Corporate Treasury & Cash Management in Switzerland

Corporate Treasury & Cash Management in Switzerland

At a glance

About Switzerland

Switzerland has one of the most stable and open economies in the world, and it was ranked fourth in the 2021 Index of Economic Freedom by the Heritage Foundation. 

Switzerland has a highly developed services sector focused on the financial services industry, and it also excels in high-tech and knowledge-based production. Other key sectors include the chemical, pharmaceutical and life-sciences industries. Switzerland has one of the highest levels of per capita gross domestic product (GDP) in the world. Its currency, the Swiss franc, is regarded as a “safe haven currency” due to the country’s stable economy. 

As Switzerland is a relatively small country, the economy relies heavily on trade. To bolster its openness towards external markets, Switzerland has low tariffs on imports. Switzerland’s status as an investment haven is due to its highly developed financial sector offering a suite of financial instruments, while the Swiss banking industry is well capitalised. 

Foreign investors typically enjoy the same regulatory treatment as Switzerland’s national investors, including the same tax regulation and corporate laws. There are no significant barriers to foreign investment. The country’s geographical location gives it access to the European, African and Middle Eastern markets. Switzerland’s state-of-the-art infrastructure further enhances its connectivity within the region.  

Corporate Treasury in Switzerland 

Switzerland has been consistently rated as one of the top five most competitive economies in the world by the World Economic Forum. In this section, we highlight some of the key factors relevant to treasury and cash management in Switzerland.  

Financial Market Development 

  • Zurich is ranked 10th and Geneva is ranked 20th in the 2021 Global Financial Centres Index by Z/Yen Group. 
  • Switzerland has excellent business infrastructure, high levels of innovation, a highly skilled multilingual workforce and strong legal protections. Switzerland offers one of the most stable macroeconomic environments in the world.  
  • There are no foreign-exchange controls in Switzerland. The Swiss National Bank (SNB) regularly intervenes in the market to try to limit the Swiss franc’s appreciation.  
  • Switzerland is positioning itself as a leading centre for sustainable financial services and green financial technology (fintech) solutions. 

Sophistication of Banking Systems 

  • Switzerland is one of the world’s leading banking centres.  
  • There are more than 240 banks in Switzerland, including state/canton, regional and savings banks, stock-exchange banks, around 70 foreign-controlled banks, and more than 20 branches of foreign banks.  
  • Switzerland has a very active debt market with both government and corporate bonds widely available. The market is dominated by corporate issuers, with foreign issuers accounting for a greater market share than domestic. Yields on Swiss government bonds are currently negative.  

Regulatory Bodies 

  • The banking industry is regulated by the Swiss Financial Market Supervisory Authority (FINMA). SNB is the central bank.  


