Switzerland plans to ease the tax burden for hedge funds and private equity funds and soften regulations for investment funds in a move to boost its standing among other financial centers.

The aim is to get the tax burden for hedge funds in line with taxes of 15 to 20 per cent in competing centers like London or New York, according to the chairman of the Swiss Bankers Association Urs Roth.

Currently taxation varies widely due to different application of local, state and federal tax rules, putting Switzerland at a disadvantage with other financial centers competing for the growing hedge fund industry.

The Swiss banking watchdog EBK also plans to end additional regulations on top of internationally required rules for Swiss and foreign investment funds. While Switzerland is only home to few hedge funds it is with $200 bn the world's second-biggest hedge fund investor after the United States.