Using an Agent or Distributor

Under Swiss law, agents are independent, can work for several firms, and are compensated by commission. A 1949 federal law on agency contracts governs their activities. Swiss law does not permit a principal to inspect the books of his/her Swiss agent. The law defines traveling salespeople (Handelsreisende) as employees of the company they represent. Under a 1941 federal law, they are entitled to a fixed salary, with or without commission, and reimbursement of travel and entertainment expenses.

For U.S. exporters interested in entering the Swiss market, finding and selecting the right person or firm for representation is important and sometimes difficult. Offering of favorable terms may be required to obtain good representation for a new product or an unknown firm.

Viable Swiss firms are listed in the trade registry. Once a potential partner has been identified, it is advisable to request a financial profile of the company. This can be obtained at a relatively low cost from Dun & Bradstreet in the United States. The U.S. Commercial Service in Switzerland can generate a background check based on cantonal financial records. For more information, please contact Dun&Bradstreet Switzerland directly or the U.S. Commercial Service Switzerland

Detailed information on working with Swiss Distributors is available through the Swiss AmCham Website: Swiss-American Chamber of Commerce

Establishing an Office

The actual mechanics of forming and registering an office in Switzerland can be accomplished in two to three weeks, but the planning process can be more time-consuming and involves many factors. Probably the most important factor to consider for establishing an office in Switzerland is its location. Tax laws, availability of work permits, availability of labor force, and availability and cost of business facilities vary widely among cantons. Some cantons may offer special incentives for foreign investors.

Once a location is selected, the company must be registered in the Commercial Register, provided annual turnover amounts to at least SF 100,000 (USD 1 = 1.20 Swiss francs). If annual turnover is under that amount, the company is not required to register. Registration documents contain the company name, amount of share capital, business purpose, names of directors and managers, and names of those who have signatory powers. Documents must be notarized and legalized by an "apostille" (legalization of the notary's signature) and, if required by the particular canton, translated by a recognized translator into German, French or Italian.

The company's board of directors must consist of a majority of Swiss citizens, residing in Switzerland. However, with the exception of ownership interests in banks and real estate firms, foreigners may hold majority shares. Foreign-controlled companies usually meet this requirement by nominating Swiss directors who hold shares and perform functions on a fiduciary basis. The manager need not be a Swiss citizen, but at least one person authorized to sign with a sole signature or two persons authorized to sign by joint signature must be Swiss residents.

Registration also includes special wording that the company, if a branch of a foreign corporation, is relatively independent from the corporation's head office from an economic and non-economic point of view. This basically enables the branch to exist as if it were a separate legal entity in Switzerland. The branch must have its own books of account, although such books may be kept by the company headquarters or by a third party. A branch does not enjoy limited liability. For that reason, American companies should normally set up a subsidiary.

Employment regulations and restrictions are often a concern to businesses once they have registered. Foreign employees must have work permits that are granted at the cantonal level (quotas apply) and approved at the federal level. Hiring Swiss residents is more straightforward. There is no minimum wage, but the company is liable for a host of benefits and compensations, ranging from pension plan contributions to health and accident insurance.

A final factor that needs to be taken into consideration when setting up a business is tax liability. As a rule, foreign companies have a tax liability on income attributable to a Swiss permanent establishment or income from immovable property located in Switzerland, including gains on the sale of such property. Withholding tax is levied on dividends and certain kinds of interest.

Under the U.S.-Switzerland treaty on double taxation, income from industrial and commercial activities is not taxed in either country unless derived from a permanent establishment in the taxing country. Switzerland taxes only those industrial and commercial profits of a U.S. permanent establishment in Switzerland attributable to in-country activities. The same deductions are allowed in determining taxable income as for a Swiss corporation. Detailed information on investment in Switzerland is included in the Investment Climate Statement, Chapter 6.

Detailed information regarding setting up and staffing a business enterprise in Switzerland is available from the Swiss-American Chamber of Commerce and from "Doing Business Guides" published by such organizations as Ernst & Young and PricewaterhouseCoopers.