  • Corporate income tax (CIT) is charged at a federal, cantonal and communal level.  
  • At the federal level, the CIT rate is 8.5% on profit after-tax. CIT is deductible for tax purposes, giving a federal CIT rate on profit before-tax of around 7.83%. Each canton and commune also levies its own corporate income and capital taxes at different rates.  
  • Tax reforms abolishing special canton tax regimes, such as for holding companies and domicile companies, came into force on 1 January 2020. Also, most cantons either reduced or plan to reduce their CIT rate, giving an effective tax rate of between 12% and 15% in the majority of cantons.  
  • Resident companies are taxed on their worldwide income, except for profits derived from foreign branches and foreign immovable property. Non-resident companies are taxed on their Swiss-sourced income only. There is no branch profits remittance tax on the remittance of profits to the head office by the branch of a foreign company.  
  • Interest income is a taxable item. Interest expenses paid to third parties are generally tax-deductible. Interest paid to related parties must reflect the fair market rate and is subject to limitations. Please note that on an annual basis, the tax authorities in Switzerland issue safe harbour interest rates to be used on loans denominated in Swiss francs.  
  • The standard Value Added Tax (VAT) rate is 7.7%, with certain goods and services qualifying for lower rates of 2.5% or 3.7% (including the hotel and lodging industry). VAT exemptions exist for most banking services and insurance premiums.  
  • A securities transfer tax of 0.15% is levied on the transfer of Swiss securities, including shares and bonds, and 0.3% is levied for foreign securities. Various exemptions may apply.  
  • Issuance stamp tax is charged at 1% of the fair market value of equity contributions to Swiss companies. However, the first CHF1 million of equity in exchange for ownership rights are exempted from issuance of stamp duty. Various exemptions may apply.  
  • There is no capital gains tax at the federal level. However, capital tax is levied at the cantonal and the communal level, based on the company’s equity, with rates ranging from 0.001% to 0.5% (depending on location).  
  • There is no withholding tax (WHT) on interest. WHT on dividends is either 0% or 35% for resident companies. WHT, at the rate of 35% on dividends and 0% or 35% on interest, is payable by non-resident companies where no tax treaty is in place. Where a tax treaty is in place and the non-resident can provide a Certificate of Residence, rates range from 0% to 25% on dividends and 0% to 15% on interest.  
  • Switzerland has tax treaties with more than 90 countries and territories.  
  • Switzerland is a signatory to the Organisation for Economic Co-operation and Development’s Multilateral Competent Authority Agreement, through which information is exchanged between tax administrations, to provide a single, global picture on some key indicators of economic activity within multinational enterprises.  

Benefits for Regional Treasury Centres 

  • Cash concentration is available in Switzerland on a domestic and cross-border basis. Companies may include accounts from different legal entities in their liquidity-management structures.  
  • Notional pooling is permitted on both a cross-border and domestic basis but used less than cash concentration as Swiss banking law does not permit credit and debit balances to be offset.  
  • Switzerland is a member of the European Free Trade Association (EFTA) and has established bilateral trade agreements with the European Union (EU).  
  • Switzerland is located in Europe with trading hours that overlap with Asia and North America.  

Bank Accounts 

  • Residents may hold foreign-exchange and domestic currency accounts, both domestically and overseas, whereby domestic currency accounts are freely convertible to foreign currency. 
  • Non-residents may hold foreign and domestic currency accounts, whereby domestic currency accounts may be held overseas and are freely convertible to foreign currency. 
  • Interest is available on current accounts. 

Legal and Regulatory 

  • SNB is the central bank and an autonomous institution, and FINMA oversees the banking sector. 
  • There are no foreign-exchange controls. 
  • A company is resident if it is registered or centrally managed in Switzerland. 
  • There is anti-money laundering and counterterrorism legislation in place, including regulations that follow EU directives. 
  • A financial intelligence unit has been set up, the Money Laundering Reporting Office – Switzerland (MROS), which is a member of the Egmont Group. 

Banks in Switzerland have been facing increasing pressure in the legal and regulatory arena to conform to the tightening of global financial regulations through directives from the following: Basel III, issued by the Basel Committee on Banking Supervision; the government’s own “too big to fail” (TBTF) regulations; and the United States Department of Justice (DOJ). The US DOJ has demanded that the Swiss banking sector tighten its tax regulations and impose significant fines for tax banking fraud.   


The Payment Services Directive (PSD2), law across all EU Member States, provides enhanced consumer security in the developing fintech environment i.e., for electronic payments such as mobile payments, credit transfers, online payments and direct debits.   

Measures include: 

  • Prohibition of surcharges on credit/debit card payments. 
  • Imposition of strict security requirements, including the protection of financial data. 
  • Increased competition between European payment service providers. 
  • Greater consumer rights, such as ‘no questions asked’ refunds on direct debits in euros.  

