Zug 2035 — a part of the book Zug: The Making of a Global Hub by Dr Alexander Ressos.
The preceding parts traced how a small agricultural canton in central Switzerland became one of the most concentrated international business locations in the world. Each part ended with the present. This final part looks ahead to the year 2035, a horizon close enough to be shaped by decisions taken today and distant enough for the forces now at work to have changed the canton. It does not attempt a forecast, since the history of Zug is full of developments that no one predicted: the arrival of Marc Rich, the rise of Crypto Valley, the Russian sanctions of 2022. What the part offers is an analysis of the forces that will shape the canton's future, a set of scenarios that describe the range of possible outcomes and a discussion of the options available to the canton, its companies and their advisers. Chapter I examines the forces of change, Chapter II sets out four scenarios for 2035 and Chapter III discusses the policy options and draws the conclusions of the book.
This part belongs to Zug: The Making of a Global Hub by Dr Alexander Ressos, published here in full, section by section.
The Forces of Change — conclusion
The forces that will shape Zug until 2035 are already visible. The global minimum tax has ended the era in which low tax rates alone decided the location of multinational groups, while it has given… Read more Zug · Zug 2035The end of tax competition as Zug knew it
For seventy years, low taxes were the foundation of Zug's business model. The canton attracted holding companies, domiciliary companies, commodity traders and crypto foundations with tax rates well… Read more Zug · Zug 2035The canton's windfall and its uses
The minimum tax has had a paradoxical effect on the canton's finances. Since large groups in Zug now pay more tax, the canton receives substantial additional revenue. Read more Zug · Zug 2035Fiscal equalisation and national solidarity
The Swiss system of fiscal equalisation redistributes resources from the financially strong cantons to the financially weak ones. Read more Zug · Zug 2035Geopolitics and the fragmentation of trade
The international environment has become more hostile to open trade. The war in Ukraine, the rivalry between the United States and China, the use of sanctions and tariffs as instruments of foreign… Read more Zug · Zug 2035The energy transition and critical minerals
The energy transition will reshape the commodity trade. The demand for oil and coal is expected to decline over the coming decades, while the demand for copper, nickel, cobalt, lithium and other… Read more Zug · Zug 2035Technology: artificial intelligence and tokenisation
Technological change will affect all the sectors of Zug's economy. Artificial intelligence is transforming the analysis of markets, the management of risks and the processing of documents in trading,… Read more Zug · Zug 2035Life sciences and technology companies
Zug has developed a significant life sciences and technology sector alongside its trading, holding and crypto clusters. Read more Zug · Zug 2035Demography, space and infrastructure
The canton of Zug is small. Its territory of 239 square kilometres includes lakes, mountains, forests and farmland, and only a limited area is available for building. Read more Zug · Zug 2035The relationship with the European Union
Switzerland's relationship with the European Union frames the environment for all the companies of Zug. Read more Zug · Zug 2035Reputation and legitimacy
Zug's business model depends on the acceptance of its companies by the societies in which they operate and by the Swiss public. That acceptance has been challenged repeatedly. Read more Zug · Zug 2035Taxes on wealth and inheritance
The taxation of wealthy individuals has returned to the political agenda. Switzerland is one of the few developed countries that levies a tax on net wealth. Read more Zug · Zug 2035The United States and Switzerland
The United States is Switzerland's most important trading partner after the European Union and its most important partner in financial services. Many of the multinational groups in Zug are American. Read more Zug · Zug 2035Banking consolidation after Credit Suisse
The collapse of Credit Suisse in March 2023 and its takeover by UBS changed the Swiss banking landscape. Read more Zug · Zug 2035The Swiss franc and the cost base
The strength of the Swiss franc is a permanent feature of the Swiss economy. Having appreciated against the euro and the dollar over the decades, the franc serves as a safe haven in times of crisis. Read more Zug · Zug 2035Climate and the environment