LocationSwitzerland
Swiss-American Chamber of Commerce

Bonded Warehouses

Custom bonded warehouses and duty free areas are available in and around all major Swiss cities. Consequently, goods entering Switzerland on a temporary basis may be put into a bonded warehouse without being subject to Customs clearance or the payment of an import duty or VAT. The goods are still considered in transit from the border to the bonded warehouse. Subsequent exports will be subject to Customs duty rates of the country of destination. Goods stored may not be processed without special authorization. Bonded warehouses, which are authorized by public authorities, are operated by private warehousing companies and are available to any interested party without restriction.

Open bonded warehouses, referred to by the Swiss as “Offenes Zolllager” or (OZL), are located directly on a company’s premises and are used for storing goods that have not been cleared through Customs. Goods in these facilities must be kept separate from goods earmarked for the domestic market. Freight forwarders usually operate these warehouses. At present there are more than 150 such facilities in Switzerland. The main difference between the two types of facilities is that open bonded warehouses must keep an inventory of stored goods readily accessible to Customs.

In bonded and open warehouses, most value added work, such as sorting and assembling work, is permitted. However, Customs authorities must first authorize such activity. It is also permissible to utilize these facilities for such activates as repair, assemble or refining the products that are in bonded storage.

U.S. exporters considering the establishment of a bonded warehouse in order to cover both the Swiss market and other European markets should carefully evaluate the financial feasibility and transportation implications of such a strategy in advance. The main advantage of the Custom bonded warehouse is to import goods duty free for assembly or further value added activities that are then re-exported to the EU. Finished goods imported into Switzerland and then re-exported to the EU are potentially subject to duties in both jurisdictions. Goods that require an export license may be exported more efficiently from the U.S.

Additional information may be obtained from the Swiss customs authorities http://www.ezv.admin.ch. This URL is only accessible in the German language; those requiring assistance should therefore contact CS Switzerland for assistance.

Franchising

Switzerland’s small geographic size and population of 7.4 million makes it a challenging market for franchising. In the last three years, well-known U.S. franchisers have scaled back or closed operations in the market. Switzerland’s limited market size, high salaries and high cost of services are all factors that make it difficult for a Swiss master franchisee to be profitable. Since the margins in many sectors are shrinking, it is increasingly difficult to generate a substantial return from a franchise operation making the investment less attractive. Other factors that make franchising challenging is consumer preference for high quality and authentic products and for new innovative ideas. Another factor is that financing is readily available to the Swiss to operate their own distribution, retail chains or stores in Switzerland.

The key to successfully establishing a franchise concept in the Swiss market is the master franchisee or a language area franchisee. Switzerland is a small and multilingual country. Therefore, franchises should be tested in different cultural and linguistic environments: French in Geneva and Lausanne; German in Zurich, Basel and Bern; and Italian in Lugano.

It is advisable to undertake a feasibility study coupled with a sound business plan prior to signing new franchisees. To achieve maximum market penetration, U.S. franchisers should therefore adapt to the norms, standards and high end user expectations. Only rarely can a franchise concept be implemented directly from the United States. Thus, a U.S. franchiser should show flexibility when entering the Swiss market. Since Switzerland is a high-priced country, potential franchisees may find it advantageous to centralize the purchase of supplies in order to offer attractive prices to the consumer.

The legal framework for franchising is the Swiss Code of Obligations, which covers legal situations in agency/licensing agreements, contracting, order placing, business formation and incorporation, as well as brand, trade name and commercial or intellectual property protection.

Swiss Franchise Association

Direct Marketing

Home shopping is becoming increasingly popular in Switzerland. This method of direct marketing has grown enormously in the past few years. The Swiss home shopping boom has reached a record high, and products range from well-known Tupperware and Mary Kay Cosmetics, to lingerie to new recipes and cleansing agents. There are more than 5,700 members of the Swiss Association of Direct Marketing Companies (Schweizerischer Verband der Direktverkaufsfirmen VDF), excluding mail order companies.

