Revolution, Sonderbund and the Federal State (1798–1894) — conclusion

Conclusion of Chapter II

Between 1798 and 1894, the canton of Zug passed from the old order of town and Amt, subject territories and foreign pensions, to a modern representative democracy within a federal state. The transition came from outside. The revolution of 1798, the Act of Mediation of 1803 and the Sonderbund war of 1847 were imposed on the canton, which adapted each time without resistance, preserving what it could and accepting what it had to.

Three results of this period bear directly on the later business location. The first is the constitutional division of taxing powers established in 1848, which left direct taxation to the cantons and thus made cantonal tax competition possible. Rooted in the resistance of the central Swiss cantons to the centralised taxation of the Helvetic Republic, it has survived, with modifications, to the present day. The second is the unified legal and economic space created by the federal state, with its common market, single currency, freedom of establishment and federal courts, which allows companies and individuals to move between cantons without leaving the Swiss system. The third is the cantonal political system itself: a representative democracy with proportional representation and instruments of direct democracy, which fostered a consensual political culture and gave the canton's later fiscal strategy both stability and democratic legitimacy.

To these must be added the infrastructure that connected the canton with Zurich, Lucerne and the Gotthard. By the end of the nineteenth century, Zug was no longer an isolated rural canton. It was a small, well-connected part of a modern federal state, with the legal freedom to set its own taxes and the physical means to attract the people and enterprises that such a policy might draw. The industrial enterprises that settled in the canton in the same period, described in Chapter III, showed what that combination could produce.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.