Schweizerische Nationalbank : Direct Investment, 2021 edition

Zurich, 16 December 2022

Press release

the liquidation of non-resident subsidiaries led to substantial reductions in equity capital. In the services sector, withdrawals also exceeded investment outside the finance and holding companies category, in particular in the transportation and communications category (CHF 17 billion) and in banks (CHF 9 billion). Unlike the services sector, manufacturing increased its net foreign investment (CHF 18 billion). This rise was chiefly attributable to the chemicals and plastics category.

The withdrawals primarily affected holding company locations in Europe. Disinvestment by resident companies at their subsidiaries in Cyprus, Ireland and Luxembourg totalled CHF 149 billion. In 2021, investment by Swiss-domiciled entities exceeded disinvestment in only a few European countries: mainly Russia (CHF 5 billion) and Germany (CHF 4 billion). Regions outside Europe largely recorded a net inflow of Swiss direct investment. Resident entities invested primarily in Asia (CHF 14 billion), followed by Central and South America (CHF 11 billion) and the US (CHF 7 billion).

At the end of 2021, direct investment stocks abroad amounted to CHF 1,406 billion. Of this total, CHF 1,313 billion was equity capital (93%) and CHF 94 billion (7%) was intragroup loans. At CHF 502 billion (36% of the total), by far the largest capital stocks continued to be reported by finance and holding companies, this despite the disinvestment of recent years. They were followed by companies in the chemicals and plastics category at CHF 213 billion (15%).

Income from direct investment abroad recovered from the downturn caused by the coronavirus pandemic and increased year-on-year by CHF 26 billion to CHF 99 billion (up 35%). Higher income was recorded by subsidiaries in both the services sector (up CHF 20 billion to CHF 58 billion) and the manufacturing sector (up CHF 5 billion to CHF 41 billion).

Foreign direct investment in Switzerland

In 2021, non-resident investors again effected substantial withdrawals from resident companies. The net disinvestment amounted to CHF 143 billion (2020: CHF 151 billion). The withdrawals were primarily in the finance and holding companies category (CHF 153 billion). Foreign-controlled groups streamlined their corporate structures, thereby continuing the balance sheet reductions observed in this category since 2018. By contrast, non-resident investors expanded their net investments outside the finance and holding companies category: inward investment amounted to CHF 6 billion in the services sector, primarily in the trade category, and to CHF 4 billion in the manufacturing sector.

Stocks of foreign direct investment in Switzerland amounted to CHF 1,064 billion. Of this total, CHF 984 billion (93%) was equity capital and CHF 80 billion (7%) was intragroup loans.

Income from direct investment in Switzerland increased year-on-year by CHF 13 billion to CHF 86 billion (up 18%), but remained below its pre-pandemic level. Direct investment income from subsidiaries in the services sector rose by CHF 13 billion to CHF 72 billion,

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Zurich, 16 December 2022

Press release

while in manufacturing, at CHF 15 billion, it remained virtually on a par with the previous year.

Operational data on multinational enterprises

In 2021, the Swiss-controlled companies surveyed by the SNB controlled 19,100 non-resident subsidiaries, where they employed 2,140,000 people and generated annual turnover of

CHF 796 billion. This corresponds to an increase in turnover of 14% compared to the previous year, when the non-resident subsidiaries suffered heavy losses in turnover owing to the coronavirus pandemic. In comparison with 2019, the year before the coronavirus crisis, turnover in 2021 increased by 6%. The number of employees abroad rose by 3% (up 2% compared with 2019). The Swiss-controlled companies surveyed by the SNB that have participations in non-resident enterprises are also significant employers in Switzerland, where they employed 538,000 people.

Remarks

Comprehensive tables on direct investment and operational data on multinational enterprises are available on the SNB's data portal (data.snb.ch) under 'Table selection/International economic affairs' and also 'Datasets/Supplementary data on international economic affairs'. The data can be accessed in the form of charts and configurable tables. The data portal also has information on the methods used in direct investment statistics, under 'International economic affairs/Notes'.

As is customary, the Direct Investment 2021 report includes a revision of past years' figures, in this case for the period 2015 - 2020. The revisions from 2015 to 2016 mainly concerned the breakdown by industry category and SPEs; values for the latter have been adjusted in line with the new IMF definition. The revisions since 2017 affect all direct investment components in both directions as well as the operational data on non-resident subsidiaries.

The staff numbers at resident parent companies are published by the Swiss Federal Statistical Office (SFSO) as part of their enterprise groups statistics (STAGRE). The SNB publishes the staff numbers of those resident parent companies that are included in its surveys.

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Zurich, 16 December 2022

Press release

DIRECT INVESTMENT 2021: OVERVIEW

Swiss direct investment abroad

1 Only includes companies covered by the direct investment statistics. Source(s): SNB

The report is available from 16 December 2022 on the SNB website at www.snb.ch, Statistics/Reports and press releases. The printed version may be obtained from the SNB from 21 December 2022.

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