Residency in Switzerland through Business Formation or Tax Agreement

Non-EU citizens