Business leaders and unions in Switzerland are mobilising ahead of a referendum on Sunday on capping immigration, which has triggered fears of dire impacts on employment and trade relations with the European Union.

The vote will focus on a proposal by the hard-right Swiss People's Party (SVP) aimed at keeping the wealthy Alpine nation's population, currently 9.1 million, below 10 million until 2050.

The SVP, the country's biggest party, argues that the initiative, entitled "No to a Switzerland with 10 million!" is needed to fight "out of control" immigration, which it blames for problems ranging from overcrowded trains to skyrocketing rents and urban sprawl.

The initiative faces broad opposition across the government, parliament and business sector, but opinion polls suggest the vote could be tight.

Major employers' organisations and unions have dubbed it a "chaos initiative."