Swiss stocks

Business and Politics

Prosperity in the midst of the Alps. The Gross Domestic Product amounted to approximately 762 billion USD in the year 2020. However, Switzerland has only 8.5 million inhabitants from 26 different cantons.

Switzerland has a considerable economic power. The economy in Switzerland is heavily focused on health and finance. In these sectors, the largest and most well-known companies from Switzerland are predominantly operating, such as for example, Roche or the UBS.

In many parts of the world, Switzerland is known for its low taxes, which is why some wealthy public figures have relocated their residences to Switzerland.

The special tax issue for German shareholders

Double taxation. Switzerland is a country known for its very free market and low taxes. In Switzerland, the average tax rate for corporations is only 14% (Germany: 30%). This is because capital gains are tax-free in Switzerland. However, dividends must be taxed.

For German investors, there is a 35% tax, of which 15% can be credited towards German capital gains tax. This results in a high and unpleasant double taxation. However, through a Tax Voucher obtained from one's broker (partially at a cost), the tax can be easily reclaimed.

Nestlé Bhaltis, where shareholders receive a certain number of Nestlé shares in addition to the cash dividend. These Bhaltis must be treated as taxable income. When calculating the Fair Value, we also include stock dividends. Lindt Chocolate suitcase worth 200 CHF, which shareholders receive once a year.

The largest companies

Here, the value stocks dominate. The world's largest food manufacturer Nestlé , the pharmaceutical and diagnostics company Roche and the pharmaceutical company Novartis are known among shareholders. The three companies are among the top 10 largest companies in Europe and are all based in Switzerland. They are global leaders and produce sought-after products in the consumer and health sectors.

But the financial industry also has a significant impact on the Swiss economy. Zurich is a financial center in Europe and a popular location for banks. Well-known financial companies from Switzerland are UBS (bank & asset manager), Julius Bär (bank) and Partners Group (private equity).

Headquarters of the largest companies

The well-known companies Novartis and Roche have their headquarters in Basel. Nestlé Rue de l'Industrie Lindt & Sprüngli in Kilchberg.

The largest and most important trading venues

Access is not easy for foreign investors. Swiss stocks can no longer be traded on European stock exchanges. Therefore, one must take the detour via a foreign order to add Swiss company stocks to their portfolio.

The main trading venues in Switzerland are SIX Swiss Exchange, which was created in 1995 through the merger of the three stock exchanges in Geneva, Basel, and Zurich, as well as BX Swiss in Bern. The first stock exchange in Switzerland was the one founded in Geneva in 1850.

The Swiss Market Index (SMI) had a trading volume of 1.2 trillion CHF. Five companies completed a successful IPO in 2021.

Performance of the indices

The leading index of Switzerland is the Swiss Market Index 20 (SMI 20), which summarizes the performance of the 20 largest Swiss companies. The maximum weighting of individual companies in the index is limited to 18% due to significant differences in market capitalization among the SMI companies.

The SMI was introduced on June 30, 1988. Its base value was set at 1,500 points at that time. Currently, the index is above 10,800 points. (As of September 11, 2022)

Opening hours in Switzerland

A trading day on the Swiss Exchange lasts from 06:00 AM to 10:00 PM (CET).

However, it is currently quite complicated for EU citizens, as stated above, to buy Swiss stocks.