Why should Indian companies consider the Basel Area?
Europe is the second biggest market for innovative drugs in the world and hence provides great commercial potential not only for biopharma companies but also CDMOs and service providers. Furthermore, it’s an ideal place for innovation. According to Mc Kinsey, 43 out of the top 100 life science universities are located in Europe, which is more than in the US where you find 34 life sciences universities. The Basel Area is the prime life science hub in Europe with renowned universities and research institutes. Everybody knows Roche and Novartis in Basel, but there are more than 700 life sciences companies here employing a huge life sciences workforce with top global talent across the value chain – from basic research to commercialisation. They all benefit from one of the most liberal labour laws in Europe.
What is so unique about the Basel Area?
Nestled right at the border of France and Germany, and with the Rhine River passing through, the Basel Area has always been the major economic hub of Switzerland. The region has been an important centre for trade since the Middle Ages, and to this day it remains a major centre for science and research. Albeit quite small, the Basel Area is responsible for 30 per cent of all Swiss exports, with the pharma and chemical industry contributing enormously to this result. Multinational corporations like Roche, Novartis, Actelion, Syngenta, as well as European hubs of international companies like Roivant, Moderna or Hengrui play an active part in the vibrant life sciences ecosystem. In fact, many Indian companies have also set up operations in Basel, like Dr Reddy’s, Divis Laboratories, Dishman Carbogen Amcis Group, Biocon, Jupiter Bioscience, Bilcare Research, Naari, and many biotech startups.
How did the region cope during the COVID-19 pandemic?
Despite the COVID-19 pandemic, the year 2020 was very successful for the companies in the region. In the Global Innovation Index, Switzerland claimed the top spot in 2020 for the tenth year in a row, and biotech companies from the Basel Area had a major stake in this success. According to the Swiss Biotech Report 2021, investment in Swiss biotech companies almost tripled compared to the previous year. It amounted to 3.44 billion Swiss francs. Investment in research and development alone rose by 10 per cent to 2.2 billion francs. Research carried out by the country’s biotech firms led to an eight per cent increase in jobs. Moreover, some of these biotech companies were involved in a series of mergers and acquisitions. The region proved to be attractive for companies from abroad despite the pandemic. One of the companies that opened a subsidiary in the Basel Area last year was the biotech company Moderna.
Amongst other factors, having a competitive corporate tax is one of the key aspects of site selection. How does Basel fare with respect to its other European counterparts?
You are right, corporate tax is an important factor. The Basel Area offers one of the most attractive tax rates in Switzerland. The overall effective corporate tax rate, including federal tax, is approximately 13 per cent and can be reduced to 11 per cent under certain circumstances. Further, new companies can benefit from a tax holiday of up to ten years, with no risk of clawback. But in our experience, companies don’t settle in the Basel Area for competitive tax rates alone. What they also get is an immediate connection to a specialized industry ecosystem. They find that it is quite simple to set up a company in Switzerland and it is possible to get funding. Companies and their employees from abroad appreciate the well-maintained infrastructure, be it for logistics or for travelling. Expats like it here: their children get an excellent education, healthcare is accessible for everyone and the country is safe.
Then there is the innovation factor: if we compare the innovation strength of life sciences clusters by the share of therapeutic companies, we find that the Basel Area is much above other European regions. There are more than 31’600 life sciences talents in the Basel Area, which is more than in Paris, Munich or London. That means companies have options when recruiting. But they also have options when it comes to real estate. Our Switzerland Innovation Park Basel Area and the Technologiepark, for instance, combine many advantages: They offer academic, seed-stage and spin-out R&D groups access to an independent biomedicine and biotechnology research environment where you meet peers and become part of a great community.
Sounds like a good place to be for young companies.
Absolutely, but the key is the proximity between newcomers and established companies. In 2020, we opened an innovation park at the Novartis Campus that is a magnet to companies from the fields of digital health and personalised medicine. The proximity to the researchers from Novartis enables new forms of exchange, collaboration and innovation. The concept is clearly working because all places in the innovation park were occupied within just four months of opening.
Currently, we are constructing a new building that will be home to innovative startups and established biopharma and medtech companies. The Switzerland Innovation Park Basel Area Main Campus will dedicate 50’000 square meters to innovation, and we are looking forward to opening it next year.
What is your advice for companies that are considering to expand their business to Europe?
A settlement abroad needs thorough consideration and evaluation – the company and people depend on that decision, so you need to make sure your conclusion is rock solid. You need current data on the market conditions and the business environment. You need to know the competition. Legal issues are something that you cannot cover with an online search as the circumstances are so different from company to company, so make sure you have some specialists who are familiar with the national and local laws. Further, it always pays off to visit a place you are evaluating in person. Not only do you get a feel of the place and real estate, but you can also use the opportunity to meet experts and make connections to local authorities. These connections are an important asset when you decide to set up your operation. Once you have settled, become an active part of your new ecosystem. Join events to meet like-minded people – it really helps you to find collaboration partners and grow your business. We at Basel Area are happy to support you on this journey – free of charge.
|
Anke Hollnagel is part of the International Markets & Business Affairs team with Basel Area Business & Innovation, northwestern Switzerland’s initiative for innovation and economic promotion. The organization supports international companies that want to grow their business by expanding to Europe during each stage of their expansion process. All services are free of charge. |
(To learn more about expanding a business in Europe, visit baselarea.swiss and sign up for our newsletter: baselarea.swiss/newsletter-signup
The office of Basel Area Business & Innovation in India is located in Bangalore city. To contact us, please write to india.office@baselarea.swiss or call at +91 91671 41083.
Get in touch with Anke Hollnagel at anke.hollnagel@baselarea.swiss or on her mobile: +41 79 318 9232.)