Swiss companies have once again increased their investments in their foreign subsidiaries, according to a recent analysis by the Swiss National Bank (SNB). This marks a significant shift from the previous three years, where companies had been withdrawing more funds from abroad than investing.
In 2023, Swiss companies invested CHF 49 billion in their foreign subsidiaries, compared to CHF 71 billion in 2022 and CHF 111 billion in 2021. This increase in investment activity was driven by companies in the industry and services sectors, which invested CHF 92 billion in their foreign subsidiaries.
Europe remained the top destination for Swiss investments, with CHF 59 billion flowing into the region. The United States and Asia also received significant investments, while Central and South America saw a decrease in investments from Swiss companies.
On the other hand, foreign investors continued to withdraw funds from Switzerland, although the outflow was slightly lower at CHF 49 billion compared to CHF 63 billion in 2022. Finance and holding companies were the main contributors to this trend, with outflows of CHF 40 billion. This has been a consistent trend since 2018, with a total outflow of CHF 560 billion in the past five years.
Despite the outflows, foreign direct investment in Switzerland amounted to CHF 930 billion in 2023, with equity capital accounting for 96% of this amount. The remaining 4% was in the form of corporate loans.
The Swiss companies surveyed by the SNB reported controlling around 21,200 subsidiaries abroad, employing over 2.5 million people. In Switzerland, these companies employed 556,000 people, a slight increase from the previous year. However, turnover decreased to CHF 869 billion from CHF 902 billion in 2022.
This increase in investments by Swiss companies in their foreign subsidiaries could have a positive impact on the global economy, as it indicates confidence in the growth potential of these markets. It also highlights the importance of foreign investments for Swiss companies, as they continue to expand their global presence.