Getting Swiss Residence

NOTE: The information provided below is for guidance purposes only. It does not substitute the legal advice which is recommended to obtain from the Cantonal migration authority responsible for your place of residence, tax adviser and specialized local attorney. All the information provided below is believed to be from reliable sources, however Sequoia Consulting Sagl does not guarantee it’s completeness and accuracy and does not accept any liability for losses that might arise from making use of this information. If nothing is indicated to the contrary, all figures are unaudited. All the content provided herein can be modified or completely deleted at any time without any notification.

Every foreigner wishing to set up residence in Switzerland with or without any gainful activity must obtain a Swiss residence permit.

For gainful activity: the residence permit is necessary from the first day of activity.

Without gainful activity: the residence permit must be obtained after a continuous staying in Switzerland for longer than 90 days (3 months), even for EU/EFTA citizens.

Different conditions apply for EU/EFTA citizens than for non-EU/EFTA citizens:

For EU/EFTA citizens, to receive a Swiss residence permit with or without gainful activity is rather easy process thanks to Agreement on Free Movement of Persons (AFMP) between Switzerland and EU that allows EU citizens to live and work freely within the EU and Switzerland. 

For non-EU/EFTA citizens, the process of obtaining a Swiss residence permit is much more complicated and even impossible in some cases. The possibilities will be described above. . 

Types of Swiss residence permits

EU*/EFTA** nationals Non-EU/EFTA nationals
  • Permit L EU/EFTA (short-term residence permit)
  • Permit B EU/EFTA (residence permit)
  • Permit C EU/EFTA (settlement permit)
  • Permit Ci EU/EFTA (residence permit with gainful employment)
  • Permit G EU/EFTA (cross-border commuter permit)
  • Permit B (temporary residence permit)
  • Permit C (settlement permit)
  • Permit Ci (residence permit with gainful employment)
  • Permit G (cross-border commuter permit)
  • Permit L (short-term residence permit)
  • Permit F (provisionally admitted foreigner)
  • Permit N (permit for asylum seekers)
  • Permit S (people in need of protection)
*The EU-27 comprises the following countries: Belgium, Bulgaria, Denmark, Germany, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, the Czech Republic, Romania, Sweden, Slovakia, Slovenia, Spain, Hungary, the United Kingdom and Cyprus.
**EFTA: Iceland, Liechtenstein, Norway, Switzerland
 

Permit B (temporary residence permit) – residence permit for a one-year stay in Switzerland, which can be renewed (for EU/EFTA nationals: valid for 5 years). With permit B you can buy a residential real estate as your place of domicile.

Permit C (settlement residence permit) – permit granting full residence rights in Switzerland, which is obtained after 5 years of continuous living in Switzerland for EU/EFTA nationals and after 10 years for non-EU/EFTA nationals. With this permit you can live anywhere you like in Switzerland and buy as many properties as you wish.

Permit G (cross-border commuter permit) – this permit is for those who work in Switzerland but live in another country. This is an annual permit that can be renewed each year. It does not grant you any residential rights and cannot be converted to a residential permit. EU/ EFTA nationals with G permit can buy a secondary residence within the area of their work in Switzerland without authorisation.

Permit L (short-term residence permit) – valid for up to one year. If you have a work contract for less than 12 months, the permit lasts as long as the contract. (EU/EFTA nationals don’t need a permit if they are working for less than 3 months.) This permit is often used when coming to Switzerland to look for work or for educational courses.

Exists several ways of getting up residence in Switzerland:

1. Lump-sump taxation as way to get Swiss residence permit without gainful activity

In most Cantons of Switzerland foreigners wishing to immigrate in Switzerland can get Swiss residents through a lump-sum taxation regime (also called as expenditure-based taxation). The general rules are regulated by the Federal Government and are uniform throughout Switzerland, although the assessment basis can vary from Canton to Canton. Less than 0.1% of taxpayers are taxed on a lump-sum basis in Switzerland. The highest number of taxpayers in this category resides in the Canton of Vaud, followed by Valais and Ticino. Cantons where lump-sum taxation has been abolished: Zurich, Appenzell Ausserrhoden, Schaffhausen, Basel Landschaft and Basel Stadt. The cantons of Thurgau, St. Gallen, Luzern and Bern are applying stricter rules.

Conditions
Foreigners can benefit from lump-sum taxation if they rae:
  • not Swiss citizens;
  • taking up Swiss residence for the first time or after living outside Switzerland at least 10 years;
  • are not carrying out any gainful activity in Switzerland.

In the case of married spouses, both must meet these conditions. According to current legislation, gainful employment abroad is compatible with asset management in Switzerland.

Duration
Taxpayers can benefit from lump-sum taxation for an unlimited period until the applicable conditions are met. As soon as a taxpayer acquires Swiss nationality or takes up gainful employment or self-employment in Switzerland, his right for lump-sum taxation expires. .
Persons who were taxed on a lump-sum taxation basis prior to January, 1, 2016, can continue to be taxed according to the old legislation for a period maximum of five years. After December 31, 2020,the current legal provisions also apply to these taxpayers.

