NEWS AND EVENTS
Switzerland
Switzerland’s political and economic stability, combined with excellent communications and transport links, efficient public services, low tax rates and many more advantages have long made it the ultimate choice for business and residence. Interesting tax planning opportunities are offered by the unique preferential lump-sum tax regime available to foreign citizens who are not gainfully occupied in Switzerland. This makes Switzerland even more attractive as a place of residence for wealthy individuals and families.
For non-EU citizens who are interested in obtaining a residence permit in Switzerland, there is a special Swiss Residence Program (SRP). The program comprises two options: through investment to definite cantons (starting from CHF 1 million) and on the basis of paying an annual lump-sum tax (starting from CHF 100,000 per year).
Under the SRP, Non-EU citizens who meet certain requirements can obtain a residence permit in a straightforward way and for a fixed fee. This is available in most cantons. There are no requirements for business background neither the proofs are required of the recourse of the mean for investment.
Under the SRP, there are two possibilities for obtaining of the residence permit: either as a passive or active investor.
Requirements
Under the Passive Investor Option, the main applicant (hereinafter Applicant) must fulfill the following requirements:
1. The Applicant must be over 18 years old. The Applicant (if married) can bring his/her spouse and any of his/her children under the age of 18 to Switzerland, all in one application.
2. The Applicant and any dependents included in the application must be of good character and have an absolutely clean record, provide certificates of no criminal record, certified copies of passports, CV and, if applicable, business background information.
3. The Applicant should have the University or any equal degree and/or at least 10 years of business experience.
4. The Applicant must undertake to pay a certain amount in net taxes per year, irrespective however of the family’s worldwide income and assets (lump-sum / forfeit taxation). The annual tax depends on which canton is chosen and ranges from CHF 100,000 to over CHF 1.5 million per year. This means that the Applicant and his family will pay the fixed tax rate starting from CHF 100,000, irrespective of the income and assets. The Government guarantees that apart this fixed amount no other taxes are to be paid.
5. The Applicant is to set up a Swiss Company that will be owned by the Applicant and that will be the Applicant’s Employer.
To acquire the residence permit, the Applicant is obliged to pay CHF 200,000 as registration payment that includes all duties and expenses including registration and incorporation of a Swiss company, the first year of its maintenance and all governmental fees for residence permit application. The annual payment for a Swiss company maintenance will be CHF 50 000, the invoice is to be issued in advance and comprises all annual expenses (apart accounting and Company’s expenses and tax deduction the amount of which depends on the canton).
Under the Active Investor Option, the main applicant (hereinafter Applicant) must fulfill the following requirements:
1. The Applicant must be over 18 years old. The Applicant (if married) can bring his/her spouse and any of his/her children under the age of 18 to Switzerland, all in one application.
2. The Applicant and any dependents included in the application must be of good character and have an absolutely clean record, provide certificates of no criminal record, certified copies of passports, CV and, if applicable, business background information.
3. The Applicant should have the University or any equal degree and/or at least 10 years of business experience.
4. The Applicant must undertake to invest a certain amount (at least CHF 1 million, depending on the canton) in a definite project that meet certain economic criteria stipulated by the canton.
5. The Applicant is to set up a Swiss Company that will be owned by the Applicant and that will be the Applicant’s Employer and will serve either as an investment form into the project chosen by the Applicant or will serve as an acting company for personal projects.
Procedures and Timeframe
In order to acquire the residence permit the Applicant undertakes to invest CHF 200,000 (for the category of the Active Investor the amount will be equal to 250,000) that includes all duties and expenses including the registration of a Swiss company and the first year of its maintenance and all governmental duties. The annual payment for a Swiss company maintenance will be CHF 50 000, the invoice is to be issued in advance and comprises all annual expenses (apart accounting and Company’s expenses and tax deduction the amount of which depends on the canton).
Processing of the residence permit generally does not take more than 3 months from the application.
Advantages of Switzerland’s Residence permit
Besides offering unique lump-sum taxation which effectively caps the income and net wealth tax for qualifying foreign citizens, Switzerland is also an attractive place of residence with regard to inheritance and gift taxes. The country has no Federal inheritance or gift taxes.
Swiss real estate has been in high demand by foreign investors for a long time. All foreign citizens 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. In fact, since 1997 foreign citizens holding a Swiss residence permit may purchase a reasonably sized house or apartment for their personal use with no further need to seek prior approval.