• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/30/2013

Switzerland – Free trade agreement with China 

August 30: Representatives of the governments of Switzerland and China in July 2013 signed a free trade agreement—making Switzerland the first country in continental Europe to enter in such an agreement with China.

The free trade agreement applies for trade in goods and trade in services; and the agreement also provides rules concerning intellectual property, investment promotion, environmental issues as well as government procurement.

In general, Swiss exports will be exempt from import tariffs in China (immediately for some goods, and phased in over a number of years for other goods).

KPMG observation

As has been observed, the new free trade agreement—together with the income tax treaty between Hong Kong and Switzerland (that entered into force in October 2012)—makes Switzerland an attractive headquarters location for Chinese and Hong Kong companies, as well as may provide an ideal gateway to Europe for these companies.

In order to react appropriately and effectively, companies need to start preparing now for changing rules for customs procedures, rules of origin, trade facilitation, trade remedies, non-tariff barriers to trade, etc., or for direct investments so as to benefit fully from the new free trade agreement.

Read a 2013 report [PDF 709 KB] prepared by the KPMG member firm in Switzerland: Switzerland-China Free Trade Agreement: A great opportunity for the Swiss import and export industry

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