Switzerland is attractive to foreign firms, thanks to its proximity to markets, great infrastructure and favourable tax regime, but the appreciation of the Swiss franc, major cantonal tax changes and uncertainty about the relationship between Switzerland and the EU – which has deteriorated since 2014’s vote against mass immigration – are all challenging investors, according to experts. “The Swiss franc thing will probably calm down, the tax change will probably be handled quite pragmatically, but the big unknown is the migration vote and how relations with the EU will be managed,” said Simon J Evenett, academic director at the University of St Gallen, Switzerland.

Companies already in Switzerland with no intention of expanding may not feel threatened by the migration vote. However, there are fears that it could affect firms that are thinking of expanding or need to renew visas on a regular basis, and there are also concerns that the EU might try to retaliate.

Mr Evenett has carried out research into the returns on assets (ROA) achieved by US multinationals investing in Europe. It reveals that away from the periphery of Europe, US firms earn the highest average ROA in Switzerland, with Austria and the Netherlands close behind.

Using US Bureau of Economic Analysis (BEA) data on majority-owned foreign affiliates of US multinationals operating in Switzerland between 2009 and 2013, he has calculated the cost and revenue shocks necessary to tip the balance in favour of investing in alternative European locations. Mr Evenett estimates that for Switzerland’s ROA to fall to the level of Austria's, total costs would need to rise by 7.2%. To match Germany's ROA, they would have to increase by 24.09% and to match France's and Italy's, they would have to rise by 23.04% and 23.15%, respectively.

“This means that Switzerland only needs to look over its shoulder to the Netherlands and Austria, because the revenue shocks needed to be equal to its big neighbours are implausibly large," he said.

Mr Evenett is optimistic about Switzerland’s prospects: “First, there’s quite a big cushion that has to be eaten into before US investors leave. Second, not every investor is going to be disrupted by bad relations with the EU. Third, the Swiss population might well vote to get rid of these migration restrictions anyway. And fourth, if things go badly, the Swiss government has options to bolster the returns of foreign investors by deregulating and improving the infrastructure even more.”