Placing contractors in Switzerland? Here’s what you need to know
Michelle Reilly, managing director of CXC Global
Switzerland has long been a favoured destination for contractors, notably for its stable economy, earning potential and rich culture. Its three main employment hubs in Zurich, Basle and Geneva - as well as range of other locations - all provide potential opportunities in a number of industries. But what do the agencies placing these professionals need to keep in mind?
Switzerland’s economy is continuing to expand. The State Secretariat for Economic Affairs (SECO) recently revised its forecasts for annual GDP growth and predicted a rise of 0.8% by the end of the 2015. This trend of expansion is forecast to continue over the next two years with GDP expected to rise by 1.5% and 1.9% in 2016 and 2017 respectively. The government body also recently reviewed a number of other key macroeconomic indicators and noted that while they don’t currently show signs of growth, they do reflect a significant degree of stabilisation. With economic conditions elsewhere in Europe, and in fact globally, somewhat unstable, these positive signs highlight the country as a real opportunity for contractors.
In particular, there is significant demand for pharmaceutical and biotechnology experts as a result of its position as a global health hub. This is one of Switzerland’s key industries and accounts for 30% of its total exports meaning there is near constant demand for contractors in these fields. In addition, firms have also sought IT professionals, reflecting the trend seen across a number of major economies.
There are a few things you need to consider when thinking about placing contractors in Switzerland.
For a start all contractors (EU nationals included) need a work permit in Switzerland unless they are Swiss nationals. There are then variations on the process for applications for differing EU nationals.
One unique issue is that contractors will be unable to work via an international company, as domestic laws stipulate that all contractors must be employed on Swiss payroll. A correctly licenced local Swiss entity is required to invoice and contract with your Swiss end client as a non-Swiss entity is not able to do so. Another difficulty facing firms and contractors is the complex tax system as Switzerland is divided into 26 cantons and each one has its own laws and tax regulations. There are major legislative differences between cantons and it should be considered where they will be based before coordinating arrangements.
All in all there are a number of available opportunities across a range of markets, many of which provide huge earning potential, particularly in the pharmaceutical sector. However, as we’ve mentioned the domestic tax system can be highly complex and something as simple as a change of address could mean contractors and the agencies placing them could be exposed to an entirely different tax set up. If individuals and firms are unsure of the steps that need to be taken they should partner with a specialist in order to remain on the right side of the law.