About St. Gallen, Switzerland – The City of a Thousand Steps.
St Gallen is the capital city of the canton of St Gallen in northeastern Switzerland, some 80 kilometers west of Zürich. Situated between Lake Constance and the Appenzell Alps, the city is located near Austria, Germany, and Liechtenstein.
Covering a total area of 39.41 square kilometers, St Gallen had an estimated population in 2018 of 75,833 and a density of 1,900/km2 (5,000/sq mi). In terms of population, it is Switzerland’s seventh-largest city. The more significant agglomeration is estimated to contain a population of around 200,000. The official language of St Gallen is Swiss German, but due to its highly cosmopolitan composition, Italian, French, and English are also widely spoken.
Nicknamed “the city of a thousand steps,” St Gallen was founded in the 7th century and has a long and rich history, evolving from what once was a humble hermitage into now what is considered the economic hub of Eastern Switzerland.
The canton of St Gallen consists of eight constituencies and enjoys the permanent constitutional status and, compared to other countries, a high degree of independence. Since 2006, the current mayor is Thomas Scheitlin.
The currency of St Gallen is the Swiss Franc (CHF), which comprises 100 Cents.
The economy of St Gallen
St Gallen enjoys a flourishing economy and is regarded as Switzerland’s sixth largest economic region and one of the most productive areas in Europe.
The economy of St Gallen is shaped by its small and medium-sized enterprises. The majority of the city’s businesses are in the services sector, primarily falling into Finance, Science & Technology, Information & Communication, Social, Education and Automotive categories.
Primary non-service industries include engineering, paper, printing, glassware, and textiles. The city’s famed textile industry dates back to the 15th century and once produced much of the world’s linen and embroidered fabrics. Today the industry has been highly mechanized and, although smaller, still provides plenty of fine textiles for Haute fashion.
Agriculture also forms a small but dynamic sector producing dairy products, wheat, fruit, oils, and sugar beet.
Several prestigious financial, information technology, and consultancy businesses are located in the region. Big names include Pricewaterhouse Coopers, Ernst & Young, Credit Suisse, UBS, Abacus Research, and Umantis.
Due to its significant number of attractions (including a stunning UNESCO World Heritage-listed Cathedral) and its proximity to Lake Constance and the Alps.
St Gallen’s Infrastructure
St Gallen’s location makes it an important trade route, and it has a well-developed infrastructure to meet domestic and international demand. The region’s extensive road network links St Gallen with all major Swiss cities and neighboring countries. The A1 motorway is one of the most important Switzerland and runs through St Gallen to Geneva in the South West.
Trains are operated by the Swiss Federal Railways and offer intercity and international transport. St Gallen also acts as a hub for many private railways such as the Südostbahn and Appenzeller Bahnen that connects the city to Lucerne, Appenzell, and Trogen.
St Gallen’s other primary transport system includes an S-Bahn, trams, and buses. Operating for several years, the dense bus network is operated by VBSG and provides frequent and reliable transport in and around the city center. A Post auto (post bus) is also available.
Founded in 2001, the S-Bahn has over eight routes and numerous station stops. The network is currently undergoing an extension program due for completion in 2013 to introduce new lines.
St Gallen-Alterhein Airport is the city’s largest airport, close to the main center. The airport offers daily flights to Vienna, where connections to most other major International destinations can be caught.
The workforce in St Gallen
Government statistics estimated the canton of St Gallen’s labor force at over 230,000. The majority of the workers are employed in the services sector, followed by industry and agriculture.
The labor force is predominantly Swiss, although over a quarter of foreign nationals including Italians, Germans, Ex-Yugoslavians, Austrians, and Turks. German is the most widely spoken language (83%), followed by 4% Italian and Serbo-Croatian 4%.
St Gallen enjoys a highly skilled and educated workforce resulting from a well-developed education system with an outstanding national and international reputation. The city has over 90 public education facilities ranging from kindergartens to secondary schools. In the private sector, the city is home to the elite international boarding school Institut auf dem Rosenburg, which attracts students worldwide.
The city also has a long tradition as a university town, home to many institutes and technical schools. There are three universities of applied sciences (Buchs, Rapperswil, and St Gallen) that specialize in transferring knowledge into the global business market.
Notably, the city hosts significant conferences such as St Gallen Symposium and Nano Europe, where leading business players meet to discuss business, politics, and industry developments.
In 2020, the unemployment rate for St. Gallen was 2.5 %. Though St. Gallen’s unemployment rate fluctuated substantially in recent years, it tended to decrease through the 2011 – 2020 period ending at 2.5 % in 2020. Source: Knoema
Business Costs in St Gallen
Persons living in Switzerland are subject to federal taxes, but cantons also have tax jurisdiction over residents and levies from income and capital taxes or minimum taxes on real estate.
There is significant variation between Swiss cantons and communes, but St Gallen is known for its moderate rates and often works hard to accommodate foreign investors.
Switzerland’s individual net income tax rates work 8.5%, increasing to between 13% and 22% depending on the cantonal tax.
The Swiss government’s standard corporate tax rate is 21.17%, making it attractive for companies and investors.
The standard VAT rate in Switzerland is 7.7% (8% as of January 2022). Certain goods and services are subject to a reduced rate of 2.4%, while other sectors such as Banking are exempt.
The cost of renting high-end office space in St Gallen is on average significantly lower than in Lucerne, Basel, Zurich, and Geneva.