Zurich-based companies looking to relocate to Zug, director of finance confirms

Heinz Tännler, the cantonal director of finance, has confirmed that the canton has had enquiries from companies currently based in Zurich about relocating to Zug.

This is as a result of what might happen if the proposed tax reforms are given the green light in a national referendum on Sunday 19 May.

Acceptance of the reforms would mean internationally operating companies would not benefit financially to the same extent they have been able to hitherto but certain cantons, Zug among them, have already indicated they would lower their own rates of corporation tax accordingly, down to 12 per cent, in fact, much lower than Zurich would be able to, down to 19.7 per cent from 21.2 per cent; hence this interest in companies moving to Zug. Tännler (photograph) further explained that all enquiries relating to the Greater Zurich area, to which Zug belongs, actually related to moving here.

Credit Suisse recently compiled a list of jurisdictions, including foreign ones, comparing levels of corporation tax, with Zug coming second in a list of Swiss cantons after Nidwalden, and in sixth place overall, preceded only by Qatar, the UK Crown Dependency of the Isle of Man, the Bahamas and the UK Overseas Territory of the Cayman Islands, where, in the case of the latter three jurisdictions, no corporation tax was levied at all. The percentages in relation to Swiss cantons were those based on the lower rates planned to be introduced following acceptance of the referendum, though the figures mentioned here are not precise as they are taken from a graph. Of note is that both Zurich and Bern were way down the list, imposing rates of corporation tax of around 18 per cent and 22 per cent respectively, the Swiss average appearing to be around 14 per cent, that of the UK 19 per cent, the USA 27 per cent, Germany 30 per cent and France at 33 per cent. Other jurisdictions listed included Hong Kong at 17 per cent and Liechtenstein at 12.5 per cent.

Tännler went on to say that the canton did not actively lure companies from Zurich to move to Zug, adding how the financial authorities of both cantons enjoyed a good relationship, not least with Tännler and his his Zurich counterpart, Ernst Stocker, getting on so well. Neither did Zug actively lure companies from central Swiss cantons, though meetings between the directors of finance of all of them took place on a regular basis. Neither was the flow of companies from one canton to another a one-way street, with some companies moving away from Zug, as in the recently reported case of Shire, for example, which was relocating, in part, to Zurich.

“Not that we conceal ourselves, either,” added Tännler, as he explained that, should a company approach Zug, steps were taken to show off the canton at its best with all it has to offer. Other cantons, too, had their advantages, he conceded, Zurich enjoying greater proximity to the airport, a central location and high quality of living.

This article is based for the most part on one by Harry Ziegler.