Residency By Investment In Switzerland
Switzerland is a dream destination for many investors. It is one of the most immigrant-friendly countries in Europe and the most sought after by businessmen because of its high standards of living, political neutrality, world-class infrastructure, and beautiful landscape. It has been an ideal destination for retired people, business investors and wealthy individuals.
Benefits of Swiss Residency:
- Visa-free travel in Europe
- Privacy and freedom
- Ideal destination for retirees and wealthy families
- Opportunity to invest in or purchase of real estate property
- Choice of Swiss canton, location
An applicant from a non-EU country can get Swiss residence permit in two ways:
- Swiss Company Formation (For Corporates)
- Swiss Lump Sum Taxation (For Retirees)
For investors, businessmen, and corporates, the Swiss Company Formation is the ideal way of obtaining permanent Swiss residency whereas the Swiss Lump Sum Taxation is most apt for wealthy individuals or retirees.
A foreign national is welcome in Switzerland to form a company (in a Swiss canton) which has the scope of creating jobs and economic opportunities for the local Swiss citizens, thereby contributing to Switzerland’s economic development. The company’s owner is eligible to get a residence permit in Switzerland. The most popular forms of company in Switzerland are GmBH/SARL (like LLC) and AG (for corporations). The canton of Zug is the most favourable one to form a company in because of its low corporate taxation.
It is possible to obtain a residence permit in Switzerland by paying an “annual lump sum taxation” fee, which amounts to a minimum of CHF 150,000 (approximately USD 170,000) or more, depending on the chosen Swiss canton (except Zurich). This fee amount may go up to CHF 1 million or more depending on the chosen canton. Swiss residency is granted to people under various categories – retirement, wealthy individuals, or business employee. Anyone who can pay the minimum fee is not required to declare worldwide income and assets.
The most sought out Swiss cantons under this programme are Bern, Appenzler, Fribourg, Jura, Geneva, Graubunden, Schwyz, Nidwalden, St.Gallen, Valais, Vaud, Lucerne, Ticino, Slothurn, Obwalden, Thurgau, and Zug.
The usual time to get a residence permit in Switzerland is 3-4 months approximately.
To be eligible for a Swiss residence permit, the following criteria must be met:
- No employment or occupation in Switzerland
- The first time resident or foreign applicant must not have resided in Switzerland in the last 10 years
Requirements for Rented or Purchased Residence in Switzerland:
To be eligible to apply for residence under this programme, one must be above 18 years of age. Those seeking residence permit under the retirement scheme must be above 55 years of age and provide proof of adequate financial means.
A number of identification documents need to be submitted along with the application and the applicant must also show proof of a clean criminal record and good moral character.
A Swiss residence permit allows one to buy real estate property such as an apartment home without securing any prior approvals from the authorities in Switzerland.
Also by paying a lump sum taxation fee to the Swiss canton, an investor immigrant is not required to declare worldwide income and assets to the Swiss authorities. This is one of the main advantages of residency in Switzerland when compared to other high tax countries.
The amount of lump sum taxation that an investor needs to pay is calculated based on five times the annual rental income compared to annual living expenses, whichever is higher. For instance, if an investor rents an apartment for CHF 10,000 a month and his total living expenses are CHF 200,000 annually, then his annual rent is CHF 120,000, which when multiplied by five becomes CHF 600,000. Since CHF 600,000 is more than the annual living expenses of the investor, the payable tax will be calculated at 30% of CHF 600,000 annually.
Obtaining a Swiss citizenship is however not easy. After 12-15 years of residency, a person can apply for Swiss citizenship but the decision to grant citizenship is totally at the discretion of the Swiss government.
Switzerland Real Estate Market and Values
Switzerland is known for its beauty, stability, and favourable banking & tax system. The property market is trusted and has been known for its stable growth over the last 40 years.
Haskew Law offers clients a full range of services related to acquiring a property in Switzerland, offering strict confidentiality during each property acquisition.
Real estate in Switzerland
Switzerland has restricted the acquisition of real estate by foreigners for decades. In principle, all foreigners who wish to acquire Swiss residential real estate must obtain approval prior to their purchase, which will otherwise be invalid. Such approval is relatively difficult to obtain. These restrictions also mean that tax and estate planning options for foreigners wishing to acquire holiday homes in Switzerland are very limited.
For foreigners who hold a Swiss residence permit, it is, however, possible to acquire real estate for their own personal use. Also, the acquisition and holding of purely commercial real estate by foreigners are no longer restricted in Switzerland.
All foreigners who wish to acquire Swiss residential real estate must obtain approval prior to their purchase. A foreigner may be authorised to purchase a holiday home in a place designated by the respective cantonal authorities as a holiday resort. Every authorisation must be deducted from the annual quota assigned to the cantons by the Federal government for holiday homes and hotel condominium units. The cantons and communities can apply their own restrictions which may be even more stringent. Holiday homes and hotel condominium units may only be acquired by physical persons under their own name, and under no circumstances by a company.
