Swiss companies invest more in foreign subsidiaries
Published: Friday, Dec 13th 2024, 11:20
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In 2023, for the first time since 2018, companies based in Switzerland invested more funds in their foreign subsidiaries than they withdrew. In the years 2019 to 2022, companies domiciled in Switzerland withdrew net funds from abroad.
Companies based in Switzerland invested a total of CHF 49 billion in their subsidiaries abroad last year, as the Swiss National Bank (SNB) announced on Friday. By comparison, they had withdrawn CHF 71 billion in 2022 and as much as CHF 111 billion in 2021.
According to the SNB communiqué, investment activity was characterized by two contrasting developments. Companies from industry and the services sector - excluding foreign-controlled finance and holding companies - invested significantly more abroad than in the previous year, at 92 billion. In contrast, foreign-controlled finance and holding companies further reduced their direct investments abroad by 43 billion.
The regional focus of Swiss companies was on Europe, where they invested CHF 59 billion. Outside Europe, Swiss direct investment flowed mainly to the United States (CHF 15 billion) and Asia (CHF 7 billion). In Central and South America, on the other hand, companies based in Switzerland reduced their direct investments (by CHF 23 billion).
In total, direct investments abroad amounted to CHF 1,288 billion (2022: CHF 1,319 billion). At 37%, finance and holding companies had the largest capital stock abroad.
Funds withdrawn from Switzerland
Meanwhile, investors from abroad once again withdrew funds from Switzerland. However, at CHF 49 billion, the shortfall was slightly lower than in 2022, when it amounted to CHF 63 billion.
Finance and holding companies (-40 billion) saw the largest outflows. This trend has been observed since 2018, according to the press release. In total, they amounted to CHF 560 billion in the period from 2018 to 2023.
However, foreign investors also withdrew funds from Switzerland from trading and industrial companies in 2023. According to the SNB, inflows remained the exception. Both the insurance sector and transport and communications companies recorded these.
In total, foreign direct investment in Switzerland amounted to 930 billion last year. The lion's share of this, 96 percent, was equity capital. The remaining 4 percent was accounted for by intercompany loans.
Number of employees increases slightly
The Swiss companies surveyed by the SNB reported that they controlled around 21,200 subsidiaries abroad. They employed a good 2.5 million people in these, which is slightly more than the 2.3 million of the previous year. In turn, turnover fell to 869 billion Swiss francs from 902 billion the previous year.
The groups are also significant employers in Switzerland. The number of employees rose slightly to 556,000 in 2023.
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