Handbook for Investors. Business location in Switzerland.

9.5 Capital costs and interest.
Switzerland is one of the most economically and politically stable
countries in the world and is known as a safe haven. The country
is in a healthy financial situation. This applies to the finances of
the central state – at federal level – as well as the cantons and
municipalities. The budget deficit of 1 % of GDP is significantly
below the average of EU and OECD member countries. Total
public sector debt (federal, cantonal and municipal) amounts to
44 % of GDP.
By comparison with the OECD, from a government debt perspective
only, Switzerland’s debt ratio is in the middle range. Some
European countries and the US have higher ratios, while only
Norway, Luxembourg and Ireland have much lower levels. Consequently,
Switzerland remains one of the least indebted countries
in Europe.
Fig. 45: Credit rating: the ten safest countries
Rank Country Number of points
(maximum = 100)
1 Luxembourg 99.88
2 Norway 97.47
3 Switzerland 96.21
4 Denmark 93.39
5 Sweden 92.96
6 Ireland 92.36
7 Austria 92.25
8 Finland 91.95
9 Netherlands 91.95
10 US 91.27
Fig. 46: Capital costs, 2009
1 = hinders economic growth,
10 = promotes economic growth
1 Switzerland 6.69
2 Japan 6.30
3 Sweden 6.13
4 Malaysia 5.88
5 Hong Kong SAR 5.63
10 Belgium 5.29
11 Singapore 5.29
13 Ireland 5.15
14 Netherlands 5.12
17 Denmark 4.99
18 Luxembourg 4.98
20 Germany 4.88
21 USA 4.88
22 Italy 4.87
27 France 4.72
34 UK 4.15
38 India 3.93
43 People’s Republic of China 3.65
50 Russia 2.70
56 Brazil 1.85
Source: 2009 IMD World Competitiveness Yearbook
Source: Euromoney, www.euromoney.com, March 2008
High credit quality, together with the high savings rate and large
inflows of foreign money, lead to low interest rates, meaning that
financing conditions for business and investment are comparatively
favorable. In recent years, the average spread in the money
market and capital market interest rates in Swiss francs and euros
has ranged between 1.5 % and 2 %. Interest rates and terms may
vary widely depending on the creditworthiness of the client.
88 Handbook for Investors 2010