Most of the products sold at so-called home shopping parties are top quality and innovative and cannot be found at retail stores. Within the VDF association only the British company Body Shop offers the identical cosmetic and personal hygiene products that can be found in company shops and for the same price. Most Swiss consider the advantages of home shopping to be the following: competent advice offered by the sales person; the relaxed and friendly atmosphere of the private location; the combined experience of shopping and meeting with friends; and the possibility of testing the products on the spot. The following paragraphs describe some of the most popular types of products sold through the direct marketing system in Switzerland.

Books and music: The Bertelsmann-Verlag (Random House) is an example of a large multimedia firm that sells books, CDs, DVDs, videos and a range of products and services.

Personal Hygiene: Beauty products are sold via personal demonstrations at private locations. Personal hygiene products ranging from soap to night creams are ideal for direct sale as home shoppers can try out the various products and profit from the personalized consultation. Amway is one of the strongest representatives in this sector, offering cosmetics and a whole variety of personal hygiene products. Other companies established in the Swiss market include Mary Kay Cosmetics, Deesse, Just, Jafra, Blidor AG and the Body Shop.

Jewelry and Apparel: Companies like Jenny Lane, Pierre Lang and Swiss Feeling AG successfully sell costume jewelry. The direct sale of clothing items has by and large failed due to the modest margins and the huge variety of products. However, direct sales of lingerie for women are gaining in popularity.

Cleansing Agents: “Just” brand products have been sold through home shopping for generations. Other companies that sell top quality, ecologically friendly cleansing products include Blidor, L. Zollinger AG, and Amway.

Household Articles: Items range from Tupperware (every Swiss household has at least one of their famous items) to special cooking pots and pans. A huge variety of electrical appliances and various cleaning devices can also be found in this sector. New-to-market products are especially popular with home shoppers. Borna, Bandar Genossenschaft and Lux are all active in this market segment.

Food/Nutrition: Direct sales are growing for food items like fat-free bouillon, sauces and salt-free spice mixes; multivitamin products and food supplements and power-drinks that cover a whole day’s requirement for vitamins, proteins and minerals. Nahrin AG, Edifors and NBC Nutrition & Bodycare Concept AG are the major competitors in the nutrition sector.

The members of the Swiss Association of Direct Marketing Companies (VDF) are obliged to comply with a code of honor, and by Swiss law, sales contracts may be rescinded within seven days. Many of the VDF members are willing to accept returns even after this time period has elapsed. The association offers assistance should consumers experience problems or misunderstandings that cannot be solved directly with the sales person or manufacturer. New companies that apply for VDF membership must undergo an extensive examination, conducted by the association.

Swiss Association of Direct Marketing Companies

Joint Ventures/Licensing

Legally, a joint venture consists of two or more individuals or corporations joining for the realization of a particular project. Swiss law does not provide specific guidance for joint ventures, which may have any legal form allowed by Swiss law. The name JV is not protected nor can it be registered in the Swiss Commercial Registry (Handelsregister).

Swiss companies often rely upon licensing arrangements to acquire know-how or the right to manufacture new products. In most sectors, U.S. licensors may readily find prospective Swiss licensees with the manufacturing and marketing skills to cover the Swiss market as well as other European markets. Swiss expertise in exporting, flexibility in adapting to difficult markets, and skill in precision engineering can be a competitive advantage for prospective U.S. licensors.

U.S. exporters should carefully evaluate the pros and cons of a licensing strategy in comparison to other methods of market entry. The key to success in licensing lies in screening the prospective licensee to assess capabilities, interest and motivation. Swiss intellectual property legislation protects know-how and patent transfer arrangements. Some cantons allow tax write-offs on intellectual property and tax-free or preferential treatment of royalties earned through know-how transfer and licensing. Appropriate legal advice can be obtained from competent Swiss-based patent and licensing attorneys. The Licensing Executives Society has an active chapter in Switzerland.

