Kraft Foods, the American multinational, is joining the flight of US corporations that are moving their European headquarters to Switzerland in search of efficient transport, lower taxes and an easier lifestyle.

Kraft has taken a lease on a building in Zurich and will transfer staff from Vienna and from Kraft’s UK headquarters in Kew, southwest London.

The US firm, which owns a portfolio of famous brands, such as Philadelphia cream cheese, Kenco coffee and Terry’s Chocolate Orange, is following in the footsteps of Procter & Gamble and Colgate-Palmolive, which have shifted their European headquarters to Switzerland to take advantage of its tax regime and smooth infrastructure.

Some 200 UK jobs will be affected by the move to Zurich, Kraft said yesterday, suggesting that tax was just one of the factors that drew the company away from London. Other issues, including public transport, lifestyle, quality and the cost of accommodation were equally important.

A spokesman for Kraft said that the company had conducted a survey of different headquarter locations and Zurich came top. He said: “What do you need for a corporate headquarters? It’s the ease of getting about: good transport to the airport, good rail links. We have a lot of expatriate staff so availability of schools and good quality accommodation are important.

Biogen Idec, a US pharmaceutical company, recently decamped from Paris to Zug, a canton which boasts nil corporate tax. The knife was twisted further when Johnny Hallyday, the French rock star, revealed that he would move his residence to Gstaad because he was “fed up” with French taxes.

Supporters of the French Socialist presidential candidate, Ségolène Royal, accused Hallyday of treachery and called for European action against Swiss “tax banditry”. However, President Chirac said that France must reduce its corporate tax rate if it is to remain competitive, calling for a reduction of the rate from 33 per cent to 20 per cent within five years.

In Zurich, the normal range of corporation tax is between 15 per cent and 24 per cent but foreign holding companies using Zurich as an administrative base are exempt from tax on their non-Swiss earnings.

Switzerland vigorously supports tax competition and not just on an international basis. Even within Switzerland, which has a dual federal and cantonal tax structure, cantons are encouraged to compete on tax rates.

The cantons have the greatest spending burden and the biggest scope to compete for international dollars and tax rates vary. Some of the lowest rates found in mountain regions, such as Zug and Schwyz, which have attracted a number of large and tax-shy corporations, such as Xstrata, the mining group.

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