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~ GJS Consulting ~

Have you ever considered expanding your online business to Switzerland? A country famous
for its watches, chocolate and cheeses. As an online retailer, it can be a much more interesting
cross-border target market than you might have ever thought. Th e country is one of the

savviest online markets and Swiss consumers love to buy cross-border on international online
shops. We talk to Gerrit Schroeder of GJS Consulting, who provides consulting advice and
operational support to foreign merchants handling the Swiss market in all matters of tax law.

he Swiss market A great example is the 1972 FTA between the EU and
Switzerland is an interesting e-commerce market, Switzerland. Schroeder continues: ‘Th is FTA created a
Tespecially for online merchants who are looking to free trade zone for industrial products and governs trade in
expand their business. It is one of the wealthiest countries in agricultural products. Th e importance of these FTAs can
the world. While it has been lacking a bit behind the large be seen quickly, as 71% of all Swiss imports come from the
European online markets, it is catching up quickly. As the EU. A big advantage is that, when you import products from
purchasing power of the Swiss inhabitant is very high, there elsewhere to Europe, you do not have to pay any additional
are a lot of chances for cross-border merchants, especially in customs when importing them to Switzerland.’
well-performing markets like fashion, food, electronics and
digital media. Th is off ers chances for cross-border traders. ‘Th e Swiss in
general are trustworthy folk, paying their bills. As Swiss
According to the Swiss E-commerce 2018 Report, online products tend to be a little expensive, online merchants
retail is in the midst of a strong growth period in Switzerland. from abroad can off er lower prices or gain higher margins,’
In 2017, online sales accounted for 9.6% (USD 7.59 billion) Schroeder explains.
of total retail in Switzerland. A third of this growth can be
accounted to foreign providers. Most of the Swiss industry Fiscal representation
leaders (90%) expect this development to continue to grow International trade might scare online retailers as it comes with
over the next fi ve years while total revenue is expect to grow to questions on taxes and customs. ‘In the Swiss market, to say
USD 10.88 billion by 2021. it right at the beginning, there is no tax on earnings for sales
generated in Switzerland,’ tells Schroeder. ‘Taxes on earnings
As the Swiss market is not too big, it can be expensive for you only have to pay where you are based. So, if you are for
domestic players only. Prices are in general higher than in other example German-based, you pay the profi t taxes in Germany.’
(European) markets. ‘Foreign merchants can often produce or
sell for a lower price. As end-consumers love to have diff erent As a cross-border seller you have to pay sales tax (VAT)
product choices, they are looking for cross-border alternatives,’ from the country you sell in. ‘For Switzerland, this means if
says Schroeder. you sell more than 100,000 Swiss francs in a year on small
consignments, you need to register your company for VAT
Another interesting fact about Switzerland is that it has purposes. Th at means you need to be fi scally represented
the highest part of non-Swiss people living in the country in Switzerland, for example by GJS Consulting as fi scal
compared to other European countries. Th ese “foreigners” are representation.’
well-educated and earn high wages which makes them very
powerful to buy products from abroad. Th ese products often Even if you are not “forced” to register for VAT purposes by
are cheaper and of equal quality. ‘As a European merchant, I Swiss law you might consider to register by choice as it is
would consider Switzerland one of the fi rst markets to expand far from customer friendly not to be registered,’ Schroeder
to,’ explains Schroeder. adds. Selling to Switzerland without being registered, the
consumer is importing the goods on its own, meaning he
Free Trade must pay customs and import tax when the product gets
Switzerland is a global nation when it comes to international delivered to his door. Registering your company allows you
trade. ‘It has one of the world’s most comprehensive networks to invoice VAT directly to the customer, which makes your
of free trade agreements (FTAs), including agreements with consumer think he is buying from a Swiss company. In fact,
the European Union and China,’ says Schroeder. ‘It also has this might even benefit you as Swiss people like to buy from
a simple and transparent statutory framework of conditions Swiss companies.
in place, as well as a modern customs procedure. Th is ensures
smooth and effi cient trade.’

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