Swiss Investor Visa
The country of Switzerland has long been regarded as one of the best nations to bank with due to their fabled and famous banking secrecy policies. Divided into 26 cantons, Switzerland is a federal parliamentary republic. Along with financial privacy that is second to none in the world, Switzerland also offers beautiful terrain including the famed Swiss Alps, a diverse culture and universal healthcare. These and other benefits make Switzerland an attractive option for foreign retirees and investors seeking to take advantage of Swiss financial privacy protections.
Retiring in Switzerland
To encourage wealthy foreign nationals to relocate to Switzerland, the country offers a special tax program wherein Swiss taxes are levied not on the basis of the individual’s worldwide income and assets, but rather on the basis of the individual’s actual expenses and standard of living in the nation. This program, called lump-sum taxation (LST), exists in all of the Swiss cantons because it was made a federal law in 1990.
In order to benefit from the LST law, the foreign national must not be employed in Switzerland. Although there are no age requirements or restrictions for the LST, all foreign nationals who want to qualify for LST must be Swiss residents. Since many foreign nationals obtain Swiss residency through employment, LST is typically utilized by those foreign nationals who are able to retire in Switzerland.
To retire in Switzerland, the foreign national can obtain a permanent resident permit if the national is over 55 years old, has demonstrable close ties to Switzerland (such as previous visits, Swiss family members, heritage, etc.), can prove that the retiree will not be procuring or performing gainful employment, and can prove that the retiree possesses sufficient financial resources to live in the country without turning to public assistance programs.
With the LST program, the Swiss tax agencies typically require the retiree’s tax payment to be at least five times the annual rent for that the retiree pays for his/her residence in Switzerland. All cantons have implemented minimum tax amounts and in some cantons the minimum amount is higher for non-EU citizens than the minimum for EU citizens. If the retiree owns the residence, then the tax assessment is made by calculating what the rental value would be for the residence.
One of the reasons why the LST program is so popular with foreign nationals is because under this initiative, the foreign national is not required to declare the national’s worldwide income or held assets, thereby offering a greater level of financial privacy.
LST for Non-Retirees
For all intents and purposes, it seems that there is an age restriction to qualifying for LST because the foreign national seeking to benefit from the LST cannot be employed in Switzerland. However, persons who do not qualify for retirement in Switzerland because they do not meet the age requirement may still qualify for LST if they agree to pay a specific minimum amount in annual taxes. This minimum amount varies from canton to canton. In order to obtain the Swiss residence necessary to qualify for LST, the foreign national may establish a company in one of the Swiss cantons which would allow the national to receive a residence permit. (Please note carefully that the cantons vary greatly in their decision to grant resident permits to persons under 55 years old).
Additional Tax Benefits
Along with the LST program, Switzerland’s other tax benefits include no federal gift or inheritance taxes. In place of these federal taxes, each of the different cantons assesses its own taxes for gifts and inheritances. Moreover, Switzerland offers pre-immigration trusts that can be constructed for tax planning purposes before the retiree of foreign national even arrives in the country.
Knowledgeable immigration attorneys are available to help guide interested retirees and foreign nationals trhough the Swiss immigration process.
