Anyway, it seems like a mystery to me why tech firms like Google set up shop in small expensive Zurich instead of say cheaper, bigger Barcelona or Vienna, for example. I'd love to know what the incentives are for them.
Also, in the good old times (= before the rise of right-wing populism and the referendum) Google could attract good people from all over Europe here because in terms of living standard and salary, it could be considered a step up from almost anywhere else in Europe.
Plus the central location and the infrastructure.
I think in the grand scheme of things, Zurich/Switzerland has a lot to offer. I've always felt that people who argue against Switzerland only on the basis of the high salaries and cost of living are a bit like people who argue against Apple on the basis of "speeds and feeds". There's a lot more to being business-friendly than being cheap.
But yeah, who knows, all this may change now, as indeed the report warns. Openness is a pretty big deal for a small, open economy like Switzerland.
______________
[1] EDIT: Just checked again, it was the Times Higher Education World University Ranking, as reported in the WSJ today. Direct link to table here: https://www.timeshighereducation.com/world-university-rankin...
[2] EDIT: Got curious from writing this and landed on their homepage. Their first sentence starts with: "Our lab in Zürich is perfectly placed for easy access to the Swiss Federal Institute of Technology Zürich (ETH)…" That kind of drives the point home, doesn't it? ;-) Source: https://www.disneyresearch.com/research-labs/disney-research...
They do amazing work, actually. Some seriously good CG researches in Zurich.
I wish m3 had caught on. Really liked it.
If you still would like to find Modula-3 related stuff, check http://apotheca.hpl.hp.com/ftp/pub/DEC/SRC/ .
> I think in the grand scheme of things, Zurich/Switzerland has a lot to offer.
Actually no and this is the problem. If you can either stand being an expat or manage to conform to a fairly inflexible Swiss life style then it has a lot to offer.
https://en.wikipedia.org/wiki/Urs_H%C3%B6lzle
ps: expats usually remain expats almost everywhere (as they tend to stick together), what's so inflexible about .ch in particular?
Well, I remember when arriving for work in Geneva a few years ago, a French colleague informed me (quite seriously :) that one can not urinate in the street. The American colleague mentioned "oh, and quiet hours after 10 pm". And you are not supposed to hunt the swans swimming in the lake. (& My youngish Swiss friends all complain about how "boring" it is.)
I think Switzerland is one of those love it or hate it things. I loved it.
never heard of such a law. If anything there's maybe one in certain cities. I know this is just an example, but I wonder why you'd bring this example up as an example about inflexibility?
> oh, and quiet hours after 10 pm
yep, that's fact.
> And you are not supposed to hunt the swans swimming in the lake.
Again, why would you bring that up as an example? I'm not sure whether you're joking or not.
I'm Swiss and indeed some things are quite different than in other countries, what you posted as an example I don't consider relevant at all.
What my non-swiss friends complain about, is usually how hard it is to get to know Swiss people well. Swiss take a long time to call someone a friend.
She was walking home one day and saw a couple watching television in the house wearing headphones, presumably so as not to disturb / annoy the neighbours!
It's more a case of treat others how you want to be treated - I hate being on the receiving end of neighbour noise so I take care not to be the cause of it myself.
The average base salary seems to be CHF 136,344 (USD 140,000) per year.
The interesting thing - from what I hear from people working at Google Zürich - is less than 10% of those working there are Swiss.
The location seems to be more about having a place to attract bright minds from Eastern Europe and even Israel that's still close enough so they can fly home easily for a weekend. So quota restrictions probably would really hurt here.
With respect to the office being located there in the first place, the story I heard was that it was basically a combination of Urs and ETH. The office was never intended to be huge, but it was successful in attracting candidates at a much higher rate than other European offices and thus quickly became the largest, making it the de-facto European engineering HQ. And yes this was very expensive for the company indeed, but luckily Google prints money so it wasn't a big issue. Other less fortunate companies would have had to impose hiring caps or quotas I think, to avoid Swiss salaries becoming dominant.
I don't think unlimited or limited EU immigration has made a huge difference. It's always been true that most employees in the Swiss office are not Swiss. When I joined Switzerland required visas for EU citizens as well, I had to prove I had a job and a degree to get in, and the Swiss office is full of Americans, Russians, etc. Local kantonal control is very strong in Switzerland and Kanton Zürich very much likes having a local employer with bottomless hiring needs and a bottomless bank to pay them with. I guess Google Zürich is closing in on employing 1% of the cities population, so they can usually get the visas they need.
Full disclosure: I'm certainly biased since I'm both Swiss and a recent graduate from EPFL.
But even if there were, it wouldn't matter to Google. There are no major network effects or cross-pollination with the ecosystem. Practically everyone who goes to work at that office is relocating from elsewhere. And if people leave, it's rarely to work at some other company in Zurich, but usually to move to another country.
