Swiss wary as more foreign firms set up low-tax HQ

Switzerland could face political pressure from the United States and European Union if foreign companies continue taking advantage of the country's low tax rates by moving their corporate headquarters here, a Swiss official said Monday.

Large global companies that relocate just a handful of staff to Switzerland and then benefit from lower taxes on their international earnings could prompt the ire of Washington and Brussels, said a spokesman for the Swiss federal office for international financial matters.

“On the one hand we think it's a good thing when foreign companies come to Switzerland,” Mario Tuor told The Associated Press. But he added that “if a lot of companies move to Switzerland solely for tax reasons, then of course we become a bigger target.”

His comments, first made to Swiss weekly NZZ am Sonntag in an article published Sunday, come days after U.S. oil field services company Weatherford International Inc. listed on the Zurich stock exchange. Other companies that have set up international headquarters in Switzerland in recent years include engineering contractor Foster Wheeler, manufacturer Tyco International, and oil field services firms Nobel Corp. and Transocean Ltd.

Transocean, which owned the Deepwater Horizon rig that exploded in the Gulf of Mexico, was recently included in the SMI index of Switzerland's 20 biggest publicly listed companies. Weatherford could join that elite group in February, giving landlocked Switzerland's main stock market a heavy stake in the offshore drilling industry.

NZZ am Sonntag reported that Weatherford currently has only four of its 53,000 employees in Switzerland. The company didn't immediately respond to requests for comment Monday.

Tuor said the EU was already heavily critical of the fact that foreign holding companies enjoy lower tax rates in some Swiss cantons (states) than local firms. Brussels accuses Switzerland of indirectly subsidizing foreign companies and has demanded to hold talks with Bern on the issue.

“We are coming under pressure,” said Tuor. “Not just from the EU, but mainly from the EU.”

As far as the U.S. was concerned, “we have got some evidence that it's frowned upon,” he said.

The chairman of the U.S. Senate's Finance Committee, Max Baucus, said earlier this year he would investigate whether Transocean — which was once based in Delaware — was exploiting loopholes in U.S. tax law by moving its headquarters overseas.

Switzerland last year caved in to international pressure to grant foreign tax authorities greater access to information on individuals suspected of hiding money in Swiss bank accounts.

Bay Area NewsGovernment and politicsPoliticsState governments

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Harlan Kelly, head of the SFPUC and husband to City Administrator Naomi Kelly (right), faces federal charges for allegedly trading inside information on a city contract in return for a paid family vacation. (Courtesy photo)
Harlan Kelly, head of SFPUC, charged with fraud in widening Nuru scandal

Kelly accused of engaging in corrupt partnership with permit expediter

Jeff Tumlin, director of transportation for the San Francisco Municipal Transportation Agency, said the agency’s fiscal situation is “far worse” than the worse case scenarios projected back in April. (Kevin N. Hume/S.F. Examiner)
SFMTA prepares for massive potential layoffs as budget crisis continues to build

More than 1,200 full-time jobs on the line as agency struggles to close deficit

California Gov. Gavin Newsom is weighing further restrictions as COVID-19 cases rise. (Genaro Molina/Pool/Los Angeles Times/TNS)
Newsom considering new shelter-in-place order as COVID-19 cases rise

Gov. Gavin Newsom on Monday warned that he may need to reinstate… Continue reading

Nicole Canedo looks at her City-issued Medical Reimbursement Account page on her computer outside her Berkeley apartment on Tuesday, Nov. 24, 2020. Canedo has worked numerous retail jobs in The City and the MRA has helped her with health costs. (Kevin N. Hume/S.F. Examiner)
Millions left sitting in medical reimbursement accounts by city workers

Health officials looking at how to improve access, outreach as untapped funds reach $409M

Andrew Faulk wrote "My Epidemic." (Courtesy photo)
Doctor’s memoir a fitting remembrance for World AIDS Day

‘My Epidemic’ tells personal stories of men who died

Most Read