Switzerland About two third of the area of Switzerland is covered with forests, lakes and mountains. Since Switzerland has no mineral resources, it must import, process and resell them as products. "Services" are the most important part of the economy. This includes banking, assurances and tourism.
Farming is also an important part of the economy. But the production of the Swiss farmers does not fulfil the needs of all people, so Switzerland must rely on imported goods from other countries.

Switzerland’s existence as a modern federal state dates back to 1848. The government is made up of seven members, elected by the Federal Assembly. The government members take it in turns to act as president. The Swiss people can influence political affairs through the highly developed system of direct democracy.
Switzerland’s position as a neutral state allows it to play an important humanitarian role in world affairs and to act as a mediator between conflicting parties. Switzerland is not a member of the EU or EEA

Switzerland and Europe includes links to Swiss government sites and tourist information.

Property Buying Foreigners: For many years it was forbidden to buy property in Switzerland unless you were a Swiss citizen. For many foreign investors this was regrettable, as Swiss property is a very attractive and secure long-term investment.

The Swiss Government has now changed the laws, and at last foreigners are allowed to invest in Swiss property when it is perceived to be for the public good. Now you can buy new, low-rental apartment buildings, obtain a government subsidy and a tax break for 20 years, and make an annual cash yield of 5%. Mortgages are available, but the minimum cash investment should be around SFR 500,000. If you wish to make an investment in Swiss property, you can easily do so by setting up an incorporated company expressly for this purpose.

Acquisition Laws: The acquisition of property by foreigners is regulated by the Federal Law on the Acquisition of Property by foreign citizens (originally called Lex Friedrich, and now called Lex Koller). The Lex Koller requires a foreign citizen to obtain a permit from the appropriate cantonal and federal authorities before buying property in Switzerland.

Scope of the Regulation: "Foreigners" in the sense of the Lex Koller can be individuals as well as legal entities.

  • The Lex Koller defines individual persons as being either foreigners domiciled abroad, or foreigners that are in fact domiciled in Switzerland but are neither nationals of EU/EFTA member states nor holders of a valid settlement permit (authorisation d'etablissement/ Niederlassungsbewilligung or so-called C permit).

    This means that nationals of EU/EFTA member states domiciled in Switzerland (in particular EU/EFTA nationals with a residence permit EU-EFTA (authorisation de séjour/Aufenthaltsbewilligung or so called B permit) or a settlement permit EU-EFTA or, possibly, with a short residence permit EU-EFTA) as well as nationals of other foreign countries who are holders of a valid settlement permit (C permit) and are actually domiciled in Switzerland, are not subject to the "Lex Koller". With respect to the acquisition of property their position is equal to that of a Swiss citizen.

Legal entities: are considered "foreign persons abroad" if they are either domiciled abroad or are controlled by persons abroad. Control of a legal entity by foreign persons abroad is deemed where such persons abroad:

a) own more than one-third of the company's equity capital

b) dispose of more than one-third of the voting rights, whether directly or indirectly, in the shareholders' meeting of the company; or 

c) provide the company with repayable funds representing more than one half of the difference between the company's assets and its debts vis-à-vis persons that are not subject to the Lex Koller.

The term "acquisition of property" encompasses not only the direct purchase of property but also the acquisition of property rights (rights in rem) on the property as well as the procurement of a right of ownership or usufruct of a share of a legal entity with more than one third of its total assets consisting of Swiss property, provided that foreign persons abroad thereby obtain or reinforce a controlling position in such entity.

Permit Requirements: In general, every acquisition of property by foreign persons abroad as defined above requires a permit unless the specific acquisition is subject to an exemption.

 

Main Residence: Permission is not required for the acquisition of property for private residential purposes by an individual foreign person, provided that such a property serves the purchaser as their main residence at the place of their rightful and actual residence, and provided that the purchaser actually lives there (renting out is not allowed). 

Consequently, such person must have an adequate permit to stay. If building land is acquired, construction work on the accommodation (their main residence) must start within one year. Furthermore, the surface area of the purchased lot may not be larger than required by its purpose. The competent cantonal authorities will decide on the admissibility of lots larger than 3,000 square meters. 

In the event that the buyer changes their place of residency, they may dispose of his dwelling as they see fit: 

  • sell it
  • continue to use it as a secondary or holiday residence
  • rent it to third parties. 

Even if a person buys a new home at the new place of residency, they are not forced to sell the old main residence.

As outlined above, nationals of EU and EFTA member states domiciled in Switzerland as well as holders of a valid settlement permit (C permit) are not qualified as "foreign persons abroad" in the sense of the Lex Koller. Therefore, the above is only relevant for nationals of other foreign countries residing in Switzerland based on a residence permit (B permit).

Secondary Residence: Nationals of EU/EFTA member states working as cross-border commuters in Switzerland (while remaining domiciled in the respective neighbouring foreign country), may acquire a secondary residence in the area of their place of work without authorisation. For as long as the purchaser continues working in the area as a cross-border commuter, they must occupy the residency themselves.

The acquisition of a secondary residence by a foreigner domiciled abroad who is not a cross-border commuter is, however, not possible without authorisation. Still, there are a few Cantons that have introduced special provisions according to which a foreigner domiciled abroad who is not a cross-border commuter may be authorised to acquire a secondary residence in a place with which he has exceptionally close ties worthy of protection. 

The Canton of Zürich has introduced such provisions. However to date, neither the Canton of Vaud or the Canton of Geneva have done this.

Holiday Homes: Each Canton may introduce provisions which authorise individual persons abroad to acquire holiday homes. 

In Cantons that did not introduce such provisions an acquisition of holiday homes/hotel condominium units by foreign persons abroad is therefore not possible. Furthermore, the Federal law (Lex Koller) contains provisions regarding the amount (quotas) and the location (designated holiday resort areas) of such homes/units. As a result, the acquisition of such homes/units is only possible in certain municipalities. 

As a general rule, the net floor space in holiday homes and hotel condominium units must not exceed 200 square meters. In addition, the acquisition is subject to the condition that the home/unit is used for holiday purposes only and will be sold as soon as it is not used for such purpose anymore. However, holiday homes may be periodically rented out. Hotel condominium units must be made available to the hotel owner for hotel operations, especially during high season.

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may also vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.

22-10-2009