But to guarantee the success of your cross-border imports and exports, there are five key points to consider. And here they are!
#1 The volatility of the EUR/CHF exchange rate
Fluctuations in the exchange rate between the Euro (EUR) and the Swiss Franc (CHF) are the cause of significant risk for cross-border importers and exporters – this is known as exchange risk.
The lag between the date of an invoice and its settlement date exposes buyers and sellers to the risk of a drop in the domestic value of foreign currency invoices.
This is a real issue – fluctuations in the EUR/CHF exchange rate have a direct impact on your bottom line and the profitability of your business.
In 2015 the Swiss franc suddenly soared by over 20% against the single currency – giving Swiss exporters and European importers a lot to worry about.
To avoid this kind of problem, you can put a coverage strategy in place to offset your exposure to exchange risk through buying or selling financial derivatives. An even easier option is to set your exchange rate in advance using our services for business.
Exchange your money quickly and securely
#2 Intermediary exchange fees
When converting your Swiss francs into Euros (or vice versa), your financial intermediary earns an exchange fee that may not be all that transparent.
It is in your interest to understand the detail of the fees charged so you know for sure that the exchange rate is as competitive as it looks!
Non-specialist banking intermediaries often offer unattractive rates accompanied by a complex fee system stuffed with hidden charges.
Don’t fall for this. Ask for an offer that is competitive and transparent. Savings of around 10% are not to be sniffed at when seen in the context of your turnover or against your purchase invoices.
But be careful – although optimizing your exchange rate makes sense, you also need to consider the reputation, quality, expertise and responsiveness of your intermediary!
#3 Insurance against export risks
To ensure the smooth running of your business contracts it is best to protect yourself against the risks most likely to disrupt your export operations, whether these involve the execution of a contract or the payment of a debt.
From the Swiss side, Swiss insurance against export risk (SERV) will protect your operations against political and del credere (commercial) risk. From the French side, the French Public Investment Bank (BPI) provides guarantees.
#4 Administrative processes
Goods entering Switzerland must be declared using a customs declaration for import supported by other required documentation (proof of origin, invoices, authorizations, etc). The list of documents required depends on the nature of the goods.
Goods leaving Switzerland are subject to a customs declaration for export which also contains documentation required for exported goods.
The tariff headings needed for these are found on the TARES website.
NB: In the case of regular shipments, you can obtain Authorized Consignor status to streamline the declaration process, and then begin the Authorized Consignee process to simplify customs clearance procedures.
#5 Custom fees and VAT
Finally, while goods exported from Switzerland are exempt from VAT and duty fees on the Swiss side, imported goods are taxed.
The duty applied to imported goods depends on several variables (type, weight, amount, etc). As for VAT, this is applied at a standard rate of 7.5%, with a reduced rate of 2.5% for some cultural and medical goods.
So there you have it! With currency exchange queries and administrative issues under control, you can focus all your attention on what’s really important: developing your business.