Climate change affects the canton directly and indirectly. The lakes of Zug and Ägeri are warming, the snowfall on the mountains is declining and heat waves are becoming more frequent. Read more Zug · Zug 2035Security and cyber risks
The concentration of valuable companies and wealthy individuals in a small canton creates security risks. Cyber attacks against Swiss companies and authorities have increased in recent years. Read more Zug · Zug 2035The shift in Swiss domestic politics
Swiss domestic politics has shifted in ways that affect the canton's future. The Swiss People's Party, which opposes closer ties with the European Union and favours restrictions on immigration, has… Read more Zug · Zug 2035Artificial intelligence, data and energy demand
Artificial intelligence brings a further, less visible pressure: the demand for data centres and electricity. Read more Zug · Zug 2035Practitioner's note: monitoring the forces of change
Advisers who help clients plan their presence in Zug over a horizon of ten years should monitor the forces described in this chapter systematically. Read more Zug · Zug 2035Four Scenarios for 2035 — conclusion
Four scenarios describe the range of possible futures for Zug in 2035. In the adaptive hub, an open world and continued domestic support allow the canton to evolve from a tax-driven to a… Read more Zug · Zug 2035Why scenarios
Forecasts of economic development over a decade are rarely accurate, as the history of Zug shows. Read more Zug · Zug 2035Scenario 1: The adaptive hub
In the first scenario, the world economy remains broadly open despite tensions, while Swiss voters and the canton's residents continue to support an internationally oriented model. Read more Zug · Zug 2035Scenario 2: The fortress
In the second scenario, the world economy fragments into blocs, but Switzerland and the canton remain open to international business. Read more Zug · Zug 2035Scenario 3: The retreat
In the third scenario, the world economy remains broadly open, but Swiss voters and the canton's residents turn against the internationally oriented model. Read more Zug · Zug 2035Scenario 4: The squeeze
In the fourth scenario, the world economy fragments and Swiss politics turns inward at the same time. Read more Zug · Zug 2035A day in 2035: four vignettes
The scenarios can be made more concrete by imagining a day in the life of the canton in each of them. Read more Zug · Zug 2035Wild cards
Beyond the four scenarios, several events of low probability but high impact, sometimes called wild cards, could change the canton's path. Read more Zug · Zug 2035Probabilities and judgement
Scenario planning does not assign probabilities to scenarios, since its purpose is preparation for several futures. Readers will nonetheless form their own judgements. Read more Zug · Zug 2035What the scenarios mean for residents
The scenarios have different consequences for the different groups of residents. For the international community, the adaptive hub and the fortress offer continued opportunities, while the retreat… Read more Zug · Zug 2035The scenarios in figures
The scenarios can be summarised by illustrative ranges for a few key figures in 2035, which indicate the order of magnitude of the differences between the scenarios. Read more Zug · Zug 2035Scenarios for the commodity traders
The commodity traders deserve a closer look, since they are the most distinctive and the most exposed sector of the canton. Read more Zug · Zug 2035Scenarios for Crypto Valley
The crypto industry faces its own set of possibilities. In the adaptive hub, Crypto Valley becomes a centre of regulated digital asset infrastructure, working closely with Swiss banks and the SIX… Read more Zug · Zug 2035Scenarios for the legal and fiduciary professions
The professional services of Zug, including law firms, fiduciaries, auditors and tax advisers, depend on the international companies and wealthy residents they serve. Read more Zug · Zug 2035Milestones to 2035
Several dated milestones will show which path the canton is taking. The following list is indicative, since the dates of votes and legislative steps are uncertain and may change. Read more Zug · Zug 2035Scenarios for wealthy residents and family offices
The wealthy residents of Zug, whom Part F described, react to the scenarios in their own way. Read more Zug · Zug 2035Indicators to watch
The scenarios suggest a set of indicators that decision-makers can monitor to see which path the canton is taking. Read more Zug · Zug 2035The scenarios and the sectors of Zug
The four scenarios affect the sectors of Zug differently. The commodity traders, the most mobile sector and the most exposed to geopolitics, prosper in the fortress but suffer in the squeeze and the… Read more Zug · Zug 2035A Geneva comparison