As of 2011, there is now one sole area within Switzerland to which all of the above restrictions do not apply, due to a Federal exemption
Since 1997, foreigners holding a Swiss residence permit are allowed to purchase a reasonably sized house or apartment for their personal use with no further need to seek prior approval.
Likewise, foreign-controlled Swiss companies which purchase real estate for use as their own offices or production facilities may do so without restrictions. Foreigners wishing to acquire Swiss real estate and subsequently spend considerable time actually living in Switzerland may find that moving their main place of residence to Switzerland and obtaining a Swiss residence permit is an interesting option to consider.
There are no restrictions regarding the acquisition of purely commercial real estate by a foreigner or foreign entities. As a result, there are again interesting tax planning options for foreigners and foreign entities wishing to invest in Swiss commercial real estate. Please contact us for further information and advice.
Switzerland is undoubtedly one of the most attractive countries in the world to live. An ideal combination of political and economic stability, a clean and safe environment and relatively low tax rates make it the ultimate place of residence. The possibility of lump-sum taxation, extremely low inheritance taxes, as well as the high degree of privacy and personal security enjoyed by its inhabitants, make Switzerland the residence of choice for many celebrities and wealthy individuals.
- Political, social and economic stability
- Multi-lingual, highly qualified and motivated workforce
- First-class infrastructure, excellent banking facilities
- Very attractive lifestyle and healthy environment
- Efficient and reliable public services
- Possible fiscal incentives for substantial investments
- Favourable taxation system with moderate tax rates
Many of the world's major companies have chosen Switzerland as the location for their global, European or regional headquarters, their international finance companies or research and development facilities. Some examples are Amgen (European headquarters) in Lucerne, Kühne & Nagel (international holding) in Schwyz, Philip Morris (European headquarters) in Vaud, Compaq Computers (European headquarters) in Kloten/Zurich, or the IBM research laboratory in Rueschlikon/Zurich.
But Switzerland is keen to attract not only large corporations but also small and medium-sized enterprises and private entrepreneurs. Switzerland is business-friendly by tradition and offers a solution for every need and expectation. Switzerland's 26 cantons offer companies a wide range of opportunities. The advantages associated with Switzerland are complemented 26 times over by other advantages specific to each of these locations. Through its independent and well-established Swiss subsidiary, Henley & Partners assists foreign corporations and investors to find the ideal location for their business in Switzerland.
The Swiss tax system is very much in line with the country's reputation as a centre for international trade and finance. Many tax privileges have been introduced in order to entice foreign investment in Switzerland, while there are very few restrictions on Swiss investment abroad. Switzerland also has an extensive network of treaties for the avoidance of double taxation. As a result of recent corporate tax reforms, doing business in Switzerland has become even more attractive as the tax system has been further improved. Also as a result of these reforms, the Swiss holding company gained again attractiveness and ranks today among the best holding jurisdictions in the world.
Switzerland is often perceived as a very expensive country and accessible only to wealthy individuals and large companies. However, the overall cost of living and doing business in Switzerland compares very favourably with Germany, France, the Netherlands or the USA. What counts is what you get: State-of-the-art transport, communications, energy supplies and waste disposal systems cost no more in Switzerland than the price paid elsewhere for traffic congestion and environmental degradation.
When establishing a new business or subsidiary in Switzerland, you may opt for a branch office or a separate legal entity in the form of either a limited liability company or a stock corporation. Click here for an overview of key features of these main types of companies
Banking and insurance are the foundation of Switzerland's financial system, which is arguably the most solid in the world. Swiss banks and insurance companies are extremely safe as the entire Swiss financial industry is tightly regulated. By providing sophisticated services to businesses as well as to discerning investors, by offering financial privacy, and through their solid reputation, safety and worldwide presence, Swiss banks and insurance companies are unique.
Switzerland Corporate Services For Investors
Switzerland is a preferred jurisdiction for company registration because it offers reliability, respectability and privacy, together with limited liability and tax privileges. , which is under The Swiss Constitution guarantees economic freedom and allows anyone, including foreign nationals, to form or hold an interest in a Swiss company. The form generally used by foreign investors is the Stock Corporation (“Societe Anonyme” or “Aktiengesellschaft”), particularly certain specialised forms that offer tax-privileged treatment:
A Swiss Holding Company is an entity whose primary purpose is to hold and manage financial investments in affiliated companies. Under Swiss tax law, a Holding Company should not conduct any other business activity in Switzerland. Providing certain conditions are met, income or gains arising from qualifying participations are effectively exempt from Swiss federal and cantonal taxes. Due to Switzerland’s extensive Double Tax Treaty network, a Swiss Holding Company is an ideal vehicle for the consolidation of worldwide investments and participation.
