Many of our entrepreneur clients currently ask us how they could relocate to Switzerland, either alone, with their businesses or with their families.
Switzerland continues to enjoy a reputation of combining highest living standards with political stability, security, AAA financial status by Fitch and Moody’s, a top education system with the best universities in the world and – despite the OECD minimum tax initiative – an attractive tax and “open for business” environment, with lots of top talent available thanks to the bilateral treaties with the EU and an employer friendly, flexible labour law. This appeals especially to an internationally oriented, active and successful, mobile clientele.
1. Why now?
By comparison, Switzerland has remained attractive during crises like Covid and politically stable in today’s circumstances, as inflation is in check.
Home to the headquarters of many industrial giants from Nestlé to Novartis, Roche to ABB, it is considered a business hub also for modern companies like Google.
The resilient health care system, the world class universities, the citizen-orientated principal attitude by the government are perceived as additional reasons to relocate now.
With 40’000 km2 size, the country offers a beautiful landscape with Mediterranean warmth in Ticino to polar climate in the Alps, with many rivers, lakes and forests.
Thanks to international flight connections and being ideally situated in the heart of Europe, all European business cities are quickly within reach and direct flights to Los Angeles and Beijing and other global hubs are daily available.
2. EU/EEA citizens
EU/EEA citizens have a privileged status in Switzerland under the so-called bilateral agreement. Citizens with professional activities, an employment contract for more than a year with a Swiss employer or who are running their own business, are eligible for a residence permit.
EU/EEA citizens without professional activities need to prove that they have sufficient financial means, health care insurance and adequate accommodation.
3. Non-EU/EFA citizens
For Non-EU/EEA citizens residence permits can be granted for retired persons from 55, for medical and educational reasons and of course for business reasons.
Notably, entrepreneurs who arrive with their businesses in Switzerland and create jobs may obtain residence permits for themselves.
Since Brexit, UK citizens belong to the Non-EU/EEA category.
In principle, Switzerland tax advantages are low tax rates, cooperative attitude of tax authorities and advantageous lump sum tax agreements for UHNWI.
There are nearly 90 international tax treaties to benefit from and there are exceptions for real estate, trusts and majority interests in companies.
There is income and wealth tax. For foreign taxpayers, forfeit tax packages can be negotiated pre-arrival (“lump-sum taxation”).
As widely known, tax rates can vary a lot not only between cantons but also municipalities.
This is referred to as “Swiss tax competition” and ensures that tax rates are kept as low as possible throughout the country.
The lowest tax rates are seen in Zug, Schwyz and neighbouring Liechtenstein starting 12% (15% in 2024) for companies and 22% for individuals.
Some cantons offer incentive schemes for corporates to move to Switzerland.
5. Inheritance, Trusts & Foundations
In most Swiss cantons and on federal level, there is no inheritance tax between spouses and direct descendants, also no gift tax.
Switzerland and Liechtenstein recognise trust and foundation under foreign law (signatories of the Hague convention) and since 2007 cantonal practices have been harmonised in trust taxation. Trust companies in Switzerland are regulated by FINMA (2023). It greatly depends on whether the trust is irrevocable and discretionary and certainly pre-arrival planning is advisable for foreigners considering relocation to Switzerland. Under any circumstances, professional tax and family law advice should be sought prior to becoming a Swiss resident. Swiss foundations are usually used for tax exempt charities.
There is a worldwide leading and favourable legislation for Fintechs in Switzerland and neighbouring Liechtenstein with excellent reputation. Since this 2021, Switzerland has a legal framework for distributed ledger technologies, for instance the blockchain system. Again, advice should be sought before arrival and before establishing a new Fintech. Under Swiss laws for banking and financial services there is available “a bank license light” and in Liechtenstein licenses for various blockchain providers.
7. Real estate
For non-Swiss nationals generally a Swiss residency permit is required to purchase residential real estate in Switzerland.
Interestingly, the purchase of commercial and industrial real estate in Switzerland is not restricted.
In certain cantons it is possible to purchase a holiday home without Swiss residency permit which has been proven a good start for many newcomers to Switzerland.
Please feel free to contact us for more information, we are happy to help