Switzerland has a customs union with Liechtenstein in 1924. Switzerland is a member of European Free Trade Association (EFTA). Other members are Liechtenstein, Iceland, and Norway. Switzerland has signed bilateral agreements with the EU that guarantee many of the same economic advantages and lowered barriers to trade that EU members enjoy. The USA and Switzerland have formed a “Trade and Investment Cooperation Forum” to promote mutual trade. Switzerland also signed last February, 2009 a Free-Trade Agreement with Japan allowing the exemption of customs duties for 99 % of trade transactions between these two countries, within 10 years. Finally, Switzerland has signed free trade agreements with the States of the Gulf Cooperation Council (GCC) and Albania.
Non Tariff Barriers
Switzerland has a strict policy for import of agricultural biotechnology products. It involves a lengthy approval process. Quotas exist for import of certain products (mainly food items) which vary from year to year vary from year to year depending upon the size of harvests, volume of stocks and market requirements. These quotas are granted only to importers based in Switzerland and they need an import license. Import licenses are also required for certain products not subject to quotas, but which are covered by special regulations concerned with public health, plant health, quarantine (plants), veterinary regulations; regulations concerning the protection of endangered species, safety measures, price control (for certain textile products).
Customs Duties and Taxes on Imports
5.5%. Swiss duties are generally "specific" rather than "ad valorem". Duty varies according to the item imported. For details, visit: Swiss Customs Office
Harmonized System (HS) is used.
The goods to be imported into the country need to be presented to the appropriate Customs office and declared for customs clearance. The following time limits are followed for declaration of imported goods from arrival into the country by various means of transportation: road, 24 hours; river, 48 hours; rail, 7 days; and air, 7 days. The importer may examine goods before submitting them for clearance. However in reality, almost all commercial shipments are handled by forwarding companies, which, in most cases, also are legally empowered to act as Customs agents. For more details, visit: Swiss Customs Office.
Goods that are used as and which qualify as samples are eligible for duty-free entry. In order to qualify, words "sample, not for resale" should be written on the commercial invoice.
The goods for display at public exhibitions are also eligible for free passage (Freipass) through Swiss customs. Certification from the trade fair authorities that the goods are entering Switzerland for the exhibition is usually required. Exhibition goods must be re-exported within a month of the end of the exhibition. If the goods are sold to a Swiss resident off the exhibition floor, the buyer incurs a liability for the customs charges. Almost all fairgrounds have a Customs office on site.
Swiss consumers appreciate product quality and are ready to pay extra price for it, if convinced. However after-sales support is absolutely crucial in Switzerland. Swiss consumers like new & innovative products, but they stay loyal to the brand names that they know.
Consumer Profile and Purchasing Power
Traditionally, Swiss appreciate quality and brand-value and are ready to pay a premium for it. However with economic conditions becoming harder, the price is becoming an important factor while selecting goods. Both pre-sales and after-sales services are very important in this market. Selection of goods by Swiss consumers largely depends on how good the company is in providing such services.
FCAB, Federal Consumer Affairs Bureau FRC, Fédération romande des consommateurs
The distribution market in Switzerland is dominated by vertically integrated retailers. This allows them to have a centralized buying system in order to remain competitive when compared to independent retailers.
The number of independent retailers is thus decreasing, giving way to a growing number of discount stores and supermarkets. Most of the leading retailers are legally structured as cooperatives.
Department stores, chain stores, consumer cooperatives, discount stores and supermarkets comprise the majority of such retailers that deal in a wide range of products and services ranging from textiles, leather goods, sports articles, pharmaceuticals, toys, to hardware.
There are approximately 76,000 companies with around one million employees operating in the Swiss manufacturing sector. The sector contributes 42 % to the country’s total exports in terms of volume. Three industries namely mechanical, electrical and metal known in German by the abbreviation MEM play a central role in the Swiss economy.
The MEM industries, together with related fields such as information and communication technologies also develop high performing production facilities for numerous other industrial sectors, such as the agricultural, automobile, chemical-pharmaceutical, electronic, food and textile industries.