Switzerland: running like clockwork

Switzerland – a country which conjures up images of snowy slopes, lakes and villages, railways which run on time, the best precision watches in the world and delicious chocolate. The Swiss like to indulge in referendums and frequently turn out to express their views on a variety of subjects. It is also a market which is very accessible for UK exporters and the design and quality of Swiss manufactured goods are attractive to importers seeking to act as UK sales agents. The country has a legal and regulatory business friendly environment.

The Swiss people rejected negotiations on EU membership in 2001 and their country is a member of the European Free Trade Association. Despite not being an EU member many aspects of the Swiss economy, but not all, have been aligned in recent years to mirror EU rules and regulations. The state of Lichtenstein has an economic agreement with Switzerland and the two countries can be treated as one for trading purposes by UK companies.

Three languages are in common use: German, French and Italian and in business, English is also widely spoken.  Because Switzerland embraces so many European cultures and has a central location, it is highly regarded as a market which can accurately gauge the sales potential for innovative new products throughout the continent. Swiss political and financial stability also make the country an attractive trading environment for UK exporters and importers seeking new opportunities.

Switzerland is one of the wealthiest countries in the world and its bilateral trade with the UK is worth around £32 billion and is growing. The cap on the value of the Swiss Franc against the Euro was removed at the beginning of 2015 which immediately strengthened the former. The weakness of the pound and the strength of the Swiss Franc combine to help the competitiveness of UK products. VAT in Switzerland is much lower than in other European countries. Their sales tax is known as MwSt and is applied to most products at a rate of 8%. Some Swiss companies have countered high Swiss labour costs by re-locating their back office infrastructure to other Eastern European states.

Whilst Swiss buyers are price conscious more important to them is quality, design and reliability of supply, and they give more weight to these factors than cost when determining the overall value for money. Products which do well in the Swiss market are pharmaceuticals and medical equipment, specialised chemicals, highly engineered machinery for the automotive and aerospace trades, and electronic equipment. Paper and paper-based products are also expensive to produce in Switzerland and there are excellent market opportunities for UK suppliers in this field.

The CERN organisation based in Geneva has a worldwide reputation for excellence in engineering and is anxious to develop trade relationships with new suppliers overseas who can show they possess innovative skills relating to their products in this field.

There are excellent transport links between the UK and Switzerland and driver-accompanied road trailer operations dominate the market. Because Switzerland is not an EU member consignments have to undergo either export or import customs clearance in both countries. Documentation procedures are subject to EFTA rules and the expertise of a freight forwarder versed in the Swiss market is invaluable.  There is no Swiss import tax on many commodities but the forwarder’s advice can highlight where there may be a liability for duty.

As far as insurance of the goods is concerned both countries are signatories to the CMR Convention relating to international road transport. As this, in certain circumstances, may limit the liability of the forwarder/haulier for loss or damage it is prudent for the exporter/importer to have in place their own goods in transit policy.

Switzerland can be an exciting market for a UK company seeking to break into a new field. As with many overseas ventures, it can take time to establish relationships but Swiss negotiators are usually knowledgeable and experienced and anxious to develop partnerships which will be long standing and financially beneficial to all involved – and when the business is done there is always the thought of that delicious chocolate as an incentive to keep going back!

Rob Pike – Managing Director – International Forwarding

2017-03-31T13:55:45+00:00 March 7th, 2017|Regional Focus, Switzerland|