Corporate departures test Zurich’s appeal to businesses

Vontobel and Cembra are leaving the city of Zurich, while Zimmer Biomet and Burckhardt Compression are cutting jobs in the region. The developments have raised questions about Zurich’s appeal to businesses, SRF reports.

SRF business editor Charlotte Jacquemart says the cases have different causes, although some factors behind the job cuts and relocations overlap. With such announcements coming in quick succession, she says, it is worth asking whether they point to a trend. Companies disclose only part of their reasons publicly, making that difficult to assess.

Costs and access influence relocation decisions

Factors include administrative hurdles, the availability and cost of office space, wages, access to qualified staff and transport links, including public transport. Corporate profit taxes are also important, although companies rarely discuss tax considerations publicly. Taxes are seldom the sole reason for a move, Jacquemart says; several factors usually combine.

Tax rates vary considerably by municipality. In Baar, in the canton of Zug, where Vontobel is moving and Zimmer Biomet has had its European headquarters since 2020, the profit tax is about 12%. It is 19.5% in the city of Zurich and about 15% in Baden, in the canton of Aargau, where Cembra is moving. Relocation can save companies tens of millions of francs, and other costs, such as rent and infrastructure, may also be lower.

Zurich faces the risk of more companies leaving

Zurich should take the departures seriously, Jacquemart says. The city loses tax revenue while its infrastructure costs remain high. A further concern is that other firms may consider relocating if large companies move their headquarters to cantons around Zurich.

Although profit taxes in the canton of Zurich are high by Swiss standards, Jacquemart says taxes alone rarely prompt a move. Traffic problems, high rents, limited space and a lack of affordable housing for employees are also important. Cities cannot address these issues quickly, she says.

There may also be advantages to easing pressure on crowded urban centres by spreading companies across the regions around Zurich. Some employees could then live closer to work and commute less.