Residency By Investment In Switzerland
Switzerland is 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 is no longer restricted in Switzerland.
Acquisition of residential real estate by foreigners not resident 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
Acquisition of residential real estate by foreigners resident in Switzerland
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.
Acquisition of commercial real estate
There are no restrictions regarding the acquisition of purely commercial real estate by 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 - the ultimate place of residence
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.
Some of the many advantages of owning a home in Switzerland include:
- 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
Business Location Switzerland
At Henley & Partners' Swiss offices we are best positioned to advise and assist you in all matters regarding doing business in Switzerland. Indeed, we have assisted many foreign clients - private entrepreneurs as well as multinational corporations - in establishing operations in Switzerland and are providing legal as well as administrative and support services on an ongoing basis.
An excellent business environment
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.
Moderate taxation, but first rate infrastructure
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.
Company Types in Switzerland
When establishing a new business or subsidiary in Switzerland, you may opt for 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
Swiss Banking and Insurance
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.
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