An investment agency in Switzerland is encouraging Indonesian companies to invest in the euro zone market despite the ongoing debt crisis.
Philippe Monnier, executive director of Economic Development Agency of Greater Geneva, said some Indonesian products had been sold in European markets, including Switzerland, through distributors or selling agents there.
“There are good number of Indonesian companies which should think more about opening companies in Europe,” Monnier said.
Rising economic growth in Indonesia should help those companies consider having a physical presence in Europe through Switzerland.
He said Switzerland would be a good place to start in Europe because it would give Indonesian companies access to the rest of the region.
Trading for commodities like oil or mineral, as well as financial-sector investments would be interesting for Indonesian companies that are looking to expand into Switzerland, he said.
Monnier said that despite salaries in Switzerland being 20 percent higher than those in Germany or France, the country’s lower social costs would balance the difference. He added that Germany and France required social costs to be at least 40 percent to 50 percent of the salary, while Switzerland only required 20 percent.
Switzerland also offers lower tax rates to multi-national companies and, in certain cases, up to a 10-year tax holiday. He said based on those advantages, about 90 percent of US companies working in Europe had their regional headquarters in Switzerland.
Monnier said there are only about five Indonesian companies operating in Switzerland. He did not have an exact investment figure because some of them were in joint-ventures or were made through affiliates companies that were not based in Indonesia.
He said the number of Indonesian companies would increase just as many Chinese companies were going global despite the large domestic market at home.
“Indonesia would be similar. There’s this drive to go beyond the borders, even when your own market is big,” Monnier said, adding that now was the time to enter Europe.
“It’s like stock. When everything is negative, people are pessimistic and the value is very low. When they are weak, it’s time to attack.”
He said because Switzerland was not part of the European Union, the debt crisis’s impact was limited. The region’s economic growth will remain low, though.
Despite economic growth in the next few years being at only about 0.5 percent to 1 percent, Monnier said he believed its future prospects remained bright.
“The market is bigger than in the US. Even if the growth is slower in two to three years, the market is still there,” he said.
Monnier also said he believed Switzerland’s investment into Indonesia would continue to grow as the country offered positive future prospects.
Switzerland’s “significant” investment in Indonesia includes household names like Nestle and investment banks such as Credit Suisse Group and UBS.