Payment Systems


(SIX Interbank Clearing) 

National Real-time Gross Settlement (RTGS) system 
  • Operated by Swiss Infrastructure and Exchange Interbank Clearing (SIX Interbank Clearing). 
  • SIC is made up of two subsystems: SIC for domestic currency (CHF) payments and euroSIC for EUR payments.  
  • 350 participants for CHF payments. 
  • Processes high value (no maximum value threshold) and urgent CHF-denominated electronic credit and debit transfers and paper-based payments, which are settled across participant banks' correspondent accounts held at the SNB.  
  • EUR payments are settled by the Swiss Euro Clearing Bank (SECB) in Frankfurt, which connects to the German component of TARGET2. It is also possible to settle through euroSIC.    
  • Payments use Society for Worldwide Interbank Financial Telecommunications (SWIFT) and SIC messaging.


(Euro Swiss Interbank Clearing) 

Switzerland’s EUR RTGS system  
  • Operated by SIX Interbank Clearing.  
  • Processes EUR-denominated transactions. 
  • Operates through the SECB, which connects to the German component of TARGET2 (see below). 
  • 190 participants for EUR payments from Switzerland and other European countries. 
  • euroSIC is part of the single multi-currency platform (multiSIC). 


(member of SIC) 

Bilateral clearing system 
  • Processes low-value retail credit and debit transfers. 
  • EUR-denominated cross-border payments are processed by euroSIC (linked to Germany's membership of TARGET2) through SIC's swisseuroGATE connection. Alternatively, EUR cross-border payments can be processed by euroSIC (through swisseuroGATE) and the Euro Banking Association's (EBA's) STEP1 and STEP2 as well as Germany's EMZ retail payment system. 
  • Bilateral relations have been set up with the Netherlands' payment system, Equens, to process cross-border SEPA credit transfers and SEPA direct debits between euroSIC and the Equens' Clearing and Settlement System. 
  • A cross-border SEPA direct debit processing service was introduced by the SIX Group with the SECB and Luxembourg's CETREL. 


Single Euro Payments Area 

Pan-European payment infrastructure 
  • Initiated by the European Payments Council (EPC). 
  • Operates a common set of payment instruments, infrastructures, procedures and standards for euro transactions within Europe.   
  • SEPA countries include 28 EU member states and European Free Trade Association member states, of which Switzerland is one. 
  • Electronic retail payments within SEPA are regarded as domestic payments. SEPA is not applicable to urgent, high-priority payments or cheques. 
  • PSD2, a Europe-wide legal framework for payments, is not applicable in Switzerland. 


(Trans-European Automated Real-time Gross Settlement Express Transfer system) 

RTGS for the eurozone 
  • Operated by Eurosystem. Second generation of TARGET. 
  • Processes EUR-denominated transactions which are settled with finality in real time. There are no value thresholds. 
  • Settles interbank and individual customer payments as well as other institutional payments and high-value net settlement systems. 
  • Operates SWIFT messaging. 
  • Swiss EUR transactions are settled through SECB, which connects to the German component of TARGET2. 


Payment Instruments   

Credit Transfers 

  • Credit transfers may be paper-based or automated, although the vast majority are automated. 
  • SIC clears and settles both CHF and EUR transactions within the same day if payments are received before 15.00. 
  • Low-value, non-urgent and bulk credit transfers are done through SIC for next-day settlement but may be submitted five days in advance using priority codes. 
  • Used for payroll, supplier and third-party transactions, as well as retail and commercial transactions. 
  • EUR domestic and cross-border transactions are settled through euroSIC or SECB in Frankfurt, which connects to the German component of TARGET2. 

Direct Debits  

  • Direct debits are known as Lastschriftverfahren (LSV+) and are used for low-value, regular payments such as utility bills. 
  • Direct debits are available in both CHF and EUR. CHF direct debits are processed through SIC, and EUR direct debits are processed through euroSIC. 
  • There is a right of refusal on standard direct debit agreements (LSV+), but it is not applicable to Business Direct Debit (BDD) agreements. 
  • Direct debits are initiated through SIX Paynet’s payCOMweb online application. SIC clears direct debits in both CHF and (via euroSIC) EUR through the LSV+ and BDD procedures. 
  • The SEPA Direct Debit (SDD) scheme clears EUR domestic and cross-border transactions through SECB in Frankfurt, which connects to the German component of TARGET2. It is also possible to clear bilaterally through euroSIC and the Dutch retail payment system operated by equensWorldline. 

