Frequently asked questions – Settling and living in Switzerland – Tax authorities
Switzerland is a very attractive place to live and work for many non-Swiss nationals. It offers incredible landscapes as well as a number of world famous cities such as; Bern, Geneva, Lausanne and Zurich. It also offers an attractive tax regime for both individuals and businesses, under the right circumstances.
We interview Thierry Groppi in our office in Dixcart, Switzerland, about what it’s like to move to Switzerland and live there. Thierry is the Business Development Manager of our Dixcart office in Switzerland.
How long can individuals stay in Switzerland as tourists?
I am often asked this question.
Non-Swiss nationals are allowed to stay in Switzerland as tourists, without registration, for up to three months. After three months, if they plan to stay in Switzerland, they must obtain a work and/or residence permit and formally register with the Swiss authorities.
What is the labor situation in Switzerland?
There are three ways to obtain the right to work in Switzerland:
- Be hired by an existing Swiss company.
- Create a Swiss company and become a director or employee of the company.
- Invest in a Swiss company and become a director or employee of the company.
When applying for a work and/or residence permit in Switzerland, it is important to note that different regulations apply to EU and EFTA nationals compared to other nationals, so it is worth checking .
The most popular route is certainly that of individuals setting up a business in Switzerland. Indeed, EU/EFTA and non-EU/EFTA nationals can set up a company, be employed there, reside in Switzerland and benefit from an attractive tax regime.
What is the minimum investment required for residence in Switzerland, when setting up a company by a non-EU/EFTA citizen?
The company must submit a business plan detailing how the amount invested in it will generate a turnover of at least 1 million francs per year, in the “near future”, and the business plan must show that the company will achieve this turnover in a certain number of months, not necessarily the first year (especially if the company is a start-up).
Can individuals obtain Swiss residency by investing in real estate?
No, Switzerland does not offer a real estate investment program.
Non-Swiss nationals can only obtain residency in Switzerland through the “Swiss Business Investment Programme”, detailed above or through the Swiss flat rate tax system.
Swiss-based real estate can be purchased after obtaining a residence permit. Quotas may apply to non-Swiss nationals with regard to owning a second home in Switzerland.
What is the Swiss flat rate tax?
The Swiss flat tax system is extremely popular. This annual fee is based on the applicant’s “expenses” (not income), which is usually calculated as 7 times the applicant’s annual rent.
A tax rate is then applied to the expenses of the individual and depends on the canton. The tax rate is generally between 21% and 46%, depending on the agreement with the competent cantonal tax administration.
Deemed minimum expenses are detailed by many cantons, some of which are listed below:
- Aargau – CHF 400,000
- Bern – CHF 400,000
- Geneva – CHF 600,000
- Freiburg – CHF 250,000
- Lucerne – CHF 600,000
- Ticino – CHF 400,000
- Schwyz – CHF 600,000
- St. Gallen – CHF 600,000
- Uri – CHF 400,000
What are the advantages of living in Switzerland?
There are so many advantages to living in Switzerland.
It has, and continues to be, one of the most sought after countries to live in the world. It’s a safe and neutral country, it has a high standard of living and education, there are a variety of multicultural cities and it’s a beautiful country with pristine lakes and the Alps as a backdrop.
It is also excellent for business. Business is good for investment in Switzerland and there is an excellent banking system.
How can an individual become a Swiss citizen?
An EU or non-EU/EFTA national must have lived in Switzerland for at least 10 years to be able to apply for a Swiss passport.
However, if an EU or non-EU/EFTA national is the spouse of a Swiss national, it suffices that he has lived in Switzerland for 5 years.
A child of a Swiss national (under the age of 18) will automatically obtain Swiss nationality.
What reputation does a Swiss passport have?
A Swiss passport is highly respected around the world. It ranks high in the world passport rankings for visa-free travel, with Swiss citizens able to travel visa-free to 172 countries.
Which cities are well known and where it is good to live?
Geneva, Zurich, Bern, Lausanne, Basel, Lucerne and Lugano are some of the best known cities in Switzerland and are certainly the most popular in terms of where people live after moving to Switzerland.
Which languages are widely spoken in Switzerland?
English is spoken everywhere, as well as the three national languages: French, German and Italian.
Is Switzerland in Schengen?
Yes, Switzerland is a signatory to Schengen, allowing the free movement of Swiss nationals within the EU. A Swiss residence permit also allows free movement within the Schengen countries.
Does Switzerland have tax treaties?
Yes, Switzerland has a large number of tax treaties, just over 100 in total.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.