or own real estate in Switzerland.
  • VAT is charged at a standard rate of 8%. Certain goods and services qualify for lower rates of 2.5% and 3.8%.
  • A securities transfer tax of 0.15% is levied on the transfer of securities, including shares and bonds, of a tax resident in Switzerland and 0.3% for securities issued by a tax resident of a foreign country. Various exemptions apply.
  • Corporate capital tax is levied at the cantonal and the communal level, based on a corporate's equity, with rates ranging from 0.001% and 0.525%.
  • There is no withholding tax (WHT) on branch profits from Switzerland to the foreign head office.
  • Interest income is taxable income. Interest expenses paid to third parties are tax-deductible. Interest paid to related parties must reflect the fair market rate and are subject to limitations.
  • Foreign-exchange losses are tax-deductible.
  • Companies that only carry out administrative functions in Switzerland but have no commercial activities there may be eligible for domicile company tax status, with benefits including reduced capital tax rates and income from qualifying activities, such as dividends, capital gains and revaluation gains, tax-exempt. A modest portion of foreign-sourced income, between 0% and 15%, is subject to tax.
  • There is no WHT on interest, and WHT on dividends is either 0% or 35% for resident companies. Non-resident companies pay a rate of 35% on dividends and 0% or 35% on interest. Where a tax treaty is in place rates range from 0% to 20% on dividends and 0% to 15% on interest.
  • 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.
  • Switzerland has tax treaties with more than 90 countries and territories.


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 and notional pooling are available in Switzerland on a domestic and cross-border basis. Companies may include accounts from different legal entities in their liquidity-management structures.
  • Switzerland's real-time gross settlement system, SIX Interbank Clearing, is connected to TARGET2, the pan-European real-time gross settlement system.
  • Switzerland is a member of the European Free Trade Association (EFTA), and has established bilateral trade agreements with the European Union (EU).
  • Switzerland has an extensive tax treaty network.
  • Switzerland is in Europe with trading hours that overlap with Asia and North America.




Banking System

  • There are 266 banks in Switzerland, of which 85 are foreign-controlled banks and 26 are branches of foreign banks.
  • Up until June 2015, UBS and Credit Suisse were the two major players in Switzerland's banking sector. However, a challenging Swiss banking environment has seen the major Swiss banks restructuring to adapt accordingly, with UBS establishing a wholly owned subsidiary, UBS Switzerland, and as such they are classified as two separate banks. Hence, there are three main Swiss banks: UBS, UBS Switzerland and Credit Suisse.
  • The upheavals in the banking sector have led to a consolidation of foreign and Swiss banks, with a decline in the number of banks from 275 in 2014 to 266 one year later.
  • This is all the more pronounced given that Switzerland is a leading global banking centre, offering a broad and diverse range of banking services and is a major contributor to the country's economy as a whole.


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 as they conform to directives from Basel III, issued by the Basel Committee on Banking Supervision, 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. 




Payment Systems


(SIX Interbank Clearing)

Switzerland's national TARGET2-linked Real-time Gross Settlement (RTGS) system

  • SIC is a subsidiary of SIX (Swiss Infrastructrue and Exchange).
  • SIC is made up of two subsystems: SIC for domestic currency (CHF) payments and euroSIC for EUR payments.
  • Both the SIC and euroSIC subsystems belong to the single multi-currency platform, multiSIC.




  • Processes high value (no maximum value threshold) and urgent CHF-denominated electronic credit and debit transfers and paper-based payments.
  • 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.
  • CHF payments are settled across participant banks' correspondent accounts held at the SNB, while EUR payments are settled via the SECB.
  • Activates final settlement of participants' net balances from Postfinance.
  • 358 participants.
  • SIC is part of the single multi-currency platform, multiSIC.
  • Is a subsystem of SIC.



