Swiss Village Cuts Tax Rate to Attract More Hedge Funds from London
THE GUARDIAN: Pfäffikon is already one of the two headquarters of Man Group, the world's largest publicly traded hedge fund, and UBS recently built a base in the Alpine enclave

One-in-four hedge fund managers have moved from London to Switzerland. Photograph: The Guardian
A peaceful Swiss village that has become an unlikely rival to Mayfair is cutting its income tax rate to attract more hedge fund managers from London.

The Swiss area of Höfe in Schwyz, which includes the village of Pfäffikon, plans to cut its basic tax rate to 15% from 17% next year. It hopes to attract hedge funds that are angered by higher taxes in Britain and the public outcry against the banking industry.

Surrounded by hills and meadows, Pfäffikon is already one of the two headquarters of Man Group, the world's largest publicly traded hedge fund, otherwise based in London. The Swiss bank UBS has also recently built a base in the Alpine enclave, near Zurich.

"We know that many London-based funds are not happy with rising taxes in Britain, so this is a reminder that Switzerland and Pfäffikon are positioning themselves as a hedge fund hub," said Marcel Jouault, of the business promotion department at Pfäffikon. "Many office buildings will be completed in 2011 and 2012. Lowering taxes will attract more businesses."

The village, once mostly dependent on agriculture, has registered more than 300 businesses so far this year, including Avis Asset Management, Commodity Partners, Fargill Investments, Sussex Partners, Hadrian's Wall Capital, Highland Capital Management and Twelve Capital.

Support businesses such as bookshops, travel agencies and beauty centres have proliferated. The city is also building a centre to host smaller hedge funds. >>> Elena Moya | Monday, October 18, 2010