Selling to the Government

Swiss government agencies use competitive bids for procurement. As a signatory to the WTO GPA, Switzerland complies with general international rules on procurement by government entities. Switzerland’s federal government and cantonal governments are covered. Procurement at the federal level is generally limited to projects in sectors in which it has primary responsibility -- utilities, transportation, communications, defense and construction.

The Swiss Federal Government has put a priority on funding for research and education. U.S. manufacturers of scientific and laboratory instruments stand a realistic chance to supply a significant portion of the resulting procurement. Total federal government procurement averages over USD 6 Billion annually. The Defense Ministry has some restrictions on foreign purchases. The cantonal and communal governments implement public projects amounting to procurements of about USD 15 Billion annually.

The federal government exercises a great deal of discretion in inviting bids, and selective, discretionary tenders are more common than are public tenders. Contrary to cantonal and communal practice, federal authorities are not required to inform an unsuccessful bidder of the tender award or reasons for the choice. In general, quality and technical criteria are more important than price in bid decisions. Cantons and communes usually prefer local suppliers. Foreign firms may be required to provide a Swiss bank guarantee if they have no local office or representation.

Notices of Swiss government tenders are published in the official trade journal Handelsamtsblatt. Tender documents can be obtained free from the Swiss government agency. While there is no requirement to have a local agent to bid, it is advantageous when equipment needs training, service or parts. CS Switzerland also lists Swiss government tenders on its website and has a direct link to the CS EU website with a comprehensive listing of tenders.

Swiss Government Tenders
Swiss Official Gazette of Commerce

Swiss Offset Policy

Procurement by armasuisse, part of the Federal Department of Defense, Civil Protection and Sports better known by its acronym DDPS, may involve offsets. With regard to national security and armament policy, offset or compensation transactions in cases of procurements abroad have proven successful. As in the past, offset transactions are expected to open up access to foreign markets for Swiss industry or to strengthen its position in these markets. In particular, offset transactions may lead to the acquisition of additional know-how and consequently to additional export value, if the Swiss industry can offer its services at competitive conditions. The Swiss defense department is heavily reliant upon cooperation and expertise from foreign companies due to limited capability in Switzerland.

Additional information may be obtained from armasuisse by visiting: http://www.ar.admin.ch/internet/armasuisse/en/home.html

Distribution and Sales Channels

The most effective method of importing into and distributing within Switzerland depends on the type of product and the location of manufacturing or distribution sites. Capital goods manufacturers may find direct exporting most desirable when contracts with a limited number of customers represent an appreciable share of the market. However, most new-to-market exporters and exporters with products that require training for use and after-sales service should engage the services of a technically qualified Swiss agent with good market knowledge. As a rule, Swiss buyers of raw materials use specialized importers. Large orders, however, may also be placed directly with foreign producers.

Some of the largest international trading and transit companies are based in Switzerland. They operate a network of bonded warehouses and other relevant facilities offering any kind of services needed in international trade.

Suppliers of consumer goods may deal with an importer/wholesaler, engage the services of a representative, or sell directly to buying offices of large retail chains, especially if dealing with mass-produced goods. Often a representative or agent, who usually specializes in one or more product groups, is responsible for distribution in the whole country.

Import and Wholesale Trade: Many Swiss wholesalers are also importers who generally expect exclusive regional or national rights for the imported product. Wholesalers maintain stocks of a range of products and provide quality control, transport, warehousing, and financing. Associations of wholesalers in various sectors protect their common interests and facilitate more effective competition with other forms of distribution. Most wholesalers and importers also belong, either through sector associations or individually, to the Federation of Swiss Importers and Wholesale Traders (Vereinigung des Schweizerischen Import- und Grosshandels).

Retail Trade: Vertically integrated retailers dominate the Swiss market. Department stores, chain stores, consumer cooperatives, discount stores and supermarkets comprise the majority of such retailers that deal in a wide range of products and services. Their vertical structure and centralized buying give them a competitive advantage over independent retailers. The structure of retail trade in Switzerland is changing fast. The number of independent retailers is decreasing, giving way to a growing number of discount stores and supermarkets. Retailers with competitive prices such as Ikea and Media Markt are gaining market share. Individual retailers have set up organizations to provide wholesale purchasing, importing, and other services to compete with the large, vertically integrated retail establishments. Most of the leading retailers are legally structured as cooperatives. In addition to the common department store product lines, they also carry textiles, leather goods, sports articles, pharmaceuticals, toys, and hardware.

