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Moving to Switzerland: B/C Permit

Authorisation is required in order to remain in Switzerland for more than three months. Authorisation can be obtained from the cantonal migration offices. A permit can then be issued to foreign nationals who wish to reside in the country for a longer period. The type of permit issued depends on the person’s situation and activity in Switzerland. For onshore operations two permits are recommended:

  • Permit B: issued to foreign nationals residing in Switzerland all year-round, with or without gainful employment.
  • Permit C: intended to so-called “established” foreign nationals, i.e. persons resident in Switzerland for five or ten years who have received a settlement permit. This permit is issued for an indefinite period of time.

Lump-Sum Taxation

Lump-sum taxation is a form of personal income tax, reserved for foreign residents. As the name suggests, this tax consists of a lump-sum tax payment, i.e., a fixed amount of tax to be paid annually, which is not based on an individual’s income or wealth. Instead of an income tax, this is a tax on expenditures, which are estimated on the basis of the annual rent paid by the foreign resident. The lump-sum tax amount generally corresponds to five times the amount of annual rent.

To qualify for the lump-sum tax, candidates must meet the following criteria:

  • Hold a European Union passport.
  • Not trade in Switzerland.
  • Have an annual income greater than 50,000 CHF.
  • Reside in Switzerland at least 180 days per year.

Swiss citizens cannot benefit from this lump-sum tax and are subject to a traditional income tax, which varies per Canton in accordance with the following table:

Cantons Tax rate
Jura 42.28%
Bâle-Champagne 40.78%
Genève 40.68%
Berne 40.44%
Vaud 39.4%
Zurich 39.18%
Tessin 39.11%
Bâle-Ville 37.58%
Neuchâtel 37.35%
Valais 34.97%
Soleure 34.84%
Fribourg 34.54%
Argovie 34.2%
Cantons Tax rate
Thurgovie 33.92%
Glaris 33.83%
Saint-Gall 32.62%
Schaffhouse 32.27%
Grisons 31.88%
Lucerne 31.19%
Appenzell Rhodes-Extérieures 30.17%
Appenzell Rhodes-Intérieures 30.17%
Uri 25.43%
Zoug 23.82%
Schwytz 23.15%
Obwald 22.42%
Nidwald 26.13%

 

EU Residents and Non-Residents

Residence and employment conditions applicable to foreign nationals in Switzerland vary by country of origin:

  • European Union or European Free-Trade Association nationals can stay in Switzerland without additional authorisation for a maximum period of three months. Except for nationals from the so-called EU-8 (Eastern European countries that joined the EU in 2004), EU nationals enjoy free movement in Switzerland (EU-8 nationals are still subject to some restrictions until 2014). Persons that qualify for free movement in Switzerland can come and work in Switzerland without a special permit (but still need a residence permit if their stay exceeds three months).
  • Non-EU or EFTA citizens must have both a work and residence authorisation to work and live in Switzerland. However, conditions of entry and of free movement have significantly improved in recent years, in order to promote economic flexibility. A foreign national with a residence authorisation may therefore work in Switzerland without requiring another prior declaration. There are a number of authorisations, such as B, C and L permits, border permission, short-term authorisation, intern authorisation, etc.

Passport: Becoming a Swiss Citizen

passeport suisseIn order to become a Swiss citizen a number of conditions must be fulfilled, including the Swiss Confederation’s approval of a request submitted by the canton or commune. To become a Swiss citizen, a person must:

  • Have resided at least twelve years in Switzerland (the years between ten and 20 years count for two-years each).
  • Have integrated into the Swiss community and be familiar with the customs and traditions of the country.
  • Follow Swiss law.
  • Not present any danger to Switzerland’s internal or external security.

A spouse’s naturalisation may be facilitated if the couple has resided for at least five years in Switzerland, and has been married for at least three years. If one parent is a naturalized Swiss citizen, then the naturalization process for children is also simplified. However it should be remembered that Swiss citizens are not entitled to lump-sum taxation.

Living in Switzerland

There are currently over 6,500 foreign companies in Switzerland. These companies regularly engage foreign employees creating the need for the numerous housing and integration services (resettlement agencies, expatriate associations, etc.), and Switzerland is also a desirable destination in terms of expatriation for tax purposes. In order to rent an apartment, the prospective tenant must complete a form indicating age, marital status, profession, number of children, type of residence, employer and salary. An extract from the debt collection register (which can be ordered from the commune’s debt collection office) is also required, in order to prove the tenant’s credit history.

Swiss Succession and Inheritance

Historically, one of the main benefits of Switzerland related to succession planning because in Switzerland, inheritance is not taxed. Many people therefore choose to live out the end of their lives in Switzerland in order to be able to bequeath their full estate to their heirs without being subject to tax. However as of 1 January 2014, this no longer applies. Under the new rules if a Swiss resident whose heirs live in France dies in Switzerland his inheritance will still be taxed according to French tax law.

Please visit our webpage on property refinancing in order to discover possible inheritance solutions.

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