Import and Export in Switzerland: 5 key points not to overlook
Since 1 January 1973 and the signing of a free trade agreement between Switzerland and the European Community, Swiss and French companies have benefited from a legal framework conducive to the development of fruitful commercial relations.
• EUR/CHF volatility poses a major risk for import-export businesses, as illustrated by the franc's sudden 20%+ surge in 2015.
• Fees charged by your financial intermediary deserve close attention: some banking players apply opaque margins and hidden fees.
• Export risk insurance rounds out the key precautions for securing cross-border import-export operations.
However, in order to ensure the success of your cross-border import-export operations, there are five key points that require particular attention. Here they are!
#1 Volatility in the EUR/CHF exchange rate
Fluctuations in the exchange rate between the euro (EUR) and the Swiss franc (CHF) create a significant risk for cross-border importers and exporters: currency risk.
Indeed, because of the time lag between the invoicing date and the date payment is received, both buyers and sellers are exposed to the risk that an invoice denominated in a foreign currency will lose value once converted into the local currency.
Far from being trivial, these fluctuations in the EUR/CHF exchange rate have a direct impact on your trading margins and your company’s profitability.
In 2015, the sudden surge of more than 20% in the value of the Swiss franc against the single currency caused considerable trouble for Swiss exporters and European importers…
To avoid this kind of setback, you can put in place a hedging strategy to offset your exposure to currency risk by buying or selling financial derivatives. Even more simply, you can also lock in your exchange rates in advance with our solution for businesses.
#2 Your intermediary’s currency exchange fees
When converting your Swiss francs into euros (or vice versa), your financial intermediary earns money by applying a more or less transparent exchange margin.
In your own interest, however, it is essential to understand in detail the amounts being deducted, so that you can be certain of benefiting from a genuinely competitive effective exchange rate!
Non-specialist banking intermediaries indeed tend to offer unattractive exchange rates, coupled with a complex fee schedule riddled with “hidden” charges.
Don’t get caught out — insist on a competitive, transparent offer. A few tenths of a percentage point saved are not insignificant once applied to your turnover or your purchase invoices.
> Calculate the savings you could make with our online simulator
Do bear in mind, however, that while it is in your interest to optimise your exchange fees, the credibility, quality, expertise and responsiveness of your intermediary should also be taken into account!
#3 Export risk insurance
To ensure your commercial contracts are properly performed, it is best to protect yourself against the main risks that could affect your export operations, whether these risks arise during performance of the contract or when the receivable is repaid.
On the Swiss side, Swiss Export Risk Insurance (SERV) allows you to effectively protect your operations against political risks and del credere risk (commercial risk). On the French side, you can instead turn to the guarantees provided by the Public Investment Bank (BPI).
#4 Administrative formalities
Goods entering Switzerland must be declared by means of an import customs declaration accompanied by the required documents. Proof of origin, invoices, authorisations… the exact list of documents needed depends on the nature of the goods.
Goods leaving Switzerland must in turn be covered by an export customs declaration, which likewise must include the documents required depending on the goods being exported.
The tariff numbers needed for these formalities can be found on the TARES website.
NB: For regular shipments, you can also obtain Authorised Consignor status to simplify the declaration process, and then launch the EDa procedure to simplify the customs clearance process this time round.
#5 Customs duties and VAT
Finally, while products exported from Switzerland are exempt from VAT and customs duties on the Swiss side, imported goods are taxed.
The customs duties applied to imported goods will depend on several factors (nature, weight, quantity, etc.). VAT, meanwhile, is applied by default at a rate of 7.7%, with a reduced rate of 2.5% for certain cultural or medical goods, among others.
Now that currency exchange matters and administrative issues are under control, you can focus all your attention on what really matters: growing your business!
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