I'm not saying that ETHZ and EPFL aren't great universities. I just don't see any reason to believe they are a major factor in this particular case, directly or indirectly.
(Just to give an idea of where my comments are coming from, I worked at Google Zurich for 4 years, and then another 4 doing a Zurich-based startup).
EPFL or ETH are definitely not something I'd consider as just "Swiss education system". These schools are what Stanford or Berkeley are in their region, and are highly international.
ETH Zürich is among the top ten computer science schools in the world, that's what.
Zürich was and is a glamorous place to live, au pair with New York, Tokyo or Milano, and after the "Brexit", Zürich is the new London now. Financial industry is withdrawing from the island and going home. Those things create incentives and an upward spiral for Zürich.
And also bear in mind that Confoederatio Helvetica has some of the lowest taxes in the world; it's every American republican's wet dream in terms of that.
I'm a Brit who lives in Zürich. I would not describe Zürich as being anywhere near as glamorous as New York nor as being the "new London". It's a lovely city to live in, but it's tiny - the entire population of Switzerland is smaller than the population of London and that reflects in the variety of things to do, things to see, services available and so on. My brother lives in London Zone 1 and I am often envious of the fantastic things that city has to offer.
The Brexit vote was three months ago. So far nothing has changed, and the financial industry is certainly not moving to Switzerland - which is also not in the EU! Moreover, the Swiss voted against freedom of movement as well in 2014 and the implementation deadline is in February. The Swiss Parliament are busy demonstrating exactly how compatible the EU and democracy are (not at all) by attempting to push through local hiring preference laws when the referendum, which is constitutionally binding, stated explicitly that it was a vote on imposing quotas. The SVP is not happy and a fight is looming. Quite possibly the Swiss will chicken out given how evenly divided society is on the topic of immigration, but if attitudes have hardened since 2014 or if the SVP is able to turn this into a fight on the topic of democracy itself, Switzerland may find itself on the same side as the UK very quickly indeed.
I don't actually want the Swiss to impose immigration quotas on people like me, that can only make life more complicated, but Swiss direct democracy is an admirable thing and I am 100% convinced it's a part of the reason Switzerland is so successful. Watching the EU systematically tell voters in the most successful European countries to bend the knee is not impressing me one bit.
Much.
The Brexit vote was three months ago. So far nothing has changed,
Except that the UK economy took a severe hit and the British Pound Sterling has been pounded into the ground - lowest that it has ever been in over 50 years. And that's been going on for exactly three months. I take it you don't shop on UK Amazon much?
Switzerland may find itself on the same side as the UK very quickly indeed.
One minor difference: Switzerland doesn't need or want the EU, but EU always wanted to have a grab at all the cash and Gold stored in Switzerland. Switzerland has been designed, implemented and tuned from the ground up to be a self-sufficient island, and it is this very idea that has made investors storm the Swiss national bank to dump their U.S. dollars and Euros and get the Swiss francs - stability and self-sufficiency, a safe haven. At the height of the USD / EUR dumping craze, the SNB was swimming in 480 billion CHF worth of surplus in foreign currency, until the Swiss national bank said stop, and lifted the currency peg:
(time point 13:08 in the video)
http://containersummit.io/events/sf-2015/videos/wolf-of-what...
My brother lives in London Zone 1 and I am often envious of the fantastic things that city has to offer.
Paul Graham summed it up pretty well in one of his essays:
Nerds don't care about glamour, so to them the appeal of New York is a mystery. People who like New York will pay a fortune for a small, dark, noisy apartment in order to live in a town where the cool people are really cool. A nerd looks at that deal and sees only: pay a fortune for a small, dark, noisy apartment.
http://paulgraham.com/siliconvalley.html
My mistake is that I should not have compared Zürich to those cities, because I've actually done a disservice to Zürich. It sounds like you really like London, and if you like it so much, perhaps you're in the wrong city, and going back home might be a worthwhile consideration, if you think London is so much better.
But back to Zürich: I'd like to know what Zürich doesn't have or offer?
but Swiss direct democracy is an admirable thing and I am 100% convinced it's a part of the reason Switzerland is so successful. Watching the EU systematically tell voters in the most successful European countries to bend the knee is not impressing me one bit.
Here, Sir, we are in agreement.
You're kidding right? Zurich is a glamorous village, it's the worst of both worlds. It's expensive and posh like a big city, but doesn't have the verity range or range of quality. Incidentally this is what PG has to say about Switzerland:
For example, many startups in America begin in places where it's not really legal to run a business. Hewlett-Packard, Apple, and Google were all run out of garages. Many more startups, including ours, were initially run out of apartments. If the laws against such things were actually enforced, most startups wouldn't happen.