Swiss retailers continue to streamline their operations in response to domestic and international competition. Scanner cash registers for bar-coded articles are now standard, and state- of-the-art systems for automated payments without cashiers are in the testing phase. The use of credit cards for payment is now acceptable in most shops. Swiss retail groups belong to an Electronic Payment System Association (Verband Elektronischer Zahlungsverkehr).

Electronic Payment System Association

Selling Factors/Techniques

New-to-market U.S. exporters gain considerable market exposure through trade shows in Switzerland. Moreover, participation in trade shows demonstrates a commitment to the market. Swiss buyers, agents and distributors, to a greater extent than their U.S. counterparts, visit trade shows to find new products.

An exporter's offer must be accurate and comprehensive if it is to be taken seriously by the Swiss. The Swiss receive offers from all over the world, and they are unlikely to devote time to requesting additional details if not already included in marketing information. Relevant information must be provided at the outset with objective and detailed information, including the following: exact product description with technical specifications; price details (CIF or FOB) in U.S. dollars or Swiss francs; method of payment; quantities available; packaging; and transport and delivery terms. An offer should also include information on the exporting firm; production equipment available and quality control factors; and financial references. If minimum quantities for accepting orders are part of contract negotiations, the exporter should adapt to the Swiss importer’s needs, taking into account the relatively small size of the Swiss market.

Commitments should be scrupulously observed or the likelihood of success in the market may be seriously compromised. In the relatively small Swiss market, maintaining a company’s good reputation is critical. Prospective Swiss business partners place high value on a long-term business relationship and commitment to the market.

Payment terms are usually stipulated in the sales contract, can be negotiated, and depend upon the amounts involved. Most common terms are the following: payment 30-60 days net (from the date of the invoice); payment within 10-15 days with 2-3% discount; and payment after 30-60 days with an interest charge. Good customers may expect credit of up to three months. Except for single, one-time transactions, or first-time transactions where there is doubt about the recipient's credit-worthiness, the costly letter of credit (LC) procedure should be avoided. An LC is perceived as depriving the recipient of the means to make deductions for faulty products or shipping problems.

Electronic Commerce

With approximately 70 percent of the Swiss population regularly using the Internet, Switzerland is among the leading countries in the world in broadband Internet usage. Expenditures in telecommunication technologies per capita in Switzerland are among the highest in the world. Private Internet use is the second highest in Europe, and Switzerland ranks third in terms of E-commerce. According to a recent study, 34% of users engaged in e-commerce activities at least once a month during 2007; this rate was two times more than in 2004 (Netzwoche Nr. 20, 2007). Many Swiss use the Internet to buy travel services, to do grocery shopping, to order consumer electronics, computers and, increasingly, household and fashion items. Online sales of Switzerland’s two largest retail supermarket chains, Coop and Migros, are on the rise. Online sales of drugs and pharmaceuticals are also growing, as is the popularity of mail-order shopping companies. Switzerland’s manufacturers’ representatives and dealers are increasingly using e-commerce for B2C sales.

Swiss companies use online procurement to accelerate and streamline B2B business processes and to optimize their supply chain and internal processes. On the whole, Swiss companies are currently investing in security, intranets, services (such as web-enabled process optimization), storage, mobile internet, integration of conventional IT and the internet, content management, CRM, ERP, networking, and web publishing. Initially the domain of large corporations, e-commerce is being embraced by more and more of Switzerland’s 300,000 small and medium-sized enterprises.

