Switzerland

Nick DiBella

Overall Score: 80.5 World Rank: 5

Switzerland Quick Facts/United States

  • Population: 8.0 Million/316.4 Million
  • GDP: $371.6 Billion/$16.8 trillion
  • GDP Growth: 2.0%/1.9%
  • GDP Per Capita: $46,430/$53,101
  • Inflation: -0.2%/1.5%
  • Foreign Direct Investment: $-5252.1 Million/$187.5 Billion

Legal System

Switzerland was ranked 7th out of 177 countries in Transparency International’s 2013 Corruption Perceptions Index. Protection of property rights is strongly enforced, and an independent and fair judicial system is institutionalized throughout the economy. Commercial and bankruptcy laws are applied consistently and efficiently. Intellectual property rights are respected and enforced.

Competitive Markets

The competitive regulatory framework promotes business formation and operational efficiency. With no minimum capital required, starting a business involves six procedures. Labor regulations are still relatively flexible. Proportionately, Switzerland’s agricultural subsidies are among the highest in the world and dampen innovation in agriculture, but the government did cut solar subsidies by 10 percent in 2014.

Limits on Government Regulation

The competitive regulatory framework promotes business formation and operational efficiency. With no minimum capital required, starting a business involves six procedures. Labor regulations are still relatively flexible. Proportionately, Switzerland’s agricultural subsidies are among the highest in the world and dampen innovation in agriculture, but the government did cut solar subsidies by 10 percent in 2014.

An Efficient Capital Market

Switzerland has a 0 percent average tariff rate and is a member of the European Free Trade Association. Agricultural subsidies are significant. Foreign and domestic investments are generally treated equally. The highly competitive and well-developed financial sector offers a wide range of financial services and encourages entrepreneurial activity. Banking regulations are sensible, and lending practices are prudent.

Monetary Stability

The competitive regulatory framework promotes business formation and operational efficiency. With no minimum capital required, starting a business involves six procedures. Labor regulations are still relatively flexible. Proportionately, Switzerland’s agricultural subsidies are among the highest in the world and dampen innovation in agriculture, but the government did cut solar subsidies by 10 percent in 2014.

Low Tax Rates

Switzerland’s tax system operates mostly on the cantonal level. The top effective federal income tax rate is 11.5 percent, and the combined rate can be over 40 percent. The federal corporate tax rate is 8.5 percent, but the combined rate can reach 24 percent. The tax burden is equal to 28.2 percent of the economy, and public expenditures are equivalent to 34.1 percent of domestic production. Public debt equals 50 percent of GDP.

Free Trade

Switzerland has a 0 percent average tariff rate and is a member of the European Free Trade Association. Agricultural subsidies are significant. Foreign and domestic investments are generally treated equally. The highly competitive and well-developed financial sector offers a wide range of financial services and encourages entrepreneurial activity. Banking regulations are sensible, and lending practices are prudent.
Switzerland Economy (Alazzawi ECON3)
This video is about Switzerland's economy. The video gives information on why Switzerland's economy is so good and successful.