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The State of ImmigrationSwitzerland

A Business-Friendly Approach to Immigration

Switzerland maintains pro-growth policies on high-skilled foreign nationals, intracompany transfers and retaining international students postgraduation, with applications for high-skilled work permits and transfers rarely denied. The country’s agreement with the EU provides access to its 500 million residents as a source of labor. The potential for quotas on the admission of EU citizens starting in 2017, due to the 2014 referendum, creates uncertainty until resolved, but it should not affect policies in 2015 or 2016.

Located in the center of Europe and sharing borders with five countries, Switzerland has established business-friendly immigration policies and is one of the leading nations for immigration due, in part, to its agreement on free movement with the European Union (EU).

For those in America who argue increased immigration means a higher unemployment rate, Switzerland helps disprove that economic fallacy (which ignores the reality that new workers consume goods and services, creating an increased demand for labor). Switzerland’s unemployment rate fell from about 3.8 percent in January 2005 to 3.1 percent in December 2012, while at the same time the annual inflow of immigrants to the country increased by more than 40 percent.91

The percentage of foreign born in the country is 28 percent (approximately twice the U.S. level), and with a population of about 8 million, its annual flow of new immigrants is approximately five times the level of the United States.92

Work permits for intracompany transferees and other high-skilled foreign professionals coming from outside the EU generally are approved, despite the labor market test requirement on certain temporary visas.93 Non-EU international students are provided six months to find employment. EU citizens can receive permanent residence after five years; individuals from outside the EU can receive it in 10 years.

Although not an EU member, Switzerland and the EU allow free movement across their borders, giving Swiss citizens the right to work in EU countries and EU citizens the right to work in Switzerland. A February 2014 referendum in Switzerland requires the government to place quotas on the entry of EU citizens, although a number was not specified. The Swiss government has not decided on a quota and has until 2017 to implement the referendum to limit the immigration of EU citizens into Switzerland.

“The free movement of people is an important principle for the European Union,” said attorney Sara Rousselle-Ruffieux. “If you place a quota, then you limit the principle, and it’s unclear how the EU would react to that.”94 That is the dilemma facing the Swiss government. In November 2014, Swiss voters rejected by a wide margin even tighter immigration restrictions.

Given its location and low unemployment rates, Switzerland will continue to attract immigrants. Government officials must balance the need to maintain pro-growth policies with the wishes of voters. 

91. Organisation for Economic Co-operation and Development, Trading Economics.
92. Organisation for Economic Co-operation and Development.
93. Interview with Nina Perch. There is no labor market test for intracompany transferees.
94. Interview with Sara Rousselle-Ruffieux.

Score Breakdown: Switzerland vs. United States

Attracting Foreign Entrepreneurs
Attracting Foreign Entrepreneurs
3.0 (vs. United States 1.5)

Entrepreneurs from the EU can set up businesses without immigration processing. Non-EU citizens can submit plans to gain temporary visas as entrepreneurs, although the process is not easy.

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Hiring High-Skilled Foreign Nationals
Hiring High-Skilled Foreign Nationals
3.5 (vs. United States 2.0)

Applications for high-skilled people are rarely turned down. However, employers must pay a market wage and conduct a labor market test. Although not reached in 2014, quotas exist for non-European Union (EU) workers. Switzerland’s agreement with the EU provides access to 500 million people who can work without any immigration processing. That will remain the case unless the government imposes quotas on immigration from the EU due to the 2014 referendum.

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Hiring Lower-Skilled Workers
Hiring Lower-Skilled Workers
3.5 (vs. United States 1.5)

Switzerland’s agreement with the EU provides access to 500 million people who can work without any immigration processing and provides much of its lower-skilled labor needs. In practice, no work permits are granted for lower-skilled work by non-EU nationals entering the country.

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Lawful Permanent Residence For High-Skilled Workers
Lawful Permanent Residence For High-Skilled Workers
3.5 (vs. United States 2.5)

EU nationals can become permanent residents in five years; non-EU nationals must live in country for 10 years to become permanent residents, which is longer than in most advanced economies. Currently there are no annual quotas on grants of permanent residence.

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Retention of International Students Postgraduation
Retention of International Students Postgraduation
4.0 (vs. United States 3.0)

EU students can stay and work postgraduation without immigration processing. Non-EU students can stay for six months postgraduation to seek employment. Once employment is found, work permit approval for non-EU students is subject to quotas and labor market tests (the labor market test is exempted for work considered of high scientific or economic value).

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Transferring High-Skilled Employees Across Borders
Transferring High-Skilled Employees Across Borders
4.0 (vs. United States 3.0)

EU nationals currently can transfer into Switzerland to work on local employment contracts without immigration processing or checks on salary; EU nationals on assignment must be paid a comparable Swiss salary. Employers must pay non-EU employees at comparable Swiss salary levels. 

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About the Report

Business Roundtable selected the evaluated countries based on five criteria:

1. Worldwide university rankings;
2. Per-capita income;
3. Gross domestic product growth rate;
4. Net migration rate; and
5. Research and development investment.

After comparing each advanced economy relative to the five criteria, the top 10 countries (including the United States) were selected for the study: Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom (U.K.). Not coincidentally, these are the countries with which the United States competes most for foreign talent, particularly in science and technology fields.

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