In addition to using the Internet as a sales venue, Swiss companies are spending more and more money on online advertising. From 2005 to 2006, Swiss spending on online advertising was USD 2.56 million, an increase of 33% over the previous year. One of the reasons for this development is a shift in focus from print media, which has been predominant in Switzerland, to online media. Industry specialists predict increasing demand for large size, non-standard and non-aggressive ad formats and campaigns, which are now possible due to increasing broadband penetration.

http://www.standortschweiz.ch/seco/internet/en/infrastructure/business/e_commerce/index.html

Trade Promotion and Advertising

Print Media: With much linguistic and cultural diversity, Switzerland has one of the highest per capita densities of newspapers in the world. As a result, many papers are geared to particular regions or localities. The number of dailies has changed only slightly in the past 50 years, but circulation figures have more than doubled. There are over 100 daily or weekly local papers distributed for free and supported by advertising. The Swiss also publish an extensive range of periodicals, trade, and special interest magazines, including those concentrating on travel, gastronomy, medicine, environment, and hobbies.

Given the diversity of publications and the intrinsic characteristics of Switzerland, it is advisable to work through a professional advertising firm, such as Publicitas, when planning an advertising campaign.

Publicitas Swiss Press
Holbeinstrasse 30
8022 Zurich
Tel. (41-1) 250 37 00, Fax. (41-1) 250 37 37
E-Mail: swisspress@N0SPAM.publicitas.ch

Major Swiss Newspapers and Periodicals

Daily Newspapers (German):
Neue Zuercher Zeitung
Tages-Anzeiger
Der Bund

Daily Newspapers (French):
24 heures
Tribune de Genève
Le Matin
Le Temps

Daily Newspapers (Italien):
Corriere del Ticino
Giornale del Popolo

Weekly Newspapers (German):
Handelszeitung
Sonntagszeitung
Die Weltwoche

Business Magazines:
FACTS
Cash
Bilanz
Bilan
L’Hebdo

Pricing

In determining the selling price of a product, particularly for consumer goods, an exporter must take into account the difference between the price an importer is prepared to pay and the prevailing retail selling price. The costs of distribution combined with retail margins may increase the selling price substantially. Markups in Switzerland generally range from 20% to 100%, and can be even higher.

Price controls, part of Swiss competition law since 1986, are primarily aimed at reducing abusive prices for goods and services resulting from a lack of competition and apply only to members of a cartel or similar organizations subject to this law. Parliament has established an office to look into prices that appear to be too high. Although this office maintains considerable informal clout, it cannot institute legal action. The prices of some products are directly influenced by government measures; these are primarily agricultural goods and pharmaceutical products.

Sales Service/Customer Support

Finding a reliable means of providing rapid and efficient quality service and after-sales customer support is absolutely essential in Switzerland. Concluding a sales contract is usually dependent upon the ability to provide this follow-up service which may involve one or more of the following measures: opening an office in Switzerland; finding a competent agent/distributor to provide after-sales service; and/or keeping replacement stock in a Swiss or European warehouse.

Protecting Your Intellectual Property

Introduction

Switzerland has one of the best regimes in the world for the protection of intellectual property, and protection is afforded equally to foreign and domestic rights holders. This topic is discussed more thoroughly under Investment Climate section on "Protection of Property Rights." http://www.ige.ch/defaulte.htm

Several general principles are important for effective management of intellectual property rights in Switzerland. First, it is important to have an overall strategy to protect IPR. Second, IPR is protected differently in Switzerland than in the U.S. Third, rights must be registered and enforced in Switzerland, under local laws. Companies may wish to seek advice from local attorneys or IP consultants. The U.S. Commercial Service can often provide a list of local lawyers upon request.

It is vital that companies understand that intellectual property is primarily a private right and that the US government generally cannot enforce rights for private individuals in Switzerland. It is the responsibility of the rights holders to register, protect, and enforce their rights where relevant, retaining their own counsel and advisors. While the U.S. Government is willing to assist, there is little it can do if the rights holders have not taken these fundamental steps necessary to securing and enforcing their IPR in a timely fashion. Moreover, in many countries, rights holders who delay enforcing their rights on a mistaken belief that the USG can provide a political resolution to a legal problem may find that their rights have been eroded or abrogated due to doctrines such as statutes of limitations, laches, estoppel, or unreasonable delay in prosecuting a law suit. In no instance should USG advice be seen as a substitute for the obligation of a rights holder to promptly pursue its case.