Swiss Mixed Companies are entities whose business activity is primarily (at least 80 % of both sales and purchases) related to business outside Switzerland. The use of Mixed Companies can result in savings in corporate income tax levied on income and capital gains and they are widely used for international trading and tax planning. The federal tax of 8.5% will be applied to income, but cantonal tax will only apply to Swiss-bound income to give an overall rate that will generally not exceed 10%.
A Swiss Domiciliary Company is an entity that carries on purely administrative functions in Switzerland and has practically no Swiss revenue (under 5%). Auxiliary companies outside Switzerland may conduct any activities. The auxiliary companies’ tax regime is only available at the cantonal level and varies from canton to canton, but generally, income from qualifying participations is tax-exempt and only a portion of income from abroad is subject to Swiss tax. Revenues and expenses of Domiciliary Companies are apportioned among various categories, each subject to different taxation rules.
Sovereign provides ready-made or customised incorporation of all types of Swiss companies. To enjoy the benefits under certain Double Tax Treaties (e.g. no or much-reduced withholding tax on dividends with Hong Kong and Singapore) it is often prudent to use such a foreign company as a shareholder. Sovereign can also provide such International Companies on a global basis.
Once incorporated, we provide a domiciliary service, which includes the provision of company secretarial, registered office and nominee shareholder services. All Swiss companies must register with the Federal Commercial Registry Office, which maintains a freely accessible database (www.zefix.ch) with information on trade names, registration numbers and legal domiciles. To avoid being publicly identified as a shareholder, Sovereign can register a trust company that has a non-registered trust agreement with the beneficial owner.
Full management services from our own licensed corporate directors are also available and highly advisable in most cases. Re-mailing services are available at modest cost for all companies established by Sovereign.
In addition to providing incorporation, domiciliary and management (directorship) services, a range of ancillary services at competitive prices is available on request. These services include but are not limited to provision of dedicated telephone lines; office and personal assistance; designated staff members (temporary or permanent availability); assistance with office relocation, introduction to real estate agents, government agencies and other third parties
There is no Swiss substantial law on trusts and therefore no provision for a Swiss domestic trust. However a trust can be established under foreign law and, since 2007 when Switzerland ratified the Hague Convention, trusts are recognised as a legal structure. In 2007, the Swiss Tax Conference issued circular No. 30 on the taxation of trusts for cantonal/communal income tax purposes and the Federal Tax Authorities issued a similar circular with respect to federal income tax. Generally, the trust itself is never subject to tax due to a lack of legal personality. Furthermore, trust assets and income cannot be attributed to the trustee or the protector. Therefore, trust a Swiss resident trustee can manage assets without triggering a tax liability on the trust assets and income. However, in certain cases, Swiss residents will be liable to tax on the assets as well as the income.
Switzerland: Facts and Information
Switzerland Fact File
Location: Switzerland is located in Western Europe and it shares borders with Germany, France, Italy, Austria and Liechtenstein.
Capital: Although there is no formal capital city of Switzerland, Bern is often considered to be the capital.
Population: 8 million (approx)
Area: 41,285 km sq
Currency: Swiss Franc
Official Languages: German, French, Italian and Romansh
The Swiss flag can be both shaped like an oblong (as above) or square-shaped. It has been used as the national flag, in its present form, since 1889.
Other Facts About Switzerland
- Switzerland is landlocked – it doesn’t have any coastline.
- It is one of the richest countries in the world.
- Although the landscape of Switzerland is dominated by the Swiss Alps, most people live in a region known as the Swiss Plateau – a partially flat area between the Alps and the Jura mountain ranges.
- Two of the cities in Switzerland – Geneva and Zurich – are internationally important financial centres.
- Switzerland has traditionally been thought of as a neutral country. Switzerland wasn’t involved in World War 1 or World War 2 and it hasn’t been in a state of war since early in the nineteenth century.
- There are more than 1500 lakes in Switzerland, including Lake Geneva (which is also in France) and Lake Constance (which is also in Germany and Austria).
- The highest mountains in Switzerland are Monte Rosa (4634 metres) and the Matterhorn (4478 metres).
- Switzerland is a member of the United Nations (it joined in 2002) but it’s not a member of the European Union.
- The Red Cross began in Switzerland, and its symbol is the Swiss flag in reverse (a red cross on a white background).
- The headquarters of the Nestle company is in Switzerland.
- Switzerland is one of the world’s largest exporters of watches.
- Johanna Spyri, the author of Heidi came from Switzerland.
- Winter sports, such as skiing, snowboarding and mountaineering, are incredibly popular in Switzerland.
- Football (soccer) and ice hockey are also popular in Switzerland.
- Tennis stars, Martina Hingis and Roger Federer, are both Swiss.
- Switzerland is known for its cheese (Emmental and Gruyere).
- People from Switzerland eat more chocolate than anyone else in the world. Swiss chocolate is famed for its high-quality.