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

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Switzerland and the Greater Zurich Area provide a
unique blend of top-notch infrastructure, knowledge
base, talent pool, liberal legal framework and administrative
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.
http://www.greaterzuricharea.ch/

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

  1. 1. 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).
  2. 2. 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 technol­ogy 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
  3. 3. 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. • World-class 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. • Tax-optimization 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 Zurich www.ethz.ch University of Zurich www.unizh.ch EMPA Swiss Federal Laboratories for Material Testing and Research www.empa.ch IBM Zurich Research Laboratory www.zurich.ibm.com PSI Paul Scherrer Institute www.psi.ch CSEM Swiss Center for Electronics and Microtechnology www.csem.ch Google European Engineering Centre www.google.com Disney Research Zurich http://graphics.ethz.ch/~grossm/disney/disney/ drz.php
  4. 4. Greater Zurich Area AG, May 2013: Intellectual Property 4 Switzerland Greater Zurich Area AG Limmatquai 122 8001 Zürich / Switzerland Phone +41 44 254 59 59 Fax +41 44 254 59 54 info@greaterzuricharea.ch www.greaterzuricharea.ch USA Greater Zurich Area Inc. swissnex building 730 Montgomery Street San Francisco, CA 94111 / USA Phone +1 415 912 5909 CHINA Jianping 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!

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