Greater Zurich Area AG, May 2013: Intellectual Property 1

Switzerland and the Greater Zurich Area provide a

unique blend of top-notch infrastructure, knowledge

base, talent pool, liberal legal framework and adminis-

trative efficiency. There is virtually no industry and no

service sector that would not be well advised to consider

the Greater Zurich Area as a main pillar for their EMEA

or global operations.

With emphasis on high value creation rather than vol-

ume, corporate structures focusing on central manage-

ment and headquarters functions in a low-tax environ-

ment make the Greater Zurich Area a prime destination

for sophisticated operations and services.

IP rights management

In the age of digital information and media, a growing

healthcare sector and intense competition in brand

driven and innovative industries, management of intel-

lectual property (IP) rights has become a critical factor

for economic success.

Adding Value: Intellectual Property (IP) Management in the Greater Zurich Area

With the highest patent per capita ratio, a great

tradition in life sciences and innovative technology, as

well as a sophisticated legal framework for intellectual

property, Switzerland and the Greater Zurich Area of-

fer diverse and customized solutions for multinational

corporations to centralize their IP management. A Swiss

IP company or branch promises better control, cheaper

administration, higher protection, enforcement, and

securitization of globally generated IP.

A Swiss IP company or branch has significant potential

for tax optimization. If commercial and licensing activ-

ities are performed mostly outside Switzerland, and

if the company has only limited activities in the Swiss

market, tax privileges (mixed or holding company) may

apply on a cantonal level. With that, effective tax rate

varies from 8 to 12%.

Equally, an IP company or branch can be integrated into

corporate structures such as a Business Control Center

(BCC) or Shared Services Center (SSC) leading to further

efficiencies and cost savings on the federal level.

Prime examples of such best operating practices are intellectual property (IP) management, and research & development (R&D).

Greater Zurich Area AG, May 2013: Intellectual Property 2

Benefits of migrating IP to the Greater Zurich Area

• Efficient IP registration.

• High level of legal IP protection, attractive venue

for arbitration.

• Swiss double taxation treaty network for license

income (IP company only; for Swiss IP branch,

double tax treaty network of head office’s location

is applicable).

• Over 25 treaties with 0% withholding tax (includes

all EU member states).

• Mixed company privilege available for IP company

or branch. With that, effective tax rate varies from

8 to 12%.

• No withholding tax on royalty payments to a Swiss

company from most countries.

• No Swiss withholding tax levied on royalty

payments and interest payments (both being tax

deductible).

• Usually no Swiss VAT.

• R&D costs generally deductible.

• IP may be depreciated over 5 years.

• No stamp duty on migration of IP into Switzerland.

Research & development (R&D) in the Greater Zurich

Area

One of the highest national research and development

(R&D) expenditures in the world, sky-high innovation

and patent registration levels as well as top-notch aca-

demic and corporate R&D laboratories appeal to schol-

arly and private researchers alike to set up shop in the

Greater Zurich Area.

World-class institutes such as the University of Zurich

and the ETH Zurich (Swiss Federal Institute of Technol­

ogy), the renowned PSI Paul Scherrer Institute and the

IBM Zurich Research Laboratory, have appealed to Swiss

and international scientific elite for over a century, gar-

nering the region with nearly two dozens Nobel laure-

ates.

Great efforts are undertaken in the area of technol ogy

transfer between academic research, applied sciences

and corporations. Science parks, business incubators

and various financing vehicles (e.g. Venture Capital,

Research Funds, or the SIX Swiss Exchange), in particular

for industries such as Pharma / Life Sciences, as well as

Micro­ and Nanotechnology abound.

This and an unmatched quality of life have helped to

retain a great amount of know-how, expertise and in-

tellectual capital in the Greater Zurich Area – a priceless

asset for any region.

For companies, especially those active in auspicious,

innovation-prone industries, Switzerland’s intellectual

property protection is an additional plus. Being a signa-

tory to the WIPO (World Intellectual Property Organiza­

tion) Convention and a comprehensive legal system of

patent, trademark, design and other IP rights set up by

the Swiss Federal Institute of Intellectual Property (IGE)

are guarantors for the highest protection of innovation,

creativity, and intellectual property.

The Greater Zurich Area offers an expedient legal and fiscal framework for efficient and cost-effective development, administration and exploitation of intellectual property rights on a global scale.

The Greater Zurich Area is a haven for lead-ing edge research and development (R&D) at academic and corporate level.

Switzerland scores in R&D competitiveness

Switzerland had an excellent overall score and man-aged to be in the Top 10 in the following categories:• Basic research (no.1)• Nobel Prizes per capita (no.1)• Intellectual property rights (no.1)• Innovative capacity (no.3)• Private research expenditure in % of GDP (no.8)• R&D employees per resident (no.8)• R&D expenditure per resident (no.9)

Sources: WEF 20011/2 / IMD 2011/2 Competitiveness Reports

Greater Zurich Area AG, May 2013: Intellectual Property 3

An R&D laboratory of an international company can be

set up as part of a Swiss principal, e.g. managing the

company’s IP rights. Provided that these R&D operations

do not violate the principal status and that IP of research

results is being delegated to the principal, they can be

located in the Greater Zurich Area. Companies can tap

into its vast pool of knowledge and talent, while en-

joying the favorable tax environment of the region.

R&D activities are taxed on a cost plus basis. A mixed

company status may also apply to the principal (effec-

tive tax rate of 5 to 12%).

Benefits of locating your R&D activities to the Greater

Zurich Area

• Great R&D talent pool and skills available.

• World­class research institutes.

• Financial center Zurich offers various funding

opportunities (e.g. SIX Swiss Exchange).

• Switzerland scores high in innovation, patents.

issued, and competitiveness.

• High level of IP protection.

• Excellent knowledge transfer.

• Tax­optimization models apply.

Thanks to an outstanding scientific and financial infrastructure, and to a busi-ness-friendly administrative, legal and fiscal framework, setting up an R&D operation in the Greater Zurich Area will result in the highest return on investment.

World-famous research institutions in the Greater Zurich Area

ETH Zurichwww.ethz.ch

University of Zurichwww.unizh.ch

EMPA Swiss Federal Laboratories for Material Testing and Researchwww.empa.ch

IBM Zurich Research Laboratory www.zurich.ibm.com

PSI Paul Scherrer Institutewww.psi.ch

CSEM Swiss Center for Electronics and Microtechnologywww.csem.ch

Google European Engineering Centrewww.google.com

Disney Research Zurich http://graphics.ethz.ch/~grossm/disney/disney/drz.php

Greater Zurich Area AG, May 2013: Intellectual Property 4

SWITZERLANDGreater Zurich Area AGLimmatquai 1228001 Zürich / SwitzerlandPhone +41 44 254 59 59Fax +41 44 254 59 54info@greaterzuricharea.chwww.greaterzuricharea.ch

USAGreater Zurich Area Inc. swissnex building 730 Montgomery Street San Francisco, CA 94111 / USA Phone +1 415 912 5909

CHINAJianping Gao Representative China Phone +86 21 6149 8208

Have we sparked your interest?

Would you like to get to know your options in the Greater Zurich Area in more detail?

If yes, please contact your nearest Greater Zurich Area representative for more information.

We are happy to assist you in every aspect of expanding your business to the Greater Zurich Area!