10 measures for turning Switzerland into a start-up nation

Switzerland is the most innovative country in the world. However the framework conditions for start-ups are far from being perfect. Most people in the Swiss start-ups scene are aware of this fact and a survey among start-up founders done by Bilan and Le Reseau confirms this impression. According to the survey nearly 40% of respondents would select another country for starting their company if they had the chance to restart from scratch. The survey can be downloaded from the website of Le Reseau.

Based on the survey and on input from additional persons Bilan and Le Reseau has published the “Start-up Manifesto”. The manifesto has now been translated to German and English and can be signed online. Several hundred entrepreneurs and supporters have already signed.

The ten measures are:

1. TAX EXEMPTION OF PRIVATE INVESTMENTS INTO START-UPS
A maximum amount invested in a start-up company deducted from the income and/or wealth tax at the time of the investment. This amount would only be taxed when the investment is recovered.

2. ARRANGE THE TAX SYSTEM TO SUPPORT START-UPS
Implement tax measures to support investment into businesses’ research and development and reduce tax liabilities on incomes stemming from intellectual property rights.

3. IMPROVE THE EMPLOYEE-PARTICIPATION SCHEMES
Since 2010, employees’ options are no longer taxed at the time of grant but when the employee acquires shares following the exercise of options. The situation for non-profitable start-ups is very different as it is difficult to estimate the tax on a « virtual » revenue. Therefore, taxation should happen only when the shares are sold.

4. CREATE A VENTURE CAPITAL FUND OF HEDGE FUNDS
Fuelled voluntarily by pension funds and under the Swiss Confederation supervision, this fund specifically focuses on increasing the number of professional investors in Switzerland (limited partnerships, corporate funds) financing the innovative sectors.

5. CREATE A SECOND MARKET IN SWITZERLAND
The lack of Swiss innovative company IPOs has a negative impact on their valuation and on the whole ecosystem. It is therefore a must to lower the stock entry level or to implement a dedicated stock market segment.

6. FACILITATE THE DEVELOPMENT OF A COLLABORATIVE ECONOMY
Crowd funding and sharing economy should be fostered by a supportive legislation in Switzerland to avoid the risk that these sectors will develop elsewhere.

7. IMPLEMENT A « START-UP VISA »
Ease the immigration of VC’s, founders and key employees with an attractive work permit, easily transmissible outside of Switzerland.

8. SWISS SMALL BUSINESS ACT
Implement measures to facilitate the integration of start-ups in call for tenders issued by public authorities and large enterprises in order to help them acquire references.

9. REFORM THE CTI
As the Confederation main supporting tool for innovative SMEs, The Commission for Technology and Innovation needs a simplified administration and an extension of its activities to start-ups not stemming from academic institutions.

10. A SWISS DARPA
Similar to the US army, the Swiss army could put in place an R&D funding agency likely to invest – including in the form of challenges – in long-term, strategic projects capable of generating disruptive technologies.