Wednesday, 10 February 2016
Last updated 8 hours ago
Sep 8 2008 | 3:10am ET
With its Byzantine tax structure and complicated federal bureaucracy, Switzerland has been unable to compete as a hedge fund center. But the long-time haven for the bank accounts of the rich and famous is aiming to change that.
Swiss banks and financial authorities are planning a raft of changes that will bring the tax burden on alternative investment firms down to the 15% to 20% they are used to in New York and London. Currently, the country is home to a dizzying array of tax levels due to widely varying local, state and federal tax rules.
The Swiss Federal Tax Administration will ask tax collectors to clarify problems linked to performance fees and carried interest, according to a statement from a joint committee of Swiss financial sector lobbies and the federal government. In addition, the Swiss Federal Banking Commission plans to do away with the “Swiss finish” regulations that it imposes on Swiss and foreign investment funds.
The hedge fund-friendly initiative is the work of the Swiss federal government and the likes of the Swiss Bankers Association, Swiss Insurance Association, Swiss Funds Association and the SIX Group. And their work is already paying off: soon-to-be-formerly-London-based hedge fund Krom River Partners is quitting the City for the Swiss town of Zug, about 15 miles south of Zurich.