Switzerland Grows Into Global Commodities Hub

Switzerland has become a hub for the commodities industry. With the banking industry’s reputation in decline, the Swiss have sought new sources of revenue. “In Switzerland, companies encounter optimal tax conditions, sympathetic officials and an army of lawyers and bankers who specialize in the needs of the deep-pocketed industry,” report Alexander Jung and Anne Seith for Spiegel Online. “Companies like Glencore now process 15 to 25 percent of the global trade in ore, copper, oil and agricultural products from their headquarters in Switzerland.” Geneva has replaced London as the leading hub for trade in crude oil. Swiss tax laws favor commodities producers and traders that oversee global operations, far removed from horrendous conditions in the Congo, Central Asia and other developing economies that produce the commodities. “Most commodities traders in Switzerland call themselves ‘mixed companies,’ which do more than 80 percent of their actual business abroad and, as a result, only pay taxes on a portion of profits,” the article explains. As the European Union struggles with debt crisis, critics oppose such tax rules and call for more regulation. – YaleGlobal