For a long time, Switzerland has attracted a large number of international companies and foreign talent thanks to its open labor market, relatively low tax burden, and stable business environment. However, as population growth continues and pressure on public resources such as housing and transportation intensifies, this Alpine country is now facing an important decision about its future direction.
According to CNBC, Swiss voters will hold a referendum on June 14 on population control, deciding whether to establish a population cap mechanism. If the proposal is approved, the government and parliament would be required to take measures to ensure that the resident population does not exceed 10 million by 2050.
Population surpasses 9 million, raising concerns about social carrying capacity
Official data shows that by the end of 2025, Switzerland’s population had exceeded 9.1 million, an increase of about 10 percent over the past decade. At the same time, the country’s demographic structure has shifted significantly: the population aged 65 and above has for the first time exceeded the population under 20.
According to the Swiss Federal Statistical Office, by the end of 2024, about 41 percent of residents had a “migration background,” including both immigrants and their descendants born in Switzerland; roughly one-third of permanent residents are first-generation immigrants.
Currently, about 1.4 million EU citizens live in Switzerland, accounting for around 16 percent of the total population. In addition, 340,000 people cross the border daily to work in Switzerland. Although net migration and birth rates both declined last year, the rapidly growing population remains a concern for some voters.
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The referendum initiative, promoted by the right-wing Swiss People’s Party (SVP), argues that continued population growth is increasing pressure on housing shortages, rising rents, overcrowded schools, and transportation infrastructure.
SVP lawmaker Piero Marchesi said Switzerland needs to send a clear signal to policymakers to prevent uncontrolled population growth, CNBC reported.
If approved, free movement agreement with the EU could be affected
Under the proposal, if the population exceeds 9.5 million at any point in the future, the government would activate measures to restrict population growth, with asylum applications and family reunification programs potentially being the first to face cuts.
More significantly, once the population exceeds the 10 million threshold, the agreement on free movement of persons between Switzerland and the European Union could also be at risk of termination.
As a Schengen member, Switzerland is not an EU member state, but has long benefited from highly convenient mobility and employment arrangements with the EU. European citizens can live and work in Switzerland as long as they have employment or a stable source of income.
The Financial Times previously noted that Switzerland’s network of bilateral agreements with the EU is a key pillar of its export-oriented economy, and the free movement mechanism is a central component of that system. Any friction in relations could affect investment expectations and labor supply.
Recent polling shows 52 percent of respondents oppose the proposal, while 45 percent support it, indicating a relatively close divide.
Business community warns restrictions could weaken competitiveness
Swiss business groups have expressed widespread concern over the referendum.
According to CNBC, Economiesuisse, which represents more than 100,000 companies and institutions, has publicly opposed the proposal. Its members include multinational corporations such as Google, Amazon Web Services, Roche, and Johnson & Johnson.
Chief economist Rudolf Minsch said Switzerland’s prosperity is built on openness, innovation, and close economic ties with Europe.
He acknowledged that housing and infrastructure pressures are real, but argued that simply imposing immigration caps would not solve the problem.
“Rigid immigration caps are not the right answer, particularly if they risk undermining the bilateral agreements with the European Union, which are of central importance to the Swiss economy,” he said.
Minsch also noted that key industries such as pharmaceuticals, technology, and healthcare rely heavily on international talent, and strict immigration limits would weaken innovation capacity and economic competitiveness.
Business leaders and academics warn of a potential ‘Brexit-style’ outcome
At last week’s Swiss Economic Forum, Nestlé CEO Philipp Navratil stressed that Switzerland’s long-standing appeal to international capital lies in its stability and predictable policy environment, Bloomberg reported.
He said Nestlé currently operates nine factories and three research centers in Switzerland, with most of its R&D still based in the country.
“Switzerland has established and created the conditions that enable a global company like us to thrive,” Nestlé CEO Philipp Navratil said at the Swiss Economic Forum in Interlaken. “It is important that these conditions and advantages in Switzerland remain in place. When we vote in the coming weeks, we need to keep that in mind.”
UBS CEO Sergio Ermotti noted that while there is public dissatisfaction with population growth, extreme measures are not the solution.
Meanwhile, João B. Duarte, an economics professor at Nova School of Business and Economics, warned that even before any restrictions take effect, policy uncertainty alone could influence corporate investment decisions.
Citing the post-Brexit labor market experience in the United Kingdom, he said ending free movement did not lead to a rapid replacement of foreign labor by domestic workers, but instead resulted in hiring difficulties, labor shortages, and rising costs across multiple industries.
“If a ‘yes’ vote eventually forces Switzerland to terminate the free movement agreement, the strain would not be limited to migration policy. It could spill over into the entire Swiss-EU economic relationship,” Duarte said. He added that the EU is Switzerland’s main trading partner, and free movement is tied to the broader bilateral framework that gives Swiss firms privileged access to European markets.
For a country long regarded as one of the world’s most open economies, this referendum is seen as more than a question of population numbers—it is widely viewed as a major decision shaping Switzerland’s economic model for decades to come.