It is always advisable to conduct due diligence on partners. Negotiate from the position of your partner and give your partner clear incentives to honor the contract. A good partner is an important ally in protecting IP rights. Keep an eye on your cost structure and reduce the margins (and the incentive) of would-be bad actors. Projects and sales in Switzerland require constant attention. Work with legal counsel familiar with Switzerland laws to create a solid contract that includes non-compete clauses, and confidentiality/non-disclosure provisions.

It is also recommended that small and medium-size companies understand the importance of working together with trade associations and organizations to support efforts to protect IPR and stop counterfeiting. There are a number of these organizations, both Switzerland or U.S.-based. These include:

- The U.S. Chamber and local American Chambers of Commerce

- National Association of Manufacturers (NAM)

- International Intellectual Property Alliance (IIPA)

- International Trademark Association (INTA)

- The Coalition Against Counterfeiting and Piracy

- International Anti-Counterfeiting Coalition (IACC)

- Pharmaceutical Research and Manufacturers of America (PhRMA)

- Biotechnology Industry Organization (BIO)

IPR Resources

A wealth of information on protecting IPR is freely available to U.S. rights holders. Some excellent resources for companies regarding intellectual property include the following:

- For information about patent, trademark, or copyright issues -- including enforcement issues in the US and other countries -- call the STOP! Hotline: 1-866-999-HALT or register at www.StopFakes.gov.

- For more information about registering trademarks and patents (both in the U.S. as well as in foreign countries), contact the US Patent and Trademark Office (USPTO) at: 1-800-786-9199.

- For more information about registering for copyright protection in the US, contact the US Copyright Office at: 1-202-707-5959.

- For US small and medium-size companies, the Department of Commerce offers a "SME IPR Advisory Program" available through the American Bar Association that provides one hour of free IPR legal advice for companies with concerns in Brazil, China, Egypt, India, Russia, and Thailand. For details and to register, visit: http://www.abanet.org/intlaw/intlproj/iprprogram_consultation.html

For information on obtaining and enforcing intellectual property rights and market-specific IP Toolkits visit: www.StopFakes.gov This site is linked to the USPTO website for registering trademarks and patents (both in the U.S. as well as in foreign countries), the U.S. Customs & Border Protection website to record registered trademarks and copyrighted works (to assist customs in blocking imports of IPR-infringing products) and allows you to register for Webinars on protecting IPR.

Due Diligence

Although the vast majority of Swiss importers are financially reliable business partners for U.S. exporters, there are, nonetheless, occasional bankruptcies. Therefore, U.S. exporters should use normal precautions and analyze relevant company financial background information before establishing a business relationship.

The Swiss Trade Register is a key source for checking the background of Swiss companies. Whenever a Swiss company reaches annual sales of SF 100,000 it must be listed in the Swiss Trade Register with the following information:

• name of firm
• its legal form
• head office (legal domicile)
• list of branch offices, purpose
• owners, partners, managing directors
• persons having power of attorney
• number of shareholders
• year of establishment

Any firm listed in the Swiss Trade Register is considered to be a legitimate company and is required to keep accounts and to maintain a balance sheet. However, the register does not reveal information about a company’s financial status and business practices.

The Swiss Commercial Register is based on Federal Law, the Code of Obligations, but it is implemented regionally by each canton. The Federal Office of Justice maintains Zefix (Central Business Names Index on the Internet) for the purpose of accessing the companies as recorded in the cantonal registers. The entries and changes in the commercial register are published in the Swiss Commercial Gazette (SHAB). Each canton also maintains information on whether or not a registered company has defaulted on payments. That information can be obtained directly from the relevant cantonal office. The U.S. Commercial Service Switzerland offers a business facilitation service to assist U.S. companies in obtaining this information.

