Appenzell Ausserrhoden: An attractive prospect – Karin Jung

The small Swiss canton of Appenzell Ausserrhoden offers the ideal place for businesses to relocate. Karin Jung, head of the office for economics, discusses the area's new tax legislation, talented workforce and pleasant pace of life.

What makes Appenzell Ausserrhoden such a good location for businesses?

Karin Jung: The canton's multifaceted economic structure offers a diverse range of opportunities for skilled workers and apprentices. In addition to large companies, there are numerous small and medium-sized enterprises seeking highly skilled professionals and the latest university graduates.

A growing number of new businesses have recently set up their offices in the canton, in part because corporate profits are taxed at only 6%, but also because we provide an atmosphere conducive to industry. With a population of around 53,000, the canton's small size has created a manageable and efficient corporate environment, free of the excessive bureaucracy of larger districts.

How can the canton's individual and corporate tax rates help to attract businesses?

In terms of corporate taxation, Appenzell Ausserrhoden is among the most attractive locations in Switzerland, and Europe as a whole. In 2008, the canton revised its tax legislation to 6%, which, together with the federal tax, means a remarkably low 12.6% rate on pre-tax profits. This gives the companies and shareholders that relocate to our canton relief from the massive tax burdens they would face in their home countries.

There are other benefits too. Overall dividend liability on shares that are at least 10% of the trade-in value has been reduced to 60%, which greatly lessens the double burden of taxation. Inheritance and capital transfer tax have also been reduced by 90% for company succession.

On top of this, Appenzell Ausserrhoden is a great location for private high-net-worth individuals, with effective tax rates for personal income ranging between 11.81% and 28.48% for single people, and from 5.13% to 28.25% for married couples with children.

"With a population of 53,000, the canton's small size creates a manageable corporate environment, free of the excessive bureaucracy of larger districts."

What infrastructure does Appenzell Ausserrhoden have in place to aid industry?

The canton is well situated within the wider country. It has an interwoven public transport system with solid rail and bus links, and road connections to major towns (St Gallen) and airports (Zürich, Altenrhein or Friedrichshafen).

It also has a well-developed, modern education system ranging from kindergartens and primary schools to grammar schools and vocational colleges.

What is the quality of life like in the canton?

Appenzell Ausserrhoden is located between the Lake of Constance and the Saentis, not far from the city gates of St Gallen, so it's an ideal place to relocate.

It's a small part of the world, but it has a high standard of living for people of all ages. The canton's three districts - Hinterland, Mittelland and Vorderland - are all serene places to live, tucked away from the bustle of the city.

Appenzellerland's velvety hills offer a large expanse of land with countless long and short trails to be explored and enjoyed by residents. The countryside also has a wide range of cultural goods and traditions that make it the perfect place to take time off and relax.

It's recently become a destination for international artists, who are inspired by the natural beauty of the local area and its traditions.

How easy is it to set up a business in Appenzell Ausserrhoden? What legal issues are there?

Once we receive the capital, it's possible to set up a company within a few days, although usually we need three to four weeks for third parties to become legally effective.

How is the economy looking in Appenzell Ausserrhoden and Switzerland in general?

In our canton and across Switzerland, most export-oriented companies are suffering because of weak global demand and a strong domestic currency. The first three months of 2012 have been difficult in comparison with the previous year, but most businesses expect things to stabilise in the next few months.

Thanks to the diversity of our economy, the recent influx of start-ups and a particularly low unemployment rate (1.6% in February 2012), the future of Appenzell Ausserrhoden is looking bright.

Karin Jung, head of the office for economics at Appenzell Ausserrhoden.