Think of Switzerland
and you might think of fine cheese, luxury chocolate
and snow-capped mountains. But you may also
think of money. Switzerland has one billionaire
for every 80,000 people, making it the third most dense
billionaire population in the world. Only Luxembourg and Hong Kong
have a higher proportion of individuals with a net worth of
at least ten figures. Do you feel like you
know any billionaires? I personally know
quite many billionaires, yes, and millionaires,
yes. I do not know any billionaires,
no, no, no. Plenty of millionaires,
but no billionaires. Do you know any billionaires? No, I don’t! I wish I did,
but I really don’t. Swiss residents are also
among the richest in the world, with a mean net worth
of almost $700,000, ahead of the U.S.
and Hong Kong. That makes the country stand out
on several key wealth metrics. If you look at the income distribution,
it has remained relatively stable over many decades now,
it is much less unequal than many other countries. The average person has it quite good here,
but I mean that doesn’t mean there aren’t poor either.
And then the super-rich, of course. I mean, that difference
is, of course, huge. So, what makes Switzerland such
an attractive place for the uber wealthy, and how does that extreme wealth
affect the rest of Swiss society? As of 2022, Switzerland was home to
an estimated 110 billionaires with a combined wealth
of $338 billion. That’s well above other
super-rich hotspots like Saudi Arabia, Singapore
and the United Arab Emirates. Among some of the country’s
wealthiest residents are Chanel co-owner Gerard Wertheimer,
the heirs of Ikea creator Ingvar Kamprad, and the founders of homegrown
healthcare giant Roche. Switzerland is considered one of
the most politically stable countries, with a strong reputation for
political neutrality. It means wealthy individuals can
trust that their assets will be safe from any sudden leadership
and policy changes. The country also benefits from
an attractive tax system, with low rates for both
corporations and individuals, giving Switzerland a competitive advantage
versus other locations. The tax aspect is one part
of the equation of rich individuals. The form of income that very
rich individuals tend to have is not labor income.
Most of their income tends to be capital income or
capital gains on the companies they hold. And there is no capital gains tax
on financial assets for it here in Switzerland,
which of course is attractive for these kinds
of rich individuals. This means the Swiss aren’t
getting taxed on the profit they make when selling an asset
that’s increased in value. And while there is no capital gains tax,
Switzerland is one of the few European countries with a wealth tax,
but it is set at a relatively low level of 0.1% to 1.1%
of an individual’s net wealth. That tax is levied by
individual cantons, or regions, of which Switzerland
has 26. Martin Bühler, finance chief
for the canton of Grisons, told me this system helps
boost competitiveness. The cantons are responsible for
everything that's not delegated to the confederation or
delegated to the municipalities. We are able to shape our
financial policy independently, but we have some law confederation-wide
where we have to be in line with. We have the very globalized urban centres
like Zurich, like Basel, Geneva, and Grisons is a very big
on the surface canton, but in the periphery,
it's more rural. It means we need other goodies
to find the people, to attract people to live here.
The way we do it, we have, for example, by the wealth tax.
So we have this competition between the cantons
on one hand. But we also are all interested
that this is not exaggerating. Switzerland also benefits from
a strong Swiss franc, which lowers the cost of foreign goods and services
while raising the price of Swiss exports. The country’s currency has
Steadily strengthened over recent decades,
reaching parity with the euro. Meanwhile, it has held steady
against a strong dollar. You don't have to be afraid of a
major depreciation of the currency here, which is kind of related also, of course,
to the political stability, to the strong legal and
institutional setting here. The country is also considered
a leading business destination, with world-class financial services,
pharmaceuticals and chemical sectors. It’s also home to major business institutions
such as the World Economic Forum, which famously gathers global business
leaders to its annual event here in Davos. Switzerland’s banking sector developed
a reputation over the twentieth century as a place of privacy and anonymity,
making it a particularly attractive location for wealthy individuals to store their
cash and potentially avoid taxes. That system came under scrutiny
following the Global Financial Crisis and the failure of several
major Swiss banks, forcing the industry to clean up its act and
require greater transparency from clients. But still it has retained its status
as a hub for wealth management. Historically, that has been part of
what the Swiss banks have been doing essentially, helping rich individuals
evade their taxes in other countries. They've moved away from that
business model and try to keep moving away from it because the
international regulations have become stricter. The shift comes as governments face
increasing pressure to rein in the so-called billionaire class
as many continue to struggle with the
cost-of-living crisis. A 2024 Oxfam report found that
the combined fortunes of the world’s five richest men have more
than doubled to $869 billion since 2020, while five billion people
have been made poorer. So what does Switzerland’s
ultra-rich population mean for the rest of the county
and social cohesion overall? To focus only on rich people
would not fit anymore. So we have to rethink.
We have to get attractive for all parts for young people, for,
I say, low qualified personnel. It's not that easy anymore to say
we can focus on this and the rest is okay. It’s a problem that there are
so big differences, but we’re lucky that we
are living in Switzerland. It’s definitely true that Switzerland
does have a bigger gap between the richer ones and,
not poor, because we’re not, but the less wealthy ones
you could say. Despite the extremes, however,
Switzerland continues to rank highly on liveability and
social harmony indices. That is seen as being down to the
country’s social policies and labor laws, which ensure decent living
standards for the less well-off too. You see that the workings of the labor market,
the education system that makes sure that even people
further down the distribution actually make good incomes,
has worked for a long time very well. If you think about the system
in which there is a social structure so that people who don’t earn that much
can still live quite well, that is probably a key
element to the society.
