A fine romance – Switzerland’s relationship with the European Union

We take pride in partnering with China Business Law Journal to regularly provide indepth insights into those features of the Swiss legal and tax system that make Switzerland a prime location for foreign direct investment in Europe. In our first contribution we feature the legal framework that provides the Swiss export industry with non-discriminatory access to the markets of the European Union.

Swiss/EU trade

Let us share a rather sad experience we had earlier this year at the 2012 Global Outbound Investment Summit in Beijing. After we had presented to the Chinese audience why Switzerland is a prosperous island in Europe’s stormy sea of sovereign debt, and why this should make it a preferred location for Chinese direct investment in Europe, a representative from an EU member nation took the floor and expressed the view that Swiss exports risk being discriminated against in the EU, as Switzerland is not an EU member state. Although such fears are ill-founded, we learned that they have made some Chinese entrepreneurs reluctant to evaluate Switzerland as their European test market or direct investment location. Therefore, it is time to set matters straight.

Switzerland is indeed not an EU member state, but this does not adversely affect trade between Switzerland and the EU. The Swiss/EU trade relationship resembles a marriage without sex – sharing board (markets), but not bed (sovereignty). How come?

Felix Egli is a senior partner and Wu Fan is a counsel at the Swiss law firm VISCHER in Zurich