Scope for Indian businesses in Swiss canton

By Our Special Correspondent

CHENNAI, JUNE 20. The canton of Vaud (capital: Lausanne) in Switzerland is keen to encourage businesses from India having high-skilled operations, according to Mr. Ravi Chaudhry, India Representative of the canton.

Addressing members of the Southern India Chamber of Commerce and Industry (SICCI) here on Tuesday, Mr. Chaudhry said setting up a base of operations in Vaud, located in the Greater Lake Geneva area, offered advantages of low cost of real estate combined with access to the Swiss and the whole European market. All products with 50 per cent Swiss added value were allowed duty-free entry into the 15-member European Union. Businesses also could be set up for trading and service sectors.

Business in Switzerland, Mr. Chaudhry said, offered the benefit of the image of ``cultural neutrality'', unlike those in member- countries of the EU which tended to be identified with respective national characteristics. ``Businesses in Vaud and Switzerland enjoy the advantage of being both European and Swiss,'' he said.

The ``business support system'' operated by the Council for Economic Development, Lausanne (DEV), offered free of charge professional support to start-up enterprises in the matter of company registration, business premises, work and residence permits, tax exemptions, interface with the authorities and recruitment, placement and training of personnel. DEV could also offer inputs for commercial and technology partnerships, arrange financial assistance and advice and furnish leads for opening up foreign markets all over Europe.

Explaining that what Vaud sought was not foreign investment per se since it was not short of investments but expansion of high- skill sectors such as software and research and development, Mr. Chaudhry said Switzerland had lower rates of inflation, unemployment and taxation than member-countries of the EU.

``Sharing languages and borders with Germany, France, Italy and Austria'', Vaud was home to MNCs in IT-telecom, medical and biotechnology, microengineering and machinery, food and nutrition and watch-making industries.

Mr. Chaudhry said the most advisable method of having a presence in Vaud would be by way of registration of a local company with a minimum equity of one lakh Swiss francs (about Rs. 28 lakhs). Businesses could enjoy total tax exemption up to ten years depending on various parameters.

The gross tax on corporate profits ranged between 21 and 23 per cent, while VAT amounted to 7.5 per cent against 15 to 21 per cent in EU countries, and there was also a tax, levied at the State and municipal level, on capital deployed at the rate if 0.24 per cent to 0.30 per cent. The marginal income-tax for resident individuals was 21.2 per cent but corporate and individual taxes were subject to benefits arising from the double taxation avoidance agreement between India and Switzerland.

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Section  : Business
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