The Geneva book in this series also closes with a look ahead. Although Geneva faces some of the same forces, among them the minimum tax, geopolitical fragmentation, the energy transition and the… Read more Zug · Zug 2035Practitioner's note: stress-testing a location decision
Advisers can use the scenarios to stress-test the location decisions of their clients. Read more Zug · Zug 2035Options, Recommendations and Conclusions — conclusion
The canton of Zug has considerable room for manoeuvre in the fields within its control: taxes, housing, infrastructure, education, the administration and courts, integration and culture. Read more Zug · Zug 2035The canton's room for manoeuvre
The canton of Zug controls only some of the forces that will shape its future. International tax rules, sanctions, tariffs, the relationship with the European Union and immigration policy are decided… Read more Zug · Zug 2035Tax strategy after the minimum tax
The minimum tax requires the canton to rethink its tax strategy. For large groups, the effective rate is now fixed at 15 per cent, so that the canton cannot compete by lowering it further. Read more Zug · Zug 2035Housing and space
The shortage of affordable housing is the most pressing domestic problem of the canton and the most likely source of political resistance to its economic model. Read more Zug · Zug 2035Infrastructure and mobility
The canton's transport infrastructure is under strain. The rail connections to Zurich and Lucerne, the motorways and the local roads carry growing traffic. Read more Zug · Zug 2035Education, research and talent
The canton's future depends on its ability to attract and develop talent. It can act in several ways. Read more Zug · Zug 2035English in the institutions
Part J discussed the options for integrating English into the canton's institutions. Read more Zug · Zug 2035Reputation and responsible business
The canton's reputation depends on the conduct of its companies. The canton cannot control that conduct directly, since the regulation of companies and markets is largely federal. Read more Zug · Zug 2035The crypto cluster
Part G and Part H described the development of Crypto Valley and its regulatory framework. Read more Zug · Zug 2035Integration and political participation
The separation between the international community and the local political community, which Part J described, is a long-term risk for the canton. Read more Zug · Zug 2035Fiscal equalisation: a strategy for the canton
The canton's contributions to fiscal equalisation will rise with its revenues from the minimum tax. Read more Zug · Zug 2035Regional cooperation
Zug is part of a larger economic region centred on Zurich and extending to Lucerne, Schwyz and Aargau. Many of its employees live in these cantons, while many of its residents work in Zurich. Read more Zug · Zug 2035Lessons from other small hubs
Other small jurisdictions that have become international business hubs offer lessons for Zug. Read more Zug · Zug 2035A fund for future generations
The canton's surpluses raise the question of how to use them over the long term. The canton has used them for current measures, such as the reduction of health insurance premiums, and for investments… Read more Zug · Zug 2035A note on method and sources
The chapters of this part differ from those of the preceding parts in their method. Read more Zug · Zug 2035The canton's strengths for the decade ahead
The analysis of this book suggests that Zug enters the decade to 2035 with considerable strengths. Read more Zug · Zug 2035The canton's vulnerabilities
The canton's vulnerabilities are equally clear. Its economy depends heavily on a small number of large companies, whose decisions can change its tax revenues and employment within a few years. Read more Zug · Zug 2035Recommendations for companies and advisers
For companies considering a presence in Zug, and for their advisers, the analysis of this book suggests several recommendations. Read more Zug · Zug 2035What advisers should tell their clients now
Advisers who work with clients in Zug face the task of translating the analysis of this book into practical advice. Several messages stand out. Read more Zug · Zug 2035The role of the advisers in the canton's future
The legal, tax and fiduciary professions have shaped the history of Zug as much as its politicians and entrepreneurs. Read more Zug · Zug 2035Practitioner's checklist: a Zug presence for 2035
● * Substance. * Define the functions that the company will perform in Zug, the people who will perform them and the decisions that will be taken there. Read more Zug · Zug 2035Epilogue: The making of a global hub
This book began with a small canton of farmers, fishermen and mercenaries on the shores of a lake in central Switzerland. Read more