This is the third and last of three articles that together make up the English version of a feature published 2 April 2009 by Swiss news weekly L’Hebdo magazine on expatriates in the Lake Geneva region. GenevaLunch, a partner of l’Hebdo brings you the English version.

French version © 2009 l’Hebdo

English version © 2009 GenevaLunch (may not be reproduced in part or whole without written permission.)

PART ONE

PART TWO

[Part 3, continued] By Julie Zaugg and Mehdi Atmani

How did Switzerland become a nation of expats?

French-speaking Switzerland has an attractive infrastructure, with an international airport at the edge of Geneve, efficient public transport, good hospitals and top universities that are at the front lines of research and serve as conduits for interesting technology transfers,” says Blaise Matthey, director of the Fédération des entreprise romandes (French-speaking business federation).

Add to this attractive fiscal packages, even if the French-speaking cantons at the start of 2009 were no longer able to take advantage of the Bonny rule [GL ed. note: it allowed companies moving within Switzerland to benefit from tax breaks]. And finally, multinationals appreciate being able to easily find highly qualified and multilingual staff who are productive and not very tempted by strikes.

Despite these advantages the cantons spend varying amounts of money on wooing companies. Geneva rests on its laurels, say several observers, convinced that its reputation is enough to attract multinationals. Vaud, on the other hand, and peripheral cantons in the region, notably Neuchatel and Fribourg, have taken the bull by the horns. “These cantons have made a special effort in the area of fiscal appeal,” says Jacques Pasche. “They take it further – they’ve understood that they need to be pro-active.”

The figures speak volumes. Geneva has attrached 30 new foreign businesses in 2008, rather disappointing result given the city’s prestige. This compares to 33 for Vaud, 26 for Neuchatel and 29 for Valais. Beyond the rivalry is another problem: a lack of an intercantonal strategy. “There’s no vision of French-speaking Switzerland as a unified region,” laments Thierry Baglan, who covers France for DEWS (Western Switzerland economic development agency). For the multinationals you have to promote by industry sector, not by canton. You need to coordinate these efforts if you want to remain competitive compared to other countries.”

Eric Maire recalls that 10 years ago there were 20 to 25 economic development agencies fighting to win US companies, and today there are some 170. ” We’re competing with countries like France and Germany who are willing to subsidize companies that create jobs there,” he points out.

What does Switzerland get from this?

One in three jobs in Geneva rely on multinationals. The number of jobs has been growing there at a faster rate than anywhere else in the country: 180 percent since 1980, compared to 8 percent nationwide. International organizations and NGOs (non-governmental organizations) account for 12 percent of the jobs in Geneva. Overall, international Geneva “spends” CHF4 billion a year, nearly half of that in salaries. The economic fallout for the city from Procter & Gamble’s presence alone  comes to something like CHF500 million a year. Add to that the numerous subcontractors who work with multinationals as well as businesses that have been set up expressly to meet the needs of this population, for example the 40 relocation agencies that are active in Geneva.

Are the expats touched by the crisis?

The economic crisis is not sparing the multinationals in the Lake Geneva region. There have not been any large layoffs in Geneva or Vaud, but the number of individuals sent packing has been growing, although details and numbers are hard to come by. Caterpillar, however, announced a plan to restructure worldwide that involves 35,000 job cuts. Del West, which employs 85 people in Roche, Vaud, cut back 31 jobs. And expats working in the financial industry say they’ve heard about several layoffs.

As for hiring, there’s a freeze: “The number of requests granted for B permits for workers from outside the European Community has been cut in two since December, going from 100 to 50,” says Roger Piccand, head of the jobs section for canton Vaud. Cost-cutting measures are also taking less obvious forms. “Multinationals are sending their expats back home and bringing back the Swiss they’ve sent abroad,” says Olivia Guyot. “This lets them save money without cutting jobs.”

She points to 15 situations where Swiss workers were brought home. As for projects where companies planned to bring people into Switzerland, several of these have been put on hold or delayed. “Companies are waiting to see how things go,” says Thierry Baglan, looking at two projects that are on hold for now.

No UBS bank accounts Finally, the brouhaha surrounding bank secrecy in recent weeks and the dispute with the European Union over tax policies have not pleased several companies. Switzerland’s famous political and fiscal stability – and that’s not even taking into account tax advantages granted to European companies – are major advantages for the country. “The harm that’s been done to Switzerland’s reputation is considerable,” sighs Eric Maire. The problems between UBS and the United States have had an unexpected side effect. ‘It’s become impossible or American expats to open a UBS bank account,” says Sabine Baerlocher, who owns the company Active Relocation. “The bank is no longer willing to take this risk with the IRS (US tax authority).”

Ironically, Switzerland might also stand to benefit from the crisis. “Some companies are speeding up the process of settling in because it allows them to make economies of scale,” says Eric Maire. “A company with 60 sites in Europe, for example, has decided to move forward by six to nine months the centralization here of its information technology and human resources units.”

Japan Tobacco International, too, has announced that it’s creating 400 jobs at its new Sécheron site.

Ed. note: this brings to an end the l’Hebdo main article but GenevaLunch will also soon publish two related articles from this issue on housing and education for the expat population.

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