Kraft Plans European HQ Move

08 January 2007

ZURICH: The world's second largest food and drinks firm, Kraft Foods, is moving its European headquarters to Switzerland, drawn by the fresh mountain air, the cuckoo clock timetabling of the nation's transport system and - possibly - lower rates of corporate tax.

Hundreds of staff from the present HQ in Vienna and the company's UK base in London will be transferred to new premises just outside Zurich, in a year-long phased move beginning this summer.

Kraft, whose brands include Ritz crackers and Philadelphia joins a long list of multinationals that have moved their European HQs to Switzerland - among them General Motors, Hewlett-Packard, Procter & Gamble and Pfizer.

According to a Kraft spokesman, the company had looked at a number of different locations but only Zurich ticked all the boxes.

"It's the ease of getting about: good transport to the airport, good rail links. We have a lot of expatriate staff so availability of schools and good quality accommodation are important."

Taxes, although not mentioned, will inevitably have held much sway over the decision. Each Swiss canton sets its own corporate tax, which is often lower than in many EU member states.

A survey by accountants KPMG in November 2006 said the average corporate tax rate in Switzerland - federal, cantonal and communal - stands at 21.3%.

This compares with 40.7% in Japan, 40% in the US, 38.3% in Germany, 12.5% in the Republic of Ireland and 10% in Cyprus. KPMG said the average across the EU was 25.8%.

Data sourced from The Times Online (UK); additional content by WARC staff