Card Payments 

  • Payment cards, in particular debit cards, are the most widely used form of cashless payment by volume, with debit and credit card penetration being 1.24 and 0.71 per capita, respectively.  
  • The main debit card brands in use are Postfinance card and Maestro/EC card, and the main credit cards are Visa and MasterCard. American Express and Diners Club are also in use. All cards are SEPA- and Europay, MasterCard and Visa (EMV)-compliant and are processed through SIC, except American Express payments, which are processed through the International Card Association. 
  • Debit card transactions accounted for 28% of total payments in 2020.  
  • Automated Teller Machine (ATM) terminals are operated either by Swiss Post (Postomat) or the banks (Bancomat) or the national electronic funds transfer at point of sale (EFTPOS) network, all of which are EMV-compliant. 
  • Contactless card usage has shown strong growth in the last few years, with 80% of card transactions being contactless. 

Online Payments 

  • FINMA has initiated a series of schemes supporting the fintech sector, especially in light of the country’s fast-changing banking environment and the speed of global digitalisation. This culminated, for example, in the adoption of a regulatory sandbox and the launch of a new licensing category for fintech companies, providing a flexible backdrop from which companies can innovate.  
  • The Swiss e-commerce market is worth CHF10.9 billion, of which 27% is mobile commerce. 
  • High internet penetration has seen a correspondingly high use of online shopping using PayPal, credit cards and cash on delivery as the most popular forms of payment. 
  • MasterPass is operated by SIX Payment Services and MasterCard. This scheme enables online and mobile transactions for MasterCard, Visa and American Express card holders. 
  • SwissWallet, operated by Aduno Group, Netcetera and Swisscard, can be used in conjunction with MasterPass and enables online, mobile and contactless card payments. The domestic digital wallet, Twint, is another popular system, with global players Apple Pay, Samsung Pay and PayPal also having a strong presence. 

Digital Currencies 

  • Switzerland hosts a thriving cryptocurrency market, with some of the world’s largest initial coin offerings (ICOs) either planned or executed in the country. 
  • FINMA, SNB and the Swiss Bankers’ Association are keen to extend the country’s progressive approach by creating a welcoming cryptocurrency environment and developing regulations and rules for working within this fast-changing sector. 
  • FINMA has issued a set of ICO guidelines that focus on the following areas: function and transferability of tokens; adherence to the Anti-Money Laundering Act; and the application, where necessary, of securities regulations.  
  • Bitcoin and bitcoin exchanges are legal. 

Cash, Cheques and Other Payment Schemes 

  • A survey by the SNB showed that cash is the second most common form of payment, especially for low-value retail transactions, being used for 23% of the value of all purchases. 
  • Cheques are in use but are being rapidly overtaken by the use of electronic payments as a form of cashless payment. The main cheques in use are postal cheques. 
  • Cheques are truncated into electronic images and then processed through SIC the next day. 
  • Postal giros are used for retail payments. They are cleared through PostFinance and final settlement is done through SIC within the same day (if submitted by 13.00 CET). 

For more information, login to Treasury Prism for contextual insights on market regulations that are relevant to your cash management structure.

Sources (Intro & Corporate Treasury):  
IMF, The Federal Council of Switzerland, The Heritage Foundation, World Economic Forum, PwC, Bank for International Settlements, Trading Economies, CIA World Factbook, IMF, DBS, the Swiss Stock Exchange. 

Sources (Banking & Payments):  
Swiss Financial Market Supervisory Authority, Swiss National Bank, Association for Financial Professionals, CNBC, OECD, Swift, J.P. Morgan, Zurich University of Applied Sciences (ZHAW), Corporate Finance Institute, Swiss Payment Monitor, Crowdfund Insider. 

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