Low on taxes, high on risk-aversion
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Zurich, the world’s private banking capital, is not just luring in old money. Ambitious founders are making Switzerland’s largest city their base – albeit away from the pretty, but expensive, old town.
The case for: One word sums it up: efficiency. Whether registering your company name or catching a train to a client meeting, the hassle is minimal in Zurich. Google, a source of tech start-up support, has its European headquarters here. This is not just for tax reasons, although Zurich is attractive on that score too: a zero per cent capital gains tax rate is catnip to risk takers.
The city’s universities are also impressive, not least ETH Zurich, and generate a ready supply of talented, often multilingual, workers.
The case against: Failure is particularly frowned upon here. Zurich is also expensive. Some complain that corporate life here operates in a closed environment – in contrast to Silicon Valley, New York, Berlin and London, where people feel free to meet and exchange ideas. Outsiders often struggle to gain connections.
Local heroes: Joiz is a digital TV channel that allows viewers to interact with what they are watching on TV using a laptop, a tablet device or a smartphone. It launched in Switzerland in 2011 and is now also in Germany.
Dacuda, founded in 2009, develops scanning and image reproduction technology that is used by more than 1m people in more than 130 countries. It recently won investment from Wellington Partners, backer of fast-growing European tech businesses, including Spotify and Hailo.
Loylogic builds and runs online loyalty programmes for the web and mobile phones. Its technology is used by more than 3,000 merchants, offering 40m products and services.
On is a designer of high- performance running shoes, now available in more than 18 countries and at more than 500 specialist shops.
Ease of reach: An international airport is 20 minutes from the city centre by train, meaning passengers can reach most European capitals from Zurich within two hours. A new city centre train station is due to open in June. Moreover, the Swiss government has pledged to spend SFr6.4bn upgrading the rail and bus infrastructure.
Show me the money: Switzerland has the highest per capita level of private equity funding in the world, beating even the US. But getting potential investors to write cheques is still hard, particularly for follow- up funding rounds, founders say.
Pitching events and teaching on fundraising techniques are run in Zurich by CTI Invest. Local incubator Venturekick gives grants of SFr100,000 to top teams on its programme.
Large locally based companies, such as Tamedia, Ringier, Google and SwissLife, also provide an exit route by acquiring promising young ventures.
What do the locals say? Alexander Mazzara, chief executive and co-founder of Joiz: “You don’t get a Swiss franc from the government but they have made it really easy to start up a company here.”
Alain Falys, co-founder and chief executive of Yoyo, a mobile payments business, who lives in both the UK and Switzerland: “Zurich is a difficult location to create and grow a start-up, unless you are Swiss.”
Steffen Wagner, the co-founder of Investiere.ch, a group for wealthy individuals looking to back start-ups: “Risk is not something Switzerland is known for, but I have noticed a positive change in the last few years.”
(By Jonathan Moules)
Source: FT
