Nation’s Business Friendly Image Challenged by Swiss Referendums

Switzerland is one of the most sympathetic nations in terms of caring about businesses. Switzerland cares so much about businesses big and small that in 2012 the country’s citizens voted against an extra two weeks of annual holiday time. They were concerned about the economical impact it would cause for the nation.

Switzerland’s driving work ethic paired with a very stable political environment, a highly skilled workforce, and a very accommodating tax system, has attracted a large number of corporate all-stars to do business with the country in the past few years.

On Sunday, November 30th, the Swiss will vote on 3 of popular initiatives, concerning gold, immigration, and taxes. Between these concerns and other recent motions many questions have risen regarding the nation’s business friendly environment and attitude.

“Switzerland has historically been good for companies like us,” says Ulrich Spiesshofer, chief executive of the engineering conglomerate, ABB. “Any weakening of the system is a grave worry.”

Regardless of defeat, the motions have attracted much support, so as to suggest that even Switzerland is not entirely immune to the same populist pressures Europe as a whole faces.

Ecopop might limit immigration to 0.2 per cent of the resident population. This motion has alarmed businesses. Many worry this could make it harder to hire skilled staff and ruin relations with the EU, which would be detrimental as Switzerland’s largest export market is the EU.

Another initiative would force the central bank to hold 20% of its assets in gold. There would also be a ban from selling any of its holdings of the metal. “Gold bug” supporters say it would strengthen Switzerland’s independence but on the other hand, the central bank has warned that this plan will make it job harder in terms of ensuring economic stability.

The third option being voted on would do away with the system of tax privileges for wealthy foreigners that prompted such people as Michael Schumacher, and Ingvar Kamprad, to call Switzerland home.

“Public trust in business has diminished, although it is fair to say that this is not unique to Switzerland,” says Stéphane Garelli, a professor at Lausanne’s IMD business school. “There is no doubt that 10 years ago, a business manager was held in very high esteem. This is disappearing.”

Patrick Emmenegger, professor at the University of St Gallen, is quoted in saying, “the extent to which people are prepared to vote in the country’s economic interest, when faced with a trade-off with other issues such as sovereignty, seems to be changing. It doesn’t seem that the economic arguments have the same traction they did a decade ago.”

None of this is to say that there will be a business retreat from Switzerland. Votes such as the one in February to limit EU immigration are a quick reminder to businesses that the predictability of the country’s legal framework, can be altered by popular vote.

“Switzerland is still a good place for business,” Mr Garelli says. “But those whose job it is to persuade companies to invest here are having to work hard at the moment.”