That could be a problem in fussier countries. If Hewlett and Packard tried running an electronics company out of their garage in Switzerland, the old lady next door would report them to the municipal authorities.
But the worst problem in other countries is probably the effort required just to start a company. A friend of mine started a company in Germany in the early 90s, and was shocked to discover, among many other regulations, that you needed $20,000 in capital to incorporate. That's one reason I'm not typing this on an Apfel laptop.
I plain and simple disagree, and further, I think that is insane. I can't even begin to imagine what that statement could possibly be based on. For example, Pittsburgh, PA is a collection of villages, and there is just no way Zürich is anywhere close to that, in fact it's light years above and beyond. Compare New York and Zürich for instance: New York is an overcrowded, ugly, filthy dump of concrete and asphalt, and then compare Zürich, it's clean and green and elegant, and I can't think of anything it doesn't have. Have you actually lived in both?
That could be a problem in fussier countries. If Hewlett and Packard tried running an electronics company out of their garage in Switzerland, the old lady next door would report them to the municipal authorities.
That is just not true for Switzerland: you can run a single person company or even a GmbH out of your bedroom or garage and nobody will say a peep, especially not the municipality, whose tax commission will be more than happy that you started one, because you'll be paying them nominal tax no-matter-what. Have you actually tried it? Almost every village in Switzerland has more than one such company in a residential building.
I really don't know where you get the idea that the UK is somehow totally dependent on the EU in ways Switzerland isn't. Switzerland is far from an island. It has massive trade with both the EU and the rest of the world. That's why the Swiss Parliament is desperately trying to ignore the vote - they know Brussels will happily wreck the Swiss economy if it doesn't get its way, even if that also damages Germany (German devotion to the EU is perceived as bottomless in Brussels, it seems). Switzerland would absolutely suffer if its deals with the EU were terminated, and it's laughably far from self sufficient.
WRT what Zürich lacks, just compare the wealth of cultural events, museums and shows in London to what's available in Zürich! Don't get me wrong, for its size it does pretty well, and there are many other things London can't match (like the lake life) ... but you can't seriously claim a city more than 10x bigger provides literally nothing more.
Regarding your first question... Its not the same to work in the field and sell tomatoes to sell ponzi tiered insurances or do business holding the money of the biggest "rich families" from europe.
Have you seen where Google HQ is located in the US? Same story. And it's not about tax avoidance: California is not a low-tax state.
Most people don't see payroll taxes, only income taxes.
Having a large percentage of foreigners and English-speakers also contributes to that, as well as the clustering effect (IBM Research has a lab in Zurich since 1956).
The main difference is in healthcare, which in Switzerland is entirely private, post-payroll, and can easily amount to $500/month, whereas in France it's part public (payroll) part private. And the private part is usually paid on payroll too.
Health insurance is mandatory in Switzerland, so it really is not disposable income, even if you have provider choice.
You can reduce that if you opt for less choice (e.g. you can only use particular doctors) to around CHF 235/month.
And you're not taking in account the payroll taxes. France has a combined payroll taxes of almost 40%, while Switzerland is <15%.
So not only Swiss workers make more money, but they also cost less than French workers.
Source: OECD, http://taxfoundation.org/article/comparison-tax-burden-labor...
Maybe it's the city you live in. I'm in Munich and have TK, and about the only thing I've paid out of pocket for is 25 euro for some blood work, and of course some small fees for prescriptions such as antibiotics.
The reason is simple: tax-evation and the like, Swiss is well known for it around Europe. That it hasn't been dealt with is not strange since we live in the age of hidden plutocracy (trading outposts and the like exist in many countries for the rich to circumvent the law - this should put Brexit in a new light for some).
Things are slowly changing for the better as people start to realise what is the real problem within society (or rather outside society), but seing as what happened to the "Panama" leak where the concentraded information wasn't released and basically ICIJ sat on it for a year or so (the initial estimates during that time dwindles from over $62T to less than $30T, the official cause was accounting for the same money several times).
Source? Switzerland is famous for its private banking sector and it used to be easy to hide assets for individuals (with FACTA and tax data sharing, I don't think it's as popular now, or at least the minimum amount required is way higher since banks don't want the risk). Unlike Ireland, I'm not aware of Switzerland being commonly used to reduce corporate tax (at least in IT).
To be clear, 'tax evasion' is illegal.
Most companies do what they can to avoid paying taxes, which is rational in some ways, but they usually don't do anything illegal.
It's important that we don't mix the two :)
Where it gets prickly is when companies game the system and find ways to reduce tax that the sovereign clearly would outlaw, but cannot for structural or political reasons. Still not illegal, but not exactly awesome either.
If you have $1M in a Swiss bank account earning capital gains, and don't declare it to the IRS - that's 'tax evasion'.
