Fribourg: the rural offshore location

As a legacy of an aggressive tax policy, this agricultural canton has a significant share of shell companies. According to our estimates, there are some 3000 of these companies, accounting for 13.24% of the local economy, mainly domiciled with lawyers, notaries or fiduciaries along the Boulevard de Pérolles.
The ten locations with the most companies in the canton of Fribourg

“Shell companies: Fribourg hides its face” was the headline in 1988 from the correspondent for the ATS news agency. With words of warning from the author, readers followed a brief history of the major dates which led the canton to exempt from taxation holding companies, domiciled companies and branches of international companies, along with a commendable exercise in transparency and justification from the local authorities.

At the time, the Cantonal Tax Service estimated the number of shell companies at between 1500 and 1600, without being able to quantify their tax “revenues” – or even the jobs created. The cantonal director of finance had already referred to the lack of tax harmonisation and the risk of relocations to advocate their passive attitude to this: 

“Fribourg cannot commit hara-kiri alone and remain the only ‘goody two-shoes’”.

Dormant companies

Under pressure from the OECD, Switzerland finally abolished the status of “domiciled company” on 1 January 2020. But shell companies and holdings still exist in the last villas overlooking the boulevard de Pérolles or in the rows of mailboxes. They are to be found in lawyers, notary or fiduciary offices, which provide a legitimate front for them.

For example, the company Vicpart Holding had decided to establish itself at 18 rue Saint-Pierre in 1999, domiciled with a fiduciary office, which also served as its auditor. There wasn’t any sign of an office or employees. The company hadn’t even bothered to put a plaque with its name on it among an already well-stocked row of them. Vicpart Holding seemed to exist only through the local commercial register, but it still became the owner in October 2009 of 96.82% of the shares in the Belarusian bank JSC Credexbank. In other words, after 10 years of doing nothing.

The US Justice Department (US_DOJ) then suspected the Fribourg company of laundering Russian money on behalf of Credex. In early 2010, it transferred USD 1 billion to companies domiciled in several countries, while its share capital amounted to some USD 10 million at the time, according to a report by FinCEN, the US Financial Crimes Enforcement Network. The company changed auditor several times, an issue that the press got hold of. In the wake of this case, the holding company was placed in liquidation and finally delisted in March 2014. As for the fiduciary office that had provided a domicile to Vicpart Holding, it has changed its name and address several times, but is still currently operating in Fribourg.

Offshore to Marly

Fribourg was also entitled to a separate chapter in the Panama Papers. The metadata made public by the International Consortium of Investigative Journalists (ICIJ) reported a trust office cited 176 times in connection with offshore structures established in tax havens located in the Caribbean or Indian Ocean. As was revealed by a participatory study performed last June with the support of Public Eye volunteers, most of the 1277 Swiss intermediaries are, five years after the Panama Papers scandal, still actively involved in corporate engineering. The “survival” rate among fiduciary offices is 73%, rising to 78% among lawyers. Nothing seems to stop this craze for providing domicile or result in any intermediary going to prison.

Sometimes even holding companies stand on their own two feet. After becoming established in Zug, SBM Offshore, which fled the aggressive taxation system operating at the time in the Netherlands, ended up settling in 1969 in... Marly, almost four kilometres from Fribourg.

The Dutch group, which specialises in oil and gas extraction infrastructure, has certainly ended up with a proper financial department, employing up to 50 people. But it also presents a particularly complex organisational structure, with up to 24 different companies domiciled at 5 avenue de Fribourg, and a holding company SBM Offshore Holding SA, which is only three years old. It was also from Marly that SBM Offshore routed, between 2007 and 2011, part of the hidden commissions paid to civil servants in order to obtain favourable contracts in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq. The group was fined USD 238 million by the Dutch justice (2014) and 238 million US courts (2017), and had to pay 148 million in compensation to the Brazilian company Petrobras. The manager of the Swiss branch was also sentenced, for having directly benefited from corruption, to a suspended custodial sentence of 24 months and an equivalent claim of CHF 480,200 (2020). Marly could probably have done without this bad publicity.

Multinational specialising in legging and tax minimisation

Not all holding companies and other shell companies commit illegal acts. Tax minimisation is another benefit derived from creating these legal entities. Therefore, the holding company of Inditex – the group which owns the clothing chains Zara, Massimo Dutti and Bershka – made its domicile at 6 rue Louis-d’Affry, a stone’s throw away from Fribourg train station. The company is certainly more than a mailbox. Actually, Inditex had created three intertwined entities: ITX Trading SA, ITX Holding SA – deregistered in January 2020 with the end of the special statutes – and ITX Merken BV (Fribourg branch).

It’s under this last name that the company was “repatriated” for accounting purposes, at least until recently, with a significant part of the profits being made under less lenient jurisdictions. The Bloomberg financial agency estimated that Inditex had, between 2009 and 2012, saved some CHF 325 million in taxes.

By way of comparison, in 2008, the Director of Finance in Fribourg estimated the tax revenue from all holding companies established in the canton at CHF 2 or 3 million (CHF 3.5 million in 2018). A small public benefit compared to the savings made by the major companies. This is the type of practice which global tax reform is aiming to abolish in order to harmonise the way in which multinationals are taxed.

According to Public Eye’s estimates, Fribourg still has 3064 shell companies. Faced with the large offshore centres like Zug and Geneva, there is no reason to encourage the agricultural canton to want, as its Director of Finance put it, “to remain the only ‘goody two-shoes’”.

More infos

  • Methodology: Three methods for dealing with a sensitive subject in Switzerland

    One thing must be said straight away: our data remains a screenshot of the corporate structure at a given time T. It reflects the economic structure of a given canton at the time we extracted the data from This delve into the central index of all the company names in Switzerland enabled us to perform a first mapping of the addresses featuring the most companies and those containing the most company names with c/o in them.  

    So we have identified tens of thousands of companies, from which the companies in liquidation must be removed. The large commercial centres are logically home to more than a hundred companies. Not to mention hospitals and clinics where practitioners register their centre of activity. The development of co-working spaces is also encouraging certain companies to group together at a single, identical address. We have therefore discounted these from the analysis.

    The various commercial registers have also enabled us, through a technique of extracting digital data known as “scraping”, to establish a ranking in terms of the individuals and firms administering the most companies by canton.

    We then had to look at the substance of these companies: their number of employees in full-time equivalent (FTE) posts. Anonymised data (without company names) is publicly available on the website of the Federal Statistical Office (FSO). It provides a reference for the companies – and the number of employees – based on their geographical coordinates. However, results for companies with less than four employees are not detailed, and the administration has again taken care to systematically replace the last two digits of the geolocation data to complicate the matter of identifying the companies. “Number of employees” seems to be regarded as highly sensitive data in Switzerland.  

    In order to obtain the unabridged data for 2018 (the latest statistics available at the time of the research), we had to sign a data protection agreement designed to limit our ability to disseminate too accurate results or for each individual company, or to reveal the identity of companies with fewer than four employees. It was therefore this third database which enabled us to calculate an average ratio of full-time equivalents per address. We used it to geolocate addresses via the Google Geocoding geolocation API. The address file has been supplemented by searches on Google Maps, visits to the different avenues and floors in the buildings themselves, along with searches through the directory Having no phone number may be a tell-tale sign that the company doesn’t have a substantial presence.

    When asked about the reasons for the confidentiality surrounding these statistics, the FSO merely reminds us that it “applies the legislation in force relating to data protection”, and refers us to a relevant web page.