Switzerland 2009 FPA-EAME Country Presentation Jonathan Lachowitz CFP(R)

Map of Switzerland

Key Statistics Founded in 1291 Known for political and economic stability Located in the heart of Europe Population 7.6 million - Ranked 95 th in the world 2008 GDP (At PPP) $310 Billion Ranked 39 th in the world 2008 GDP per Capita $41,000, Ranked 17 th in the world 4 National Languages: German (64%), French (20%), Italian (7%) And Romansch (1%) Other (8%) Religion: 80% Catholic or Protestant Life Expectancy at Birth 81 (78 men, 84 women) Fertility rate low 1.45 children/woman 21% of the country’s population are foreigners 26% of children under 6 don’t have Swiss nationality After Germany, the US and France are the biggest destinations for Swiss Living Abroad.

Key Economic Information Currency Swiss Franc Very low long term inflation rate <3% Unemployment ~3% Key Industries: Watches, Tourism, Banking and Insurance, Chemicals, Machinery Reserves of Foreign Currency and Gold $75 Billion

Geography 41,000 Square Kilometers (About 2x the size of New Jersey) Borders: Germany, France, Austria, Italy and Lichtenstein Mostly mountains with a central plateau and many large lakes; <10% arable land Excellent transportation infrastructure: Roads, Rail, Buses, Boats and Airports Rhone and Rhine rivers start in Switzerland

Political Structure Divided into Federal, Cantonal and Communal Governments 26 Cantons About 2900 Communes Very strong tradition of direct democracy and decentralized decision making Federal Council has 7 members; Each year a different member becomes president Legislative Branch divided into two Chambers: 1) National Council and 2) Council of Cantons

Taxes Income tax levied at Federal, Cantonal and Communal Level Federal top rate: 11.5% Cantonal and Communal can go up to 35% though varies greatly AVS (Social Security tax) 10.1% (half employee and half employer) Wealth tax – 0% to 1.5% per year, progressive Value Added Tax – 7.6% Capital Gains on Real Estate (average 18%, depends on holding period); no capital gains tax on financial gains. Stamp Taxes -.15 to.3% on financial transactions Corporate Taxes vary by Canton; at the Federal level, 8.5% Residents taxed on worldwide income Non residents taxed on income arising from permanent establishments and real estate in Switzerland Several Withholding taxes: 35% on interest and dividends

Stock Exchanges SMI – Swiss Market Index – Top 20 companies on Swiss Market 85% value Top 3 Companies Nestle, Novartis, Roche = about 60% of the SMI’s weight Exchange controlled by association of 55 banks 2 nd exchange in Switzerland in Bern; 50 Swiss SMEs including Swatch Group

Banking Industry –Over 400 Commercial Banks –Financial Sector 14% of GDP, 180,000 employees (5.6% of workforce), 110,000 work in banks –About 1/3 of global offshore (outside of country of origin) funds estimated to be in Switzerland –Swiss Bankers Association: –Swiss Financial Market Supervisory Authority (FINMA) –Central Bank - The Swiss National Bank –24 Cantonal Banks – Banking in Switzerland:

Financial Planning SFPO – Swiss Financial Planning Organization licenses CFP® marks in Switzerland – About 250 members, established in 1999 IFFP.CH – Institute for Financial Planning – commercially run education in financial planning IAF – Association for Continuing Education in the Financial Industry – about 30 corporate members Investment managers have to be a member of an SRO to control against money laundering