Switzerland

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Zürich has long-featured at the top of the list of cities offering the best quality of life in the world. Having finally visited for the first time last week, I can now see why.

Mind you, I wasn’t so enthused when I looked out the plane’s window as we came in to land. The pilot informed us (a little too cheerily, I thought) that it was -3°C, and the sky was an ominous grey.

Still, the city soon made up for it.

I had a few hours to kill before a business meeting, so I took the opportunity to amble around the Old Town, before finding my way through the winding streets to the Kunsthaus art museum.

The museum lacks the grandeur and wealth of treasures that the Louvre, National Gallery or the Prado can boast. But with a collection of works spanning six centuries – including some beautiful pieces by Canaletto, Monet and Van Gogh – it is well worth a trip.

And Zürich has a lot more to offer. The cafes, restaurants, shops, and its beautiful lake make Zürich an enviable place to live. Easy access to Switzerland’s world class ski resorts has a certain attraction too!

The Swiss advantage

And Switzerland’s appeal is not limited to its culture or sporting activities.

In its most recent annual survey, the World Economic Forum crowned Switzerland as the most competitive nation in the world for the second year running.

Switzerland was followed by Sweden, with Singapore third in the rankings. The United States slipped to fourth. The United Kingdom was 12th.

Running like clockwork

Such rankings were underscored on my way home.

The Swiss, of course, are famed for their timekeeping and efficiency. When the trains say they will arrive at a certain time they do, and to the second. They are smooth, clean and comfortable. Getting around Zürich is a cinch.

By contrast, getting back to my home in the UK was anything but smooth and comfortable. London’s Underground system was ground-breaking (literally) when it opened 150 years ago. Now though it is showing its age. There are constant repairs, and too many people jostling to get on.

The subsequent overland leg of my train journey was even worse. Broken signals, delays, overcrowded carriages. Suffice to say, it eventually took me twice as long to get from London’s City airport to home as it had taken me to fly from Switzerland to the UK.

Having lived abroad for many years, I know that nowhere is perfect.

Britain has its faults, for sure – the climate, the overstretched transport infrastructure, the lack of space, its cost of living. Yet coming back to live in the UK has helped me see it with new, more sympathetic eyes, better able to appreciate the wonderful things it does have to offer, and not just the bad bits.

Still, I can see why there is so much interest – especially among those well-paid financial types – in relocating to Switzerland.

Much of the reason may be to do with the favourable tax regimes they can expect to find in the country’s various cantons.

But I’m sure Switzerland’s long-trumpeted quality of life advantages must be as much of a draw.

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A new report published by the City of London Corporation[1] suggests the lack of tax predictability in the UK is now “out of control,” and is threatening the country’s position as a leading global financial centre.

The report polled members of the banking, insurance, asset management, hedge fund and private equity communities on six factors: predictability, overall tax burden, attitude of tax authorities, network of tax treaties, complexity and cost of compliance.

Every respondent gave the UK a poor rating on predictability. It is the area where the UK fared worst compared to other countries, but which the report says is the most important factor in judging competitiveness.

The authors said surprise changes such as the introduction of the bank payroll tax and bank levy, and the increase to 50% in the top rate of income tax were creating uncertainty and changing the financial services industry’s perception of the UK. In addition, the new rates and measures meant “the UK is now seen as a high tax jurisdiction not dissimilar to continental countries.”

However, despite fears that changes to the UK’s regime would lead to an exodus of financial institutions and people to more favourable tax jurisdictions, such as Switzerland, Singapore and Hong Kong, that has not materialised in practice, at least thus far. Instead, for the time being London remains a key financial hub, attracting international investment, as well as expatriate and domestic workers.

Holding on to its position in the world as an attractive place to live and do business is the UK’s challenge going forwards. Relying on its weather as a source of appeal certainly won’t do the job!


[1] Taxation of the Financial Services Sector in the UK: Predictability and Competitiveness, prepared by Charles River Associates for the City of London Corporation, October 2010, http://217.154.230.218/NR/rdonlyres/E3CEF4F7-479B-46B4-AB93-29DF5F673B53/0/TaxationofFinancialServices.pdf

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Alan Howard, founder of leading hedge fund Brevan Howard Asset Management, has joined the expat ranks.

