Why the Swiss Franc Is So Strong
(And What It Means for Your Business)

Understanding why the franc remains exceptionally strong helps you make better financial decisions, whether you're invoicing international clients, importing supplies, or planning investments. This guide explains the factors behind the franc's strength, its historical evolution, and practical strategies for Swiss businesses navigating currency fluctuations.

The Numbers Behind Switzerland's Currency Strength

Current snapshot (2026):

• The Swiss franc gained 12.7% against the USD in 2025
• An additional 3.5% appreciation in early 2026
• Switzerland's inflation rate: just 0.1% (compared to 2-3% in most developed economies)
• SNB policy rate: 0%
• EUR/CHF forecast: approximately 0.91 by year-end (Raiffeisen)

These figures reveal a currency under persistent upward pressure, driven by global uncertainty and Switzerland's economic fundamentals.

A Brief History: How the Franc Became a Global Standard

1850: Creating a Unified Currency

Before 1850, Switzerland had no single currency. Each canton issued its own coins and notes, making trade cumbersome. The 1848 constitution centralized monetary authority, and in 1850 the Federal Assembly introduced the Swiss franc to replace dozens of regional currencies.

The new franc was initially set at parity with the French franc (backed by 4.5 grams of silver), establishing immediate credibility and easing international trade.

1907: The Swiss National Bank

The SNB was established to manage the franc professionally and maintain its stability. This central bank adopted conservative policies that became the foundation of the franc's reputation—avoiding inflation, maintaining substantial reserves, and prioritizing currency stability over short-term economic stimulus.

1936: The Only Devaluation

During the Great Depression, Switzerland initially resisted devaluing the franc while other nations abandoned gold-backed parities. Eventually, economic pressure forced a 30% devaluation in September 1936—the first and only time the Swiss deliberately weakened their currency.

This historical reluctance to devalue reinforced the franc's image as an exceptionally stable store of value.

2000: Ending the Gold Link

Switzerland was among the last countries to sever its currency's formal connection to gold. Until 2000, Swiss law required the franc to be at least 40% backed by gold reserves—a unique constraint in modern finance.

A 1999 referendum approved removing this requirement, allowing the SNB greater flexibility. The franc became a pure fiat currency in May 2000, though the SNB still holds approximately 1,040 tonnes of gold (about 6% of total reserves).

2015: "Francogeddon"

The most dramatic recent event came on January 15, 2015. For three years, the SNB had defended a minimum exchange rate of 1.20 CHF per euro, intervening massively in currency markets to prevent excessive franc appreciation.

That Thursday morning, the SNB suddenly abandoned the cap. The franc surged 30% against the euro in minutes before settling at new, higher levels. This "Francogeddon" event shocked markets, bankrupted some currency traders, and demonstrated both the franc's immense safe-haven appeal and the limits of central bank interventions.

If You Export Goods or Services

Challenge: Your offerings become more expensive in foreign markets as the franc appreciates.

Strategies to consider:

1. Emphasize value over price - Position your work as premium quality that justifies higher costs. The "Swiss made" reputation for precision and reliability supports this approach.
2. Invoice in customer currency - Offer pricing in euros or dollars to provide certainty to foreign clients, though this shifts exchange rate risk to you.
3. Long-term contracts with adjustment clauses - Build in currency adjustment mechanisms for multi-year agreements, sharing exchange rate risk between parties.
4. Diversify your client base - Don't rely exclusively on price-sensitive markets; cultivate clients who value quality and are less affected by modest price changes.
5. Optimize your cost structure - A strong franc makes imported inputs cheaper; source materials and services internationally where possible.

If You Import or Source Internationally

Advantage: Foreign goods and services become less expensive as the franc strengthens.

How to leverage this:

1. Strategic purchasing timing - Consider accelerating equipment purchases or inventory buildup when exchange rates are favorable.
2. Renegotiate supplier contracts - Use franc appreciation as leverage to secure better terms from international suppliers.
3. Expand your supplier network - Source from abroad more aggressively to reduce costs, particularly for standardized inputs.
4. Invest in international marketing services - Foreign advertising, design work, and software subscriptions offer better value.

For Service Providers and Freelancers

The balancing act: You face higher local costs (rent, insurance, living expenses) while competing with lower-priced international alternatives.

Practical approaches:

1. Target the right clients - Focus on customers who value Swiss reliability, quality, and data protection over lowest price.
2. Develop specialized expertise - Deepen your knowledge in niches where expertise commands premium rates regardless of geography.
3. Mixed pricing strategies - Consider offering some services at market rates while charging premium for high-value consultation and specialized work.
4. Monitor exchange rate trends - If you regularly convert foreign currency earnings, establish a systematic approach rather than trying to time the market perfectly.

Deciding When to Invoice in Foreign Currency

Invoice in CHF when:

• You want certainty about the amount you'll receive
• Your costs are primarily in Swiss francs
• You work with clients who regularly transact in CHF
• You prefer simplicity in your accounting

Invoice in foreign currency when:

• Your client requests it for their budgeting
• You're entering price-sensitive markets
• You have natural hedges (foreign currency expenses)
• You're comfortable monitoring exchange rates

Currency Conversion Best Practices

1. Convert regularly rather than waiting - If the franc trends stronger (as it has), holding foreign currency means watching its CHF value decline. Regular conversion reduces this risk.
2. Use competitive exchange services - Traditional banks often charge 1-2% in hidden markups. Services like Wise offer mid-market rates with transparent fees.
3. Track exchange rates in your accounting - Modern accounting software should automatically record the CHF value of foreign currency transactions on the transaction date for accurate tax reporting.
4. Set conversion thresholds - Establish clear rules (e.g., "convert when balance exceeds €5,000" or "convert monthly on the 1st") to avoid decision fatigue.

VAT and Tax Considerations

• VAT threshold: Freelancers earning over CHF 100,000 must register for VAT, regardless of currency invoicing
• Tax reporting: All income must be declared in Swiss francs using exchange rates on the date payment was received
• Record keeping: Maintain detailed records of exchange rates used for each transaction
• Deductible expenses: Foreign currency expenses are deductible at their CHF equivalent on the date incurred

Swiss accounting software like Magic Heidi automatically handles multi-currency transactions, tracking exchange rates and converting amounts to CHF for tax purposes—eliminating manual calculations and potential errors.

Magic Heidi simplifies multi-currency accounting for Swiss freelancers and small businesses. Track foreign currency income, automatically convert to CHF for tax reporting, and manage VAT obligations—all in one intuitive platform designed specifically for the Swiss market.

Key Features for Currency Management:

• Automatic CHF Conversion - All foreign currency transactions automatically converted at accurate exchange rates for tax reporting
• Multi-Currency Invoicing - Invoice clients in EUR, USD, GBP, or CHF with professional QR invoices
• Exchange Rate Tracking - Historical exchange rates recorded for every transaction
• VAT Compliance - Automatic VAT calculations on multi-currency transactions
• Tax-Ready Reports - All income and expenses properly converted for Swiss tax declaration

The strong franc isn't changing. But your currency management can be effortless.