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Switzerland Plans EUR2bn Business Support Package

September 2011 - Tax & Private Client. Legal Developments by Hassans.

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Determined to mitigate the effects of the rapid rise of the Swiss franc, to support the Swiss economy and to strengthen Switzerland as an industrial centre, the Swiss Federal Council recently announced plans to swiftly introduce a CHF2bn (EUR1.8bn) package of measures targeting affected businesses.

Eager to prevent rising unemployment and to avoid an exodus of businesses abroad, the Swiss federal administration confirmed Federal Council plans to submit to parliament in the autumn a series of concrete measures designed to support companies affected by the strength of the franc, providing for a temporary reduction of costs, for a strengthening of innovation, and for improved economic framework conditions in Switzerland.

Measures to support export and tourism, as well as research and innovation and consumers and infrastructure are currently being examined and will rapidly be implemented, the administration revealed.

The proposals include plans to temporarily exempt or to reduce social security contributions for those companies most affected by the crisis, expected to reduce the burden on companies by around CHF1.3bn. According to the federal administration, the Federal Department of Finance has also been tasked with proposing a revision of the Confederation?s existing law on cartels.

Dwindling investor confidence in other currencies, prompted by concerns over the eurozone debt crisis and by signs of a slowdown in the US, has led to massive increases in the Swiss franc, a 'safe haven' currency, over the past few weeks. The appreciation in the franc has particularly affected the competitiveness of businesses in Switzerland, faced with lower margins, particularly businesses selling their products abroad.

According to the Swiss federal administration, the Federal Council aims to provide for the necessary resources to implement the measures within the framework of an ad hoc 2011 supplementary budget. Part of the funds will probably be deferred until next year, the administration pointed out.

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