Recent reports say Howard, who is swapping London for Geneva, is among a number of financial luminaries to have left the UK. And there are fears many more will follow, driven by concerns about rising tax rates, a less attractive business environment, and quality of life issues.

Certainly Geneva has its attractions. Low tax is an obvious one, especially for those wealthy City types. For example, alternative investment managers (i.e. those at hedge and private equity funds) can obtain a special tax status that enables them to discount chunks of their taxable income. Indeed, Switzerland as a whole offers many tax advantages.

Then there are the lifestyle benefits – the proximity of world-class ski resorts, sailing on the country’s many lakes, the beautiful scenery, its excellent environmental record, high quality health and education systems, etc, etc.

And that is backed up by Mercer’s 2010 Quality of Living survey, which put Geneva third in its global rankings, one place behind Zurich[1].

The flipside is that Geneva also ranks as one of the most expensive cities in the world, coming in fifth in Mercer’s recently released Cost of Living survey[2].

With a reported fortune of £875 million that won’t faze Alan Howard. Still, it might give the rest of us pause for thought.


[1] Mercer 2010 Quality of Living survey, 26 May 2010 http://www.mercer.com/qualityofliving

[2] Mercer Worldwide Cost of Living survey 2010 – City rankings, 29 June 2010, http://www.mercer.com/costoflivingpr#City_rankings

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As a freelance journalist and writer, one of the ways I earn a crust is to write reports and articles about the financial services industry. Which is why I found myself last month at a conference in Vienna, writing for a software company that provides technology to hedge funds, wealth managers and the like.

The attendees came from all over Europe and the Middle East. Some, like me, were from the UK. But most weren’t. There was a particularly big contingent from various parts of Scandinavia. There were also many from Switzerland, Germany and the Netherlands, as well as a few from further afield.

The conference was all about current trends in the investment management world, and how software can be used to tackle the industry’s challenges. In other words, highly technical subject matter that mixed complicated financial concepts with complicated technology solutions.

All the presentations were in English. Yet even as a native speaker I found some of the concepts hard to grasp. And here were many of the speakers, as well as much of the audience, dealing with the topics in their second, and sometimes third, language.

English Proficiency

As always, the Swedes, Danes and Dutch proved especially fluent. And do you know what? In all my travels I have never met one who wasn’t. That may be a generalisation, but not much of one.

A 2005 European Commission study supports my impressions [1]. It reported that the percentage of the adult population able to converse in English was 85% in Sweden, 83% in Denmark, 79% in the Netherlands, 66% in Luxembourg and over 50% in Finland, Slovenia, Austria, Belgium and Germany.

By contrast, the report found only 30% of UK respondents can participate in a conversation in a language other than their mother tongue.

Foreign language benefits

Of course, part of the reason for the UK’s relatively low level of multilingual capacity is that English has become the lingua franca in so many fields: business, IT, science, entertainment and politics, to name a few.

Nevertheless, for any expats moving to non-English speaking parts of the world it is crucial they learn the native tongue. Even if you intend to live in an expat enclave in France or Mexico or China, having a good grasp of the local language will make your life easier, and happier.

It will help you:

  • Manage day-to-day situations, such as buying quality food in local stores, dealing with utility companies and consulting with medical practitioners.
  • Integrate into the community and make friends.
  • Delve into the culture, history and social mores of the country, helping enrich your understanding and enjoyment of life there.

 

As a result, it will give you a sense of belonging, as well as one of achievement.

By contrast, a lack of local language skills leaves you isolated. And that can breed misunderstanding, resentment and fear.

Willingness to learn

Learning a foreign language can be a daunting prospect. But despite popular belief, it is never too late, as this article by Doug Bower argues[2].

Use it as an inspiration. Then take the time and make the effort to learn. It will be worth it.


[1] Europeans and languages, Eurobarometer 63.4, published September 2005, http://ec.europa.eu/public_opinion/archives/ebs/ebs_237.en.pdf

[2] Am I Too Old to Learn a Second Language?, by Doug Bower, http://www.expatfocus.com/am-i-too-old-to-learn-a-second-language

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