Behind Switzerland’s photogenic villages and pristine landscapes lie some uncomfortable truths, some of which are now being dragged into light, others of which still fester out of tourists’ view.

The biggest has to do with the country’s legendary prosperity, built off lucrative banking deals with truly evil people. Ever since Switzerland hoarded millions of dollars’ worth of Nazi gold during WWII, it has been known as a banking El Dorado for wealthy dictators, despots and tax cheats who wanted to stash away their profits beyond the reach of the authorities at home.

That began to change in 2008, when a U.S. investigation forced Swiss bank giant UBS to hand over the names attached to nearly 5,000 secret accounts held by Americans, in addition to paying a $780-million legal settlement as punishment for helping the tax evaders. A series of laws since then has chipped away at the once-impenetrable wall of secrecy around Swiss banks. The big death knell came in 2018, when, for the first time, Switzerland began sharing its foreign clients’ banking data with their home countries’ tax authorities.

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Switzerland is still estimated to hold some 1.8 trillion dollars in offshore wealth, but as its appeal as a tax haven shrinks, it’s been looking for alternatives. One, naturally, is fintech. Swiss cryptocurrency startups have been blossoming of late; at the time of writing, even some of the country’s oldest banks were beginning to pivot to Bitcoin et al.

More precious to the Swiss than their country’s reputation as a repository of wealth is its image as a bastion of tolerance—but that, too, is being challenged. Despite its linguistic and cultural diversity, Switzerland harbors the same anti-immigrant, anti-Islam sentiments as in other parts of Europe. And with its unique “direct democracy” system of popular initiatives and nationwide referendums, it’s been able to quickly translate those sentiments into law. One such referendum, drawn up by the right-wing Swiss People’s Party in 2009 and supported by 60 percent of the country, banned the construction of minarets on mosques. Two Swiss cantons, Ticino and St. Gallen, have passed bans on burqas and other facial coverings. In 2014, just over half of Switzerland voted in favor of a referendum that aimed to severely restrict immigration through quotas. That ruling has since been watered down through E.U. negotiations, but the message to newcomers, especially those from the Arab world, has been made clear: the welcome mat is not out.

The country also has some distance to go in terms of gender equality—this, after all, is a place where women didn’t fully receive the right to vote until 1971. In what was hailed as a milestone in 2010, women captured four of seven seats in Switzerland’s cabinet; that number has since shrunk to two, and there are twice as many men as women in the federal parliament. But it’s not all bad news. The Swiss government recently committed to narrowing the country’s 20 percent gender pay gap, passing unprecedented salary reporting laws.

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Switzerland has generally kept pace with the rest of western Europe on LGBTQ rights. Homosexual sexual activity was decriminalized across the country in 1942, though it had already been legal in a few cantons before then. Same-sex partnerships have been recognized since 2007, and at time of writing (2019), the Swiss Parliament was debating whether to legalize gay marriage. Zurich’s current mayor, Corine Mauch, is the city’s first female mayor as well as its first openly gay one.

And then there’s Switzerland’s relationship with the European Union, which remains rocky after all these years. Younger voters and liberal Francophones have expressed enthusiasm for joining the E.U., but residents of the conservative German-speaking hamlets in the country’s center—who make up the majority of the population—remain steadfastly opposed, as do the Italian speakers in the south (who, as a rule, are only slightly less conservative than the Swiss Germans).

Though warned that failure to stay out of the European Union would mean trouble for their economy, Swiss voters narrowly chose to remain outside the free-trade zone in 1992. Switzerland is part of the Schengen area, meaning there are no passport controls on its borders with Germany, France, Italy, and Austria. But the E.U. continues to impose the same trade barriers against Switzerland that it does against Japan and the United States. New negotiations are ongoing, but for the time being, E.U. tariffs as well as the cruelly high value of the Swiss franc (made worse by the 2014 unpegging of the currency to the euro) have dented the tourism and export industries.

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Yet the Swiss continue to flourish, making great advances in science, business, and technology while cities like Zurich, Basel, and Geneva consistently top international quality-of-life indexes. The air and water remain some of the cleanest in Europe, untainted by pollution thanks to ever more progressive environmental laws. Art, culture and even subculture are booming, both in the usual urban centers and in unexpected alpine nooks and crannies. Its quaint, peaceful veneer may be tarnished, but like one of its most famous exports, Switzerland keeps on ticking.

A Country of Immigrants

Switzerland has one of the highest percentages of foreigners of any country in the world: about a quarter of the population holds non-Swiss passports. Of these approximately two million residents, 80 percent come from other European countries, chiefly Italy, Germany, Portugal, and France. A significant proportion hail from former Yugoslavia, the result of an asylum seeker influx in the 1990s and early 2000s. Despite having lived in the country for years, Switzerland’s Albanians, Bosniaks, and Serbs still face more discrimination and lower salaries than western European migrants—with the exception, of course, of pro soccer players.

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Italians are Switzerland’s single biggest foreign population (not to be confused with the indigenous residents of Ticino, who speak Italian but identify as Swiss), and the relationship between the two countries somewhat resembles that of the U.S. and Mexico: the Swiss complain about Italian migrants crossing the border and driving local wages down, while at the same time welcoming their cuisine and hiring them to do the country’s “dirty work.” (Your cab driver, restaurant server, and hotel cleaning staff? Probably Italian.)

A Confederation of Cantons

Switzerland is made up of 2,240 communes, each one largely responsible for its own public affairs, including school systems, taxation, and town infrastructure. The international sign CH, found on Swiss motor vehicles and at the end of web addresses, stands for Confoederatio Helvetica (Swiss Confederation). Over the centuries, neighboring communes have bonded together in a confederation of 23 cantons, each with its own constitution, laws, and government. They have surrendered only certain aspects of their authority to the Swiss government, such as foreign policy, national defense, and general economic policy. Even citizenship in Switzerland is decided on a municipal level, not a federal one—applicants are interviewed by a jury of locals from their commune, with questions covering everything from recycling to hiking to Hornussen.

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On a country level, Switzerland’s laws are passed by a Federal Parliament consisting of a 200-member National Council, elected by the people, and a 46-member Council of States, in which each canton has two representatives. The government’s executive branch, the Federal Council, is composed of seven members who make decisions jointly, although each councilor is responsible for a different department. The president of the Federal Council, who serves a 1-year term, leads the Confederation as primus inter pares (first among equals).

Switzerland’s “direct democracy” system means that any changes to the country’s constitution must be voted on by the public, and approved by a majority of both citizens and cantons. Citizens can also suggest new laws themselves; any proposal that garners over 100,000 supporters can be carried into a nationwide referendum. Most of these, however, fail to pass—like 2016’s infamous universal basic income initiative, turned down by over 75 percent of voters.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.