The question is this thread's title.

To ask this question is not to understand Switzerland:

money isn't everything and ones own canton is the best place to live...

So you're saying that the reason is that people stay in other cantons because they in general don't like to worry about paying some taxes? I'm not saying that is bad. I just want to be clear on this. I thought that maybe some rules and regulations of some sorts prevented businesses to flock to Zug. You're saying that is definitely not the case?

I also find this strange because it's different that a business moves to Zug, than a person moving to Zug. The business itself, on paper, could move to Zug and the people could stay in their home cantons. Why don't businesses flock to Zug? That's a question that has been on my mind for a while.

I suggest a few years of business school, and maybe one or two years experiencing life - you'll come up with the answer then.

Hehe. Well, if everyone just did their own research from scratch, we wouldn't even need these forums. I'm asking here because I thought that maybe somebody already had gone through "a few years of business school, and maybe one or two years experiencing life" so they could summarize their wisdom in a few sentences :P

Zug is expensive to live / have a letterbox in and there is limited room. There also is a certain prestige with other locations. It's a bit like saying "if everyone likes sunshine, why don't we all move to the desert?".

Just a few nights ago, I was watching a popular US journalism show, "60 Minutes," and the topic was how more and more US companies are moving their headquarters out of the US in order to avoid the US's high corporate tax rate...

I found it interesting that the only city that was highlighted was Zug. Apparently, quite a few US companies are renting office space in Zug and call it their "headquarters" in order to pay the lower Swiss tax rate and avoid the higher US tax rate. But in reality, their headquarters usually aren't really there in Zug. Basically, they just keep empty office space with a mailbox.

P.S. Yes, I'm sure many of you already knew this.

Worms.

Zug is notorious for its infestation by Geldwürmer, microscopic worms which eat bank notes. The banks in Zug find it necessary to fumigate their premises at least four times a year in order to continue their bloodsucking business. Unfortunately, the chemical required for fumigation of the worms is expensive - too expensive for most private citizens to afford. Consequentially, the people in Zug are obliged to keep their money in hermetically sealed ceramic tubs, which are heavy and inconvenient, but at least prevent the worms from eating all their wealth.

The cantonal authorities desperately try to attract rich people and businesses to Zug with their low tax rates. Foreigners, who know no better, are tempted by such carrots, while Swiss people stay well clear.

There's your answer. I didn't attend a business school, but I have several years' experience of life.

Because the tax system is not as simple as you think it is. The overall average for a canton says nothing. I pay for example less taxes in the right place in Schwyz than I would anywhere in Zug. (And I am conicidentally looking for someone taking my flat over... so if you are interested in a really good tax bill, let me know)
Additionally are the prices for rents and properties so much higher in the low tax places that the business case does not make sense for all... read those MBA books till the end...

What kind of taxes are we talking about in your place in Schwyz? Income taxes? Corporate income taxes? Capital gains taxes?

...and what is this right place exactly? (These forums don't allow me to edit posts. Hence this silly addition.)

Are you trying to establish a business and scrimping on proper advisors?

Ok, maybe someone should try to give an answer to the question rather than write unhelpful drivel.

The reason why not every company in CH is registered in Zug is because tax law states that you must be registered in the canton where your staff are physically 'located'. If you register in Zug and then open your office in Zurich, then the tax office of Zug may visit you to check your physical presence and find nothing there (except a postbox). In which case you end up in trouble. Of course, they may never visit, and its not really in their interest to expel you to another canton anyway, as they lose the tax revenues. However the authorities where you do have your office may ask some awkward questions, if they ever were to visit. Equally, it looks a bit odd if the registered director lives in (i.e. is registered in) Geneva, but opens an office in Zug. Particularly if its a small company.

So if you follow the rules, you register where you are located. That is what tax law says you must do. But plenty of people figure that the chance of problems isn't so great, and register in Zug anyway. Hence the huge number of postboxes.

Well Zug is not necessarily the cheapest.

Did you ever wonder why almost all Swiss rental cars have VD or AI number plates?

Fixed that for you.

Schwyz has the cheapest tax rates, but the train connection is not as good as Zug!

How long approx to travel from Zug to Zurich via train? What about Schwyz to Zurich?

Again:
I've never quoted myself before but...

www.sbb.ch

It even comes in English...