Think of Switzerland and you might think of fine cheese luxury chocolate and think of now snowcapped mountains.
But you may also think of money.
Switzerland has 1billionaire for every 880,000 people making it the third most dense billionaire population in the world
Only Luxembourg and Hong Kong have a higher proportion of individuals with a net worth of at least 10 figures
Swiss residents are also among the richest in the world with a mean net worth of almost$700,000 ahead of the US and Hong Kong which makes the country stand out on several key wealth metrics
If you look at the income distribution it has remained relatively stable over many decades now it is much less unequal than many other countries
The average person has it quite good here, but I mean that doesn’t mean theyn’t poor either, and then the superrich of course, and I mean that difference is of course huge
So what makes Switzerland such an attractive place for the uber-wealthy and what does that extreme wealth mean for the rest of Swiss society?
Why Switzerland has so many Billionaires?
As of 2022, Switzerland was home to an estimated 110 billionaires with a combined wealth of $338 billion that’s well above other Super Rich hotspots like Saudi Arabia Singapore, and the United Arab Emirates.
Among some of the country’s wealthiest residents are channel co-owner Gerard Wertheimer, the heirs of Ikea creator Ingvar Kamprad, and the founders of homegrown healthcare giant Roche.
Switzerland is considered one of the most politically stable countries with a strong reputation for political neutrality.
It means wealthy individuals can trust that their assets will be safe from any sudden leadership and policy changes.
The country also benefits from an attractive tax system with low rates for both corporations and individuals which has a competitive advantage versus other locations.
The tax aspect is one part of the equation of rich individuals in the form of income that very rich individuals tend to have is not labor income most of their income tends to be capital income or capital gains on the companies they hold and there is no capital gains tax on financial assets for here Switzerland which of course is attractive for these kinds of rich individuals.
This means the Swiss aren’t getting taxed on the profit they make when selling an asset that increased in value and while there is no capital gains tax Switzerland is one of the few European countries with a wealth tax but it is set at a relatively low level of 0.1% to 1.1% of an individual’s net wealth that tax is levied by individual cantons or regions of which Switzerland has twenty-six.
Finance chief for the Canton of Grisons
Martin Buhler, Finance chief for the Canton of Grisons, told CNBC International that this system helps boost competitiveness.
The cantons are responsible for everything that’s not or delegated to the Confederation or delegated to the municipalities we are able to shape our financial policy independently but we have some laws Confederation wide where we have to be in line with.
Switzerland – Destination for Globalized Urban Centres
Switzerland has very globalized urban centers like Zurich, Basel, Geneva, and Grisons is a very big on-surface canton but in the periphery, it’s more rural means we need other goodies to find the people to attract people to live.
The way Switzerland does it, it has, for example by the wealth tax Switzerland has this competition between the cantons on one hand but we also are all interested that this is not an exaggeration.
Switzerland also benefits from a strong Swiss Frank which lowers the cost of foreign goods and services while raising the price of Swiss exports.
The country’s currency has steadily strengthened over recent decades reaching parity with the Euro meanwhile it has held steady against a strong dollar.
You don’t have to be afraid of a major depreciation of the currency here which is kind of related also of course to the political stability of the strong legal and institutional setting year.
Switzerland – A Leading Business Destination
The country is also considered a leading business destination with world-class Financial Services Pharmaceuticals and chemical sectors
It is also home to major business institutions such as the World Economic Forum which famously gathers Global industry leaders for its annual event in Davos.
Switzerland’s banking sector developed a reputation over the 20th century as a place of privacy and anonymity making it a particularly attractive location for wealthy individuals to store their cash and potentially avoid taxes that system came under scrutiny following the global financial crisis and the failure of several major Swiss banks forcing the industry to clean up its act and require greater transparency from clients but still, it has retained its status as a hub for wealth management.
Historically that has been part of what uh you know the Swiss banks have been doing essentially helping rich individuals evade their taxes in other countries moved away from that business model and try to keep moving away from it because you know the international uh regulations have become stricter.
The shift comes as governments face increasing pressure to reign in the so-called billionaire class as many continue to struggle with the cost of living crisis.
Oxfam Report
A 2024 Oxfam report found that the combined fortunes of the world’s five richest men have more than doubled to 869 billion since 2020 while 5 billion people have been made poorer so.
What does Switzerland’s ultra-rich population mean for the rest of the country and social cohesion overall?
To focus only on rich people would not fit anymore so we have to rethink we have to get an attractive part for young people for I say low qualified Personnel it’s not that easy anymore to say we can focus on this and the rest is okay.
It’s a problem that there are so big differences but people living in Switzerland are lucky.
It’s definitely true that Switzerland does have a bigger gap between you know richer ones and middle-class people not but like the less wealthy ones you could say.
Despite the extremes, however, Switzerland continues to rank highly on liveability and social harmony indices that are seen as being down to the country’s social policies and labor laws which ensure decent living standards for the less well-off too.
So, you see that the workings of the labor market the education system that makes sure that even people further down the distribution actually make good incomes has worked for a long time well
If you think about the system in which there is a social structure so that people who don’t earn that much can still live quite well that is probably a key element to the society.
Source: CNBC International
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