Residence in Switzerland for Investors and Financially Independent Persons

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, 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. 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 –

For an overview of the various types of residence and work permits issued to foreigners in Switzerland please see the annex1 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 see the annex2 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 see the annex3

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.