Assessment Basis
Expenditure-based taxation is a special way of assessing income and wealth that replaces standard taxes on income and wealth. In principle it is calculated on the basis of the total annual living cost during the assessment period expended by the taxpayers in Switzerland and abroad for themselves and their dependents living in Switzerland. However, since January 1, 2016, the following legislative amendments came into force:
  • The worldwide expenses should amount at least seven times the taxpayer’s annual rent or annual deemed rental value (for taxpayers with their own household); for taxpayers without their own household (for example, if the persons lives in a hotel or in a pension): three times the annual full-board price for food and hosing in the place where he is staying.
  • A minimum of CHF 400’000 for direct Federal tax. (Cantons are free to set in their legislation, at their discretion, a minimum cantonal assessment basis.) In canton Ticino for non-EU/EFTA citizens CHF 750’000.
The tax is calculated on the basis of ordinary taxation rates. The assessment basis should be agreed on an individual basis with the tax authority responsible through a tax ruling.

Control Calculation
The law also requires an additional control calculation, according to which the amount of taxes due on the basis of the lump-sum assessment must not be lower than the taxes calculated on the basis of the following gross elements of income and wealth that would be charged to the tax payers according to the ordinary tax regime in Switzerland:
  • Income from real estate assets located in Switzerland;
  • Income of movable property located in Switzerland;
  • Income from copyright, patents, licenses and similar rights undertaken in Switzerland;
  • Income from Swiss bank accounts (interest);
  • Income from Swiss investments (dividends and interest);
  • Income from precious metals in Switzerland;
  • Income from retirement pensions, annuities and other pensions from Swiss sources;
  • Income from foreign sources: income for which the tax payer requires full or partial relief from foreign taxes based on-double taxation agreement between Switzerland and the country where taxes are levied.

Only the following deductions may be made from these gross amounts:
  • The costs of maintaining and managing immovable property located in Switzerland and the costs of the normal management of securities and assets, the income from which is taxed.
  • The deduction of capital debts and debit interest is excluded.


2. Taking up Swiss residence as a self-employed entrepreneur / investor

Non-EU nationals wishing to take up residence in Switzerland as a self-employed must obtain authorization from the cantonal and federal authorities before doing any work on a self-employment basis.
Authorization may be granted if justified on economic grounds, if certain personal, financial and business requirements are met, and if the possible limits on the number of foreign nationals permit. For example, if a person would like to establish a company in Switzerland for nosiness purposes, the company should represent a real economic attractiveness for Canton, be in high-paid industries, create at least 4-10 job positions and provide employment for Swiss nationals. Investment from 1 million CHF is recommended to obtain authorization.

3. Taking up Swiss residence as a specialist/manager

EU nationals are free to travel in Switzerland, live and work here thanks to the agreement between Switzerland and EU about freedom of movement of persons. They don’t need authorization for short-term employment up to 90 days (3 months) within a six-month period. However, it is required to register this employment. For employment lasting longer than 3 months, a residence permit is required before starting to work. EU/EFTA citizens can easily get work residence permit. Work contract and adequate salary are required.
For non-EU/EFTA nationals there are restricted quotas for work permits available, and everyone will need work authorisation to legally work in Switzerland before enter the country. If you are a non-EU/EFTA citizen, you cannot enter Switzerland as a tourist, a visitor or on a business trip, and then start to work. If you want to work in Switzerland, you must leave Switzerland and then apply for work permit from your country. 
Once you have found a job, your potential employer must submit an application for you authorization to work in Switzerland to the cantonal immigration or labour market authorities on your behalf. If the application is accepted, it will be forwarded to the State Secretariat for Migration (SEM) for approval. The SEM will then notify the parties and the cantonal authorities of its decision, but this decision does not constitute authorisation to enter Switzerland.
If you require a visa, the cantonal migration authorities will send a visa clearance confirmation to the Swiss Embassy in your home country. You can then apply the entry visa there. Not later than within 14 days from your arrival and before taking up employment, you must register with the communal authorities in the place of you living. Then you will get your residence and work permit that allows you to live and work in Switzerland.
The authorization to work in Switzerland can be granted to non-EU/EFTA citizens under the following requirements:
  • person get a Swiss work permit when there is in a general economic interest;
  • if there are quotas for work permits for foreigners available;
  • if no one with equivalent qualifications can be found in Switzerland or in an EU/EFTA member state.
  • only managers, highly-skilled specialists or other qualified workers can get authorisation. “Qualified workers” are refer to the holders of higher academic education (i.e. from a university or university of applied sciences), specialist with specific technical expertise and several years of professional experience. Integration criteria will also be taken into account when issuing residence permits: ability to adjust to a new occupational and social environment, language skills and age.
  • Adequate salary and working are also taken into consideration.

4. Taking up Swiss residence for persons over 55 years

The variant is intended for persons over 55 years with sufficient financial funds to live in Switzerland without any gainful activity and who have close ties with Switzerland (visit to the country, business activity, business connections and contacts, education, relatives, friends, etc.)