Switzerland is undoubtedly one of the most attractive countries in the world to live in. 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, extremly 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 indivduals. Investors and entrepreneurs as well as persons of independent means would normally have no problem obtaining a residence permit.

One option is to establish a company in Switzerland which then employs the individual seeking residence. Switzerland is keen to attract small and medium-sized enterprises as well as large corporations. The advantages associated with Switzerland are complemented by other benefits specific to each canton. Even tax breaks may be available if the business is going to be sizeable and create numerous jobs. In addition to these advantages, personal and corporate taxation in certain cantons of Switzerland is among the lowest of the OECD countries. Alternatively, you may obtain a Swiss residence permit if you are financially independent, over 55 years of age and can show evidence of close ties to Switzerland, although depending on the canton, the latter two conditions do not always have to be met. You may then avail yourself of a lump-sum taxation arrangement (Pauschalbesteuerung, forfait fiscal), instead of the usual taxation on worldwide income and assets. This special taxation arrangement - but not the granting of the permit, which also has to be approved by the Federal authorities - is negotiated on an individual basis and is decided on by the cantonal authorities.

Vevey, Lake Geneva

For an overview of the various types of residence and work permits issued to foreigners in Switzerland, please click here.

If you hold a Swiss residence permit you are allowed to acquire residential real estate for your own personal use. For more information about real estate in Switzerland, please click here.

Tax-advantaged residence, lump-sum taxation and the use of pre-immigration trusts in Switzerland by Christian H. Kalin, Henley & Partners, Switzerland Trusts and Trustees, September 2002 To download a PDF version of this article, please click here. To view a html version of this article, please click here.

EU citizens may take up residence in Switzerland

Since the new bilateral agreements between Switzerland and the European Union have come into force 1 June 2002, for any financially independent EU citizens it is now possible to become resident in Switzerland. Besides sufficient funds they need to show adequate health insurance, and are of course not allowed to work in Switzerland. Regardless of the canton they wish to live in, there is no age requirement and no need to show evidence of close ties to Switzerland. Nevertheless, they may avail themselves of a lump-sum taxation arrangement (Pauschalbesteuerung, forfait fiscal), instead of the usual taxation on worldwide income and assets. This special taxation arrangement is negotiated on an individual basis and is decided on by the cantonal authorities. This makes Switzerland an even more attractive place of residence for financially independent persons from all over the EU who wish to relocate to a milder tax climate.

Low Personal Taxation - Limited or No Gift and Inheritance Taxes

Personal taxes in Switzerland vary depending on the canton and community in which an individual resides, works or has otherwise invested. While Swiss Federal tax applies throughout the country, each canton has its own tax system and sets its own tax rates. Regular taxation is already reasonable, but foreigners who establish their residence in Switzerland for the first time (or after an absence from the country of at least 10 years) may benefit from a lump-sum taxation arrangement and pay a fixed amount of tax each year, provided they do not work in Switzerland. In practice, this amount is based either on their rental payments or on the rental value of their property in Switzerland, and has no relation to their actual worldwide income or assets. Your taxable income is calculated as five times this annual rent. You then pay the normal tax rate for the town and canton in which you live. This amount is the lump-sum tax payable to the tax authorities and represents your total tax liability. There are considerable differences between cantons and even between individual communities. Furthermore, there are many issues to be considered when calculating the tax liability of a particular person, especially if he has further assets in Switzerland or an interest in using the country's double tax treaties to obtain a refund of taxes paid abroad.

Switzerland is also an attractive place of residence with regard to inheritance taxes. The country has no Federal inheritance or gift taxes. Instead, the cantons levy inheritance and gift taxes in their own competence. The Canton of Schwyz dispenses entirely with inheritance or gift taxes, and many cantons do not levy inheritance taxes between spouses or between parents and children. For more information about taxation in Switzerland, please click here.

Campione d'Italia - The Best of Switzerland and Italy

Residence in the Italian enclave of Campione d'Italia may occasionally also be a viable option to practically establish yourself in Switzerland. Resident foreigners enjoy most of the advantages of Switzerland and Italy while paying almost no tax.

Some of the many advantages of 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

To find out more about the possibilities of residence and business opportunities in Switzerland, contact Henley & Partners. Through our offices in Zurich and Zug, we are best positioned to advise and assist you with all matters regarding Switzerland.

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Telephone +41 44 266 22 22   Facsimile +41 44 266 22 23

Poststrasse 6   6300 Zug
Telephone +41 41 729 63 63   Facsimile +41 41 729 63 64

 

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