Why is Switzerland so Expensive? 10 Reasons (2024)

Wondering why Switzerland is so expensive?

You’ve come to the right place as I’ve visited multiple places in Switzerland and I know exactly why it’s so pricey.

Switzerland is an amazing country to visit. From the Alps to the cities, Switzerland is beautiful.

But it’s got a reputation for being an extremely expensive country. And the truth is, it is.

Why is this the case? Why is Switzerland so expensive?

This is a really common question people have before visiting Switzerland as it’s hard to justify spending so much money in a country.

Luckily for you, I’ve visited multiple places in Switzerland and I’m here to provide a complete guide as to why Switzerland is so expensive.

So let’s get right into it.

Why is Switzerland so expensive?

I have 10 main reasons why Switzerland is so expensive. Of course, there are more reasons than this but these are the main ten reasons, in my opinion. I will now outline them and then go into more detail on each point.

The main reasons Switzerland is expensive are:

  • High Standard of Living
  • Strong Currency
  • High Wages
  • Cost of Housing
  • Limited Agricultural Production
  • Taxes and Social Security
  • Quality Standards
  • Import Duties
  • Limited Competition
  • Strict Regulations
A picture of some Swiss Francs, the currency in Switzerland

High Standard of Living

One of the main reasons Switzerland is so expensive is because the country is extremely well-run.

The healthcare and health insurance, education system, social services, etc., are all top quality. There are few countries in the world which can compete with Switzerland in these regards, and it’s often why the country can feel so luxurious.

There are multiple airports for a city as small as Basel, which pretty much sums up the quality of Swiss life.

Put short, Switzerland is run well with a high standard of life which means it costs more to live there and visit too.

This is the same reason it’s expensive to visit Denmark.

Strong Currency

Switzerland’s currency, the Swiss Franc (CHF), is one of the strongest and most stable currencies in the world.

This makes Switzerland expensive to visit as a strong currency means things cost more money essentially.

If you think of countries where the currency isn’t as strong, like Thailand for example, these countries are incredibly cheap to visit, hence why backpacking Thailand is so popular, but you visiting Switzerland on a budget is not.

Also, the luxurious retreats of Switzerland thanks to the snow in the Swiss Alps create an even further increased price.

A picture of a 20 CHF note, one of the answers to "Why is Switzerland so expensive?" is the strong currency.

High Wages

The residents of Switzerland are paid very high wages compared to other countries, even bordering countries like France or Germany. This is somewhat as a result of the high quality of living.

But due to the high wages, Swiss people have more money to spend, which naturally leads to higher prices. Unfortunately for non-Swiss residents, this makes travel in Switzerland incredibly expensive as our wages are not at the same level as in Switzerland.

Cost of Housing

Buying a house is also super expensive in Switzerland but this makes real estate work extremely popular in Switzerland, again, leading to high wages and high prices as a result.

And also higher wages for other workers to be able to afford to live in a house. For tourists, this affects us as it means it is more expensive to stay in accommodation than it is in other countries, as the running costs are higher.

A picture of some houses in Basel. Another reason why Switzerland is expensive.

Limited Agricultural Production

As Switzerland is a very mountainous country, there isn’t much opportunity for agriculture or farming, meaning Switzerland has to import the majority of its food and resources.

This means there are a lot of imports into Switzerland but not as many exports, so prices are raised in Switzerland to balance things out.

Taxes and Social Security

Switzerland tax rates are pretty high, and this results in higher VAT, which again, results in higher prices across pretty much anything and everything in Switzerland.

It makes sense that tax rates are so high because the quality of public services like education and healthcare are phenomenal as I said before, but it’s frustrating as a tourist that it means prices are sky-high for us visiting the country.

Import Duties

As I said, Switzerland has to import pretty much everything due to the terrain. And there are high import tariffs for most things, meaning that Switzerland has to pay a lot in tax, which needs to be recovered by charging higher prices.

That being said, Switzerland does have some international trade agreements, but for the most part, prices are high as they are imported.

Quality Standards

I said earlier about the high quality of life in Switzerland and the luxurious atmosphere you can feel throughout the country, and this applies to products too.

One of the reasons that things are so expensive in Switzerland is simply because they are better. Think of chocolate for example, a bar of Lindt chocolate is going to cost more than a supermarket’s own brand.

A picture of a fancy hotel in Switzerland. Why is Switzerland so expensive? The quality of living is higher.

Limited Competition

Many industries in Switzerland are faced with no competition, and there is only one stand-out company which is used by most people. As a result, they can pretty much charge as much as they want which obviously leads to higher prices.

Switzerland does have strict laws to avoid a monopoly situation, but there are still instances where companies have no solid competition, meaning prices are high.

Strict Regulations

To keep the quality of industries and products high, and luxurious as I keep saying, there are strict regulations in Switzerland which have to be met.

As a result, companies have to spend extra money meeting these regulations, and then charge more to make up for their spent money and efforts.

It’s a case of “you get what you pay for” I guess, and the regulations keep the quality high which keeps prices high.

So to summarise why Switzerland is expensive, pretty much the quality of products and services in Switzerland are controlled to be of a very high standard, and the way of life is extremely luxurious and of a high quality of living.

As a result, prices are higher because better things cost more money, right? That is, in simple terms, the answer to “Why is Switzerland so expensive?”

Is Switzerland the most expensive country in the world?

No, Switzerland is not the most expensive country in the world.

The first most expensive country in the world is Bermuda, and Switzerland is the second most expensive country in the world.

So if you weren’t entirely sure just how expensive Switzerland is, there’s your answer. It’s the second most expensive country in the world, so it’s pretty damn expensive haha.

It has a cost of living index of 114.2. For reference, the USA’s is 72.4.

A picture of a street in Zurich with lots of Swiss flags.

Why is Switzerland so expensive: FAQ

Below are some common questions related to “Why is Switzerland so expensive?” along with my answers.

Why is Switzerland so pricey?

There are lots of reasons why Switzerland is so pricey but the main reason is because the standard of living is higher, which naturally results in higher prices. Also, Switzerland has to import pretty much everything as the mountainous terrain is not suited for agricultural work.

Is Switzerland really so expensive?

Yes, Switzerland is really expensive. It is the second most expensive country in the world, only behind Bermuda. Everything in Switzerland is more expensive than in any neighbouring European country.

How much does a meal cost in Switzerland?

Like anywhere in the world, the cost of a meal in Switzerland depends on where you are eating. In a decent restaurant, a meal can cost around 30 CHF per person. Of course, this can be a lot higher. A Happy Meal in McDonalds costs 7.40 CHF for reference.

Is Switzerland or UK more expensive?

Switzerland is more expensive than the UK by a large margin. Everything in Switzerland is more expensive than in the UK. Switzerland is the second most expensive country in the world, whereas the UK is the 33rd.

Why is Switzerland so expensive: Conclusion

And there you have it, a complete guide to “Why is Switzerland so expensive?

The answer is pretty much because the quality of products and services is better.

And better things cost more money, which makes Switzerland expensive.

Enjoy your trip to Switzerland. You’re guaranteed to have a good time, even if your bank account does not!

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