Switzerland is not part of the EU but together with Iceland, Liechtenstein and Norway forms the European Free trade Association (EFTA). This is united with the EU through the European Economic Area (EEA) to create a free market between all the countries of the EU and EFTA.
Switzerland is also one of 26 countries making up the ‘Schengen’ area: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden. They have one common visa and no border controls between them, so any of these nationalities can travel freely to Switzerland.
The client is, generally, eligible for a Swiss residence permit if his presence in a Swiss Canton is of “economic interest” to the Canton. Such economic interest is typically given if a lump‐sum taxation at a certain financial level is agreed upon with the local tax authorities.
As a non‐Swiss citizen, the client is, generally, eligible for lump‐sum taxation, however, as the lump‐sum taxation is only available to persons not exercising a professional activity in Switzerland, the client’s activities will need to be reviewed in more detail and need to be discussed on a case‐by‐case basis with the local tax authorities.
Based on the total wealth of the client and his annual expenses, we believe that a lump sum amount of between CHF 200,000 (cantons of Neuchatel/Fribourg) and CHF 400,000 (cantons of Lucerne/Zug/Schwyz) is achievable.
No need to declare worldwide income and assets under annual lump‐sum taxation regime. No capital gain tax, except on sale of Swiss real estate.
- Free access to all Schengen states
- Comprehensive tax treaty network
- One of the best standards of living and health care facilities
- Politically stable and secure environment
- Good and almost free education system and universities
Key conditions in practice:
- Lump sum taxation – where available or
- Employment contract for at least 12 months or proof of self‐employment in case of no professional activity, proof of ability to sustain one’s living as well as existence of health insurance
Validity & renewability of residence permit:
- EU/EFTA citizens: 5 years (B permit). After 5 years, a permanent residence (C permit with no limit on validity) can be applied for. But
- Subject to the holder (and family residence permit) visiting Switzerland once every 6 months
Required legal presence “Day counting”
- Formally: 180 days per year
- In practice: Can be less if special persona situation applies
- Annual tax filings: mandatory
- Income tax: levied at federal. Cantonal and municipal level. Rates for federal tax are progressive up to 11.5%. Cantonal and municipal tax rates vary. Not applicable to HNWI eligible for lump‐sum taxation.
- Capital gain tax: none, except on sale of Swiss real estate
- Wealth / net worth tax: Levied at the cantonal and municipal level
- Gift / inheritance tax: based on the canton of the domicile chosen, not applicable for all cantons
Processing fee is approximately CHF 20.000