Debt collection in Switzerland

The Swiss economy is among the most advanced in the world but there is also an increase in the Insolvency of companies

The economy of Switzerland is one of the world’s most advanced and Switzerland is the 14th largest export economy in the world.

Based on estimates from the CIA’s World Factbook, Switzerland’s exported goods plus services represent 67.5% of total Swiss GDP.

The top export destinations of Switzerland are usuallyother European Countries (46.6%), while 35.6% of Swiss exports by value are sold to Asian importers. Switzerland ships another 14% to North America with 1.8% going to Latin America (excluding Mexico but including the Caribbean). Just 1.1% of the Swiss products are destined to Africa.

With reference to the major trade partners, exports dropped to the UK (-0.8%), Singapore (-23.5%), Canada (-20.3%) and Australia (-31.7%), but increased to China (0.2%), Japan (1.8%) and Hong Kong (11.1%); the EU (0.1%), mainly to Italy (8.3%), France (5.8 %), Germany (2.9 %) and, in the last place, the US (4.3%).

As regard the most exported products from Switzerland to the rest of the world, below there is a list that represents the highest dollar value in Swiss global shipments during the last year.

Therefore, the top exported Swiss products are:

1.     Precious metals$84.6 billion (28.2% of total exports)

2.     Pharmaceuticals$70.3billion (23.5%)

3.     Machineryincludingcomputers$23.7billion (7.9%)

4.     Clocks, watches including parts$20.2 billion (6.8%)

5.     Organicchemicals$19.8 billion (6.6%)

6.     Optical, technical, medical equiptment$16.1 billion (5.4%)

7.     Electrical machinery, equipment$12.2billion (4.1%)

8.     Plastics, plastic articles$5.1billion (1.7%)

9.     Perfumes, cosmetics$3.3billion (1.1%)

10. Articles of iron or steel: $3 billion (1%).

Among these products, perfumes and cosmetics increased at the fastest pace, up by 11.9% in value year over year. This upward trend was largely led by beauty and makeup preparations and skincare related (including sunscreen). In second place, for improving export sales up 5.5% were iron or steel articles and machinery including computers. Thirdly, pharmaceuticals recorded the fastest growth in value via a 4.2% improvement since 2016.

As we have already seen, Insolvency is a record in Europe; The economic and financial context of the recent years has seen a significant increase in the number of companies subject to insolvency proceedings. This phenomenon involves also Switzerland.

For this reason more and more often companies choose the extra-judicial procedure – which is faster and less expensive compare to the legal approach – to recover credits.

Therefore Swiss companies should take into consideration not only the export conditions in the different Countries of the EU (opportunity/risk Country) but they should also analyze the different justice systems (risk/opportunity Courts).

Efficient justice and economic growth, the length of the legal proceedings and the number of Judges per Court are representative criteria also for the purpose of the risk of recoveringtheir own credits.

Despite a reasonable certainty exists that, in a few months, a dispute can be solved in Countries such as Luxembourg, Finland, The Netherlands, Denmark, Germany and Sweden much harder can be recovering credits in southern Europe.

In Cyprus and Malta, for instance, in order to have a judgement it takes over a year. It would be better to avoid legal actions also in GreeceHungary and Slovakia because of the long lead times.

AND WHAT ABOUT ITALY?

According to Mr. Mombelli, expert of International Debt Recovery, the current situation in Italy is discouraging.

Mr. Mombelli: “Unfourtunately, the numbers makes us reflect on the negative performance of the Italian justice system“.

  • 391 Legal Advisers per 100.000 inhabitans
  • 11 Judges per 100.000 inhabitants
  • 527 days for a civil action.

Thus, Italy is the black sheep of Europe as for the legal system“!

Furthermore, in the last 2 years, 1/3 of the Italian companies didn’t undertake legal actions because of the costs and the long lead times, 16.2% expressed lack of confidence in the justice system and 15% were uncertain about the result.

Invenium, since the late ’90s, is one of the largest Italian company specialized in International Debt Recovery. Nowadays, it operates in more than 100 Countries and has a Network of 117 Law Firms and Local Associates.

With more than 3,000 customers in Europe, 10.000 cases and 73 million receivables managed in the last two years, Invenium is the right choice for any company seeking effective results.

Invenium‘s priority has been, for several years, to support the recovery of credits usually with an out-of-court approach. Especially, the amicable settlement allows to resolve, in short times, conflict situations between debtors and clients and also facilitate their business relationships.

For further information and to talk to one of our experts contact us.