The Kompass Register is roughly equivalent to the American Thomas Register. It lists most Swiss companies, but not all. The information presented in the Kompass has been provided by the companies listed. Information includes complete contact address, bank reference, name of president, members of the Board and managing director, a short description of company’s activity, trademarks, share capital, number of employees, and year of establishment. The Kompass CD is available from:

Kompass Schweiz Verlag AG
Hagenholzstrasse 81
CH-8050 Zurich, Switzerland
Tel: (41-1) 802 25 55, Fax: (41-1) 802 25 66
E-Mail: info@N0SPAM.kompassonline.ch

More detailed information on financial data and company reputation can be obtained through credit report agencies like Dun & Bradstreet. Although there are several Swiss companies offering credit reports, D&B Novinform is the largest.

D&B Novinform AG
In der Luberzen 1
CH-8902 Urdorf, Switzerland
Tel: (41-1) 735 61 11, Fax: (41-1) 735 65 84
http://www.dnbswitzerland.ch

It should also be noted that extensive information on Swiss companies can be obtained from Dun & Bradstreet in the United States directly and on-line.

Arbitration

Switzerland is one of the best-known countries for offering a neutral platform for the resolution of political, legal and commercial disputes. Since the beginning of the XXth Century, the Chambers of Commerce and Industry of Switzerland – neutral and private non profit-seeking organizations – have been offering services in the field of arbitration to solve international commercial disputes. In January 2004, the Chambers of Commerce of Basel, Berne, Geneva, Lausanne, Lugano and Zurich unified their former different rules for the resolution of commercial disputes and adopted uniform rules: the Swiss Rules of International Arbitration (hereafter the “Swiss Rules”). With this new instrument for the resolution of disputes in international commercial arbitration, parties and practitioners are certain to submit the resolution of their dispute to a transparent, predictable and cost-efficient system.

The Swiss Rules are based on the Rules of the United Nations Commission on International Trade Law (UNCITRAL Rules), which are well-known and accepted by parties. In order to adapt these rules to the institutional arbitration of the Chambers, two types of changes and additions have been made: (i) changes and additions required to adapt the UNCITRAL Arbitration Rules to institutional arbitration, (ii) changes and additions reflecting modern practice and comparative law in the field of international arbitration. A comparative version of the Swiss Rules, in which modifications the UNCITRAL Arbitration Rules are italicized, is available on the website of the Chambers: http://www.swissarbitration.ch

Local Professional Services

When American citizens are involved in disputes with either private individuals or business enterprises and the controversy cannot be settled amicably, the normal recourse is to seek remedy provided by the law of the appropriate cantonal jurisdiction. American diplomatic or consular officers may not act as attorney, agent, or representative in a fiduciary capacity in such matters. If legal action is to be undertaken in Switzerland, a local lawyer should be engaged either directly or via an American attorney. Since there are differences in the legal systems in Switzerland and the U.S., ignorance of those differences could jeopardize a case almost before it begins. The Swiss lawyer must file a complaint with the court, and the court then decides whether to serve or not. The Martindale-Hubbell Law Directory contains an extensive list of lawyers licensed to practice in Switzerland. The Embassy's Consular Section also maintains a list of lawyers by canton on its website below.

The only methods for a non-Swiss court or lawyer to obtain testimony or to serve process in civil matters in Switzerland are through the Hague Convention on taking of Evidence Abroad in Civil or Commercial Matters, the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matter and through a letter interrogatory. For information on this rather cumbersome legal process, contact either the Embassy Bern Consular Section at bernacs@N0SPAM.state.gov or the Office of Citizens Consular Services in the Department of State (202)647-5226.

U.S. Embassy Bern Consular Section

Web Resources

Setting up a company
Swiss Official Gazette of Commerce
Swiss Franchise Association
Swiss Association of Direct Marketing Companies
Swiss Federal Institute of Intellectual Property
Federal Commercial Register (Central Business Names Index)
Kompass Schweiz
Dun&Bradstreet Switzerland
Swiss Arbitration
Swiss Bar Association