Switzerland 2009 FPA-EAME Country Presentation

1. Switzerland 2009FPA-EAME Country Presentation Jonathan Lachowitz CFP(R) jonathan_lachowitz@white-lighthouse.com

2. Map of Switzerland

3. Key Statistics • Founded in 1291 • Known for political and economic stability • Located in the heart of Europe • Population 7.6 million - Ranked 95th in the world • 2008 GDP (At PPP) $310 Billion Ranked 39th in the world • 2008 GDP per Capita $41,000, Ranked 17th in the world • 4 National Languages: German (64%), French (20%), Italian (7%) And Romansch (1%) Other (8%) • Religion: 80% Catholic or Protestant • Life Expectancy at Birth 81 (78 men, 84 women) • Fertility rate low 1.45 children/woman • 21% of the country’s population are foreigners 26% of children under 6 don’t have Swiss nationality • After Germany, the US and France are the biggest destinations for Swiss Living Abroad.

4. Key Economic Information • Currency Swiss Franc • Very low long term inflation rate <3% • Unemployment ~3% • Key Industries: Watches, Tourism, Banking and Insurance, Chemicals, Machinery • Reserves of Foreign Currency and Gold $75 Billion

5. Geography • 41,000 Square Kilometers (About 2x the size of New Jersey) • Borders: Germany, France, Austria, Italy and Lichtenstein • Mostly mountains with a central plateau and many large lakes; <10% arable land • Excellent transportation infrastructure: Roads, Rail, Buses, Boats and Airports • Rhone and Rhine rivers start in Switzerland

6. Political Structure • Divided into Federal, Cantonal and Communal Governments • 26 Cantons • About 2900 Communes • Very strong tradition of direct democracy and decentralized decision making • Federal Council has 7 members; Each year a different member becomes president • Legislative Branch divided into two Chambers: 1) National Council and 2) Council of Cantons

7. Taxes • Income tax levied at Federal, Cantonal and Communal Level • Federal top rate: 11.5% • Cantonal and Communal can go up to 35% though varies greatly • AVS (Social Security tax) 10.1% (half employee and half employer) • Wealth tax – 0% to 1.5% per year, progressive • Value Added Tax – 7.6% • Capital Gains on Real Estate (average 18%, depends on holding period); no capital gains tax on financial gains. • Stamp Taxes - .15 to .3% on financial transactions • Corporate Taxes vary by Canton; at the Federal level, 8.5% • Residents taxed on worldwide income • Non residents taxed on income arising from permanent establishments and real estate in Switzerland • Several Withholding taxes: 35% on interest and dividends

8. Stock Exchanges • SMI – Swiss Market Index – Top 20 companies on Swiss Market 85% value • http://www.six-swiss-exchange.com/index.html • Top 3 Companies Nestle, Novartis, Roche = about 60% of the SMI’s weight • Exchange controlled by association of 55 banks • 2nd exchange in Switzerland in Bern; 50 Swiss SMEs including Swatch Group

9. Banking Industry • Over 400 Commercial Banks • Financial Sector 14% of GDP, 180,000 employees (5.6% of workforce), 110,000 work in banks • About 1/3 of global offshore (outside of country of origin) funds estimated to be in Switzerland • Swiss Bankers Association: http://www.swissbanking.org/en/home.htm • Swiss Financial Market Supervisory Authority (FINMA) http://www.finma.ch/e/Pages/default.aspx • Central Bank - The Swiss National Bank http://www.snb.ch/en • 24 Cantonal Banks • Banking in Switzerland: http://en.wikipedia.org/wiki/Banking_in_Switzerland

10. Financial Planning • SFPO – Swiss Financial Planning Organization licenses CFP® marks in Switzerland – About 250 members, established in 1999 • IFFP.CH – Institute for Financial Planning – commercially run education in financial planning • IAF – Association for Continuing Education in the Financial Industry – about 30 corporate members • Investment managers have to be a member of an SRO to control against money laundering