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The Advantages of Switzerland as an
IP Management Location
Dr. Andreas Glarner is a partner with MME Partners, where he
works with international companies in the technology, industrial and
internet sectors. He specializes in the fields of intellectual property,
unfair competition, licensing and distribution, as well as information
technology. In addition, he has extensive expertise in compliance
matters regarding gambling providers, e-transactions and export
control measures.
Philippe Keller is managing partner of Treureva, a tax consulting
and auditing firm. He focuses on administration and support
for international corporations, on audits of trading and service
companies, and on audits in the occupational pensions sector.
MME Partners
Kreuzstrasse 42
CH-8008 Zurich
+41 44 254 99 66 Phone
+41 44 254 99 60 Fax
Treureva Ltd
Othmarstrasse 8
CH-8024 Zurich
+41 44 267 17 38 Phone
+41 44 267 17 10 Fax
Andreas Glarner
Philippe Keller
In 2011, the Canton of Nidwalden in
Switzerland introduced its License Box,
an attractive tax regime for IP (Intellec-
tual Property) companies with a reduced
tax rate for license income. After two
years of positive experience, it may be
considered the most liberal and advanta-
geous among comparable systems within
the European countries.
Switzerland as Location for
Innovation Companies
Switzerland is not only one of the world's
leading financial centers, but also
provides an outstanding environment
for innovation. Switzerland ranks first in
World Intellectual Property Organiza-
tion's Global Innovation Index 2012 and
is according to the Innovation Union
Scoreboard 2013 the overall innova-
tion leader in Europe, outperforming all
Member States.
Factors which enable Switzerland to
hold this position are certainly a stable
political situation, a very stable cur-
rency with minimum transfer restrictions,
highly sophisticated and secure financial
institutions and the fact that Switzer-
land is home of some of the world's
most recognized research institutions.
Furthermore, its geographic location in
the heart of Europe, its rich nature and
the high quality of life, make Switzerland
attractive for highly educated personnel.
Another key factor lies in Switzer-
land's tax system: Traditionally, Switzer-
land is known for competitive tax rates.
This, on the one hand, is due to the fact
that Switzerland has a direct democ-
racy in which taxpayers have the right
to vote on tax issues and governmental
expenses. On the other hand, the states
(cantons) are competing with each other
to offer benefiting tax regimes which
attract companies and individuals. With
the introduction of the License Box
system in 2011, the Canton of Nidwalden
further reduced the taxing obligations for
IP companies on net license income: The
fixed income tax on net license income
derived from the use of intellectual
property is only one fifth of the regular
income tax, i.e 8.8%.
Other European jurisdictions know
very similar tax regimes for income
generated through IP rights. This article
will provide an insight on the differences
of the different regimes and particular
Concept of the License Box
The IP tax regime allows a legal entity
with a statutory domicile in the Canton of
Nidwalden to operate a separate division,
the License Box, as part of its regular
commercial operations. All IP and
research and development (R&D) related
activities, in particular related license
incomes, are attributed to the License
Box within the company. Incomes
generated by the License Box are subject
to the reduced tax rate.
Consequently, the License Box
system allows a company to conduct any
kind of operational business activities
Europe, Middle East & Africa