(euro Swiss Interbank Clearing)


  • Processes EUR-denominated transactions.
  • Operates through the Swiss Euro Clearing Bank (SECB) which is a member of Germany's TARGET2.
  • 190 participants from Switzerland and other European countries.
  • euroSIC is part of the single multi-currency platform, multiSIC.
  • 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 (connected 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.
  • A pan-European real-time infrastructure for EUR-denominated transactions is under development by EBA Clearing (which operates EURO1, STEP1 and STEP2) and Italy's SIA Group (which is one of the operators of STEP2).
  • 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 and settled through accounts held with overseas correspondent banks.
  • Participants include most banks in Switzerland.
  • Final settlement is done through SIC.



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.
  • 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.
  • Switzerland is linked to the Single Euro Payments Area (SEPA) scheme for the settlement of EUR retail transactions.


Direct Debits (auto-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 not on Business Direct Debit (BDD) agreements.
  • A new direct debit scheme was introduced in 2016 to replace LSV+ and BDD, with full replacement due by 2018. Under this new scheme, there will be an option for right of refusal, and it will be linked to an existing automated e-billing system.
  • The SEPA Direct Debit Schemes have been in operation since 2 November 2009, and since 1 November 2014 have been accepted by banks outside the Eurozone.



  • Cheques are in use, but are being rapidly overtaken by the use of electronic payments as a form of cashless payment.
  • Cheques are truncated into electronic images and then processed through SIC next day.


Card Payments

  • Payment card transactions are fast increasing in popularity, especially the use of debit cards. There are 6,400,639 credit cards and 10,322,661 debit cards in circulation in Switzerland.
  • The main debit card brands in use are Postcard, MasterCard/Maestro and Visa/Visa V Pay, and Visa and MasterCard are the main credit cards, with American Express and Diners Club 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.
  • There are 7,024 ATM terminals operated by Swiss Post (Postomat) and the banks (Bancomat) as well as a national EFTPOS network, all of which are EMV-compliant.


Other Payment Schemes

  • 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).
  • There are electronic money (e-money) schemes available in the form of reloadable prepaid cards, with 2,577,067 e-money cards in circulation. The most popular is MasterPass, which is operated by SIX Payment Services and MasterCard. This scheme enables online and mobile transactions for MasterCard, Visa and American Express card holders. SwissWallet is another payment platform operated by Aduno Group, Netcetera and Swisscard which is also in conjunction with MasterPass. It enables online, mobile and contactless card payments.



Recent developments


SIX Payment Services Partners with Worldline

The payment services business of Switzerland’s SIX Group is entering a strategic partnership with e-payments firm Worldline in a deal that values the cards unit at USD2.75 billion. Under the terms of the transaction, SIX Payment Services will receive a 27% stake in Worldline. The combined company will be the largest European provider in the payments industry. The deal is expected to be closed in the fourth quarter of this year.

Read more about the development here.


Switzerland Embraces WealthTech

WealthTech is the most crowded segment of Switzerland’s FinTech sector, with 60 ventures, twice as many as in the blockchain and cryptocurrency space and three times as many as in the payments area, according to Swisscom’s Swiss FinTech Startup Map. Innovation is being driven by Switzerland’s historic position as a wealth management centre, with incumbents adopting new technology, as well as the rise of hybrid advisors, that combine automated wealth managers and human investment advisers, and the use of cryptocurrencies as a diversification tool.

Read more about the development here


Microwave-based Trading Launched

SIX has launched the first microwave-based trading service in Europe. The use of microwave technology will enable trade data from all securities listed at SIX to be transmitted more than twice as fast as if more common fiber optic technology were used. The new microwave network will connect Zurich to London, Frankfurt and Milan, enabling those using the Swiss exchange to execute their trading strategies faster, enhancing risk management and liquidity.

Read more about the development here



This Market Profile is brought to you by DBS. Get in touch with us for further insights on doing treasury in Switzerland and take advantage of our innovative solutions to empower your business. Click here to find out more.



Sources: IMF World Economic Outlook database, October 2016; CIA World Factbook; Trading Economics; PwC

Please note that the information contained in this document, assembled based on information available and accurate as at July 2017, is of a general nature only and is subject to change whether for economic, political, social or other reasons.


Last updated on 07 Jun 2018