If you have a company in Switzerland generating revenue, and decide not to bring back your profits to America to get hit with another tax, and just let it sit in Switzlerland - that's a 'tax avoidance' strategy.
'Tax evasion' = illegal.
'Tax avoidance' = doing everything you can within the boundaries of the law to not pay taxes. There are some wierd loopholes due to the way taxation works across borders.
Tax avoidance does not. It involves complete honesty with the tax authorities, who then charge you less tax, as the rules state they should. The definition of "avoidance" is therefore intensely political - avoidance tends to be defined as lawful behaviour by other people the speaker would prefer paying for government instead of them!
The distinction matters to: decision-makers at the firm in question, shareholders of the firm in question, the sovereign collecting the taxes[1]. And given the the dispute resolution with large corps' tax issues rarely involves people going to jail or even admissions of fault, I'm not sure why anyone outside of that group should care about the (extremely blurry) legality boundaries.
Bottom line: most of the rest of us have no obligation to care about their word-choice sensitivities and are free to use language for our own ends.
[1] Possibly noninclusive list.
This is a continuum that stretches from clearly illegal schemes through hazy waters, into calm water like deducting salaries and cost of goods sold from revenue and paying tax on the balance. For individuals "tax avoidance" includes deducting charity contributions and taking advantage of things like deductions for dependents. If that is not "unethical" to you then you need to make a distinction between tax avoidance and tax evasion.
Many people believe "is it legal" is a good line to use. You may differ on that, but you can't escape the dichotomy.
Important to lawful civilizations.
If you think that there should be better regulations around setting transfer pricing, then vote for it.
Unless companies are breaking the law, then there is a very profound 'distinction'.
Some tax issues are easily resolved, or at least, easily improved. 'Transfer pricing' is not one of them. It's very thorny.
I for one think that Apple's argument of 'the innovation and design is done in California - not Ireland' - is pretty reasonable.
Im fact - the US government should be reaping most of the tax dollars that Apple generates, not Ireland.
That said - if they have operations in Ireland they should be paying taxes there.
I think that a company should pay it's 'primary corporate tax' in the place where it is incorporated and has it's major operations.
And then ancilliary countries like Ireland can tax them at a corporate rate, but discounted for what they payed in America. Ireland's biggest tax receipts from Apple should come from VAT - which is the fairest tax of them all, because it's applied to each iPhone sale in Ireland, not France or wherever.
Currently - it's upside down: if a Canadian company has a subsidiary in France, they pay their corp tax rate in France for sales there - and then only a 4% remittance fee to Canada. To me that's backwards.
The American system is the worst: American companies pay full tax overseas - and then full tax back in America. Plus American corporate taxes are high.
You seem to have misread. I was arguing about word choice about tax policy, not tax policy. I choose to recognize a range of behavior as "evasion". That's what we're talking about. None of your post is relevant to what I wrote.
So - it's not up to you to decide what is 'tax evasion'.
You can commandeer the term if you want, but you'd have to be very clear that you are doing that.
Some names you might recognize:
* Niklaus Wirth (Pascal, Modula-II, Oberon etc.; retired professor at ETHZ)
* Jurg Gutknecht (Oberon; EHTZ)
* Erich Gamma (one of the "Gang of Four" behind the Design Patterns book; co-wrote JUnit; studied at University of Zurich)
* Urs Hölzle (Google SVP of Technical Infrastructure at Google; studied at ETHZ)
A lot of people can also be traced back to Wirth. E.g. Andreas Gal that did his thesis on trace trees for JIT compilation is German, and did his thesis at UC Irvine, but his advisor was professor Michael Franz who did his thesis on runtime code generation before Java was released under Niklaus Wirth.
Martin Odersky, the creator of Scala and javac, was born in Germany but received his PhD in Zurich, at EHTZ, under Wirth's supervision[1]. Odersky is now a professor in Lausanne at EPFL [2].
[1] https://en.wikipedia.org/wiki/Martin_Odersky
[2] https://people.epfl.ch/martin.odersky/bio?lang=en&cvlang=en
In terms of companies, here's a few of the best known I'm aware of:
An old infamous one:
* https://en.wikipedia.org/wiki/Crypto_AG
And a couple of major international ones:
* Logitech (founded in Apples, Vaud)
* STMicroelectronics (headquartered in Geneva; though it was a merger of a French and an Italian company)
And a new but still quite well known security hardware one:
* Silent Circle (security hardened smartphones)
But as other have pointed out, in software/hardware Switzerland is doing best in R&D, not least because of the high salaries, and a lot of CS grads will also end up going into jobs in companies that are not necessarily hardware/software companies but that need a lot of CS talent (e.g. banks, high tech manufacturing).
Also Switzerland strengths, like Germany, is not rooted by the big companies. The small to medium sized companies are the backbone of the success. And naturally those are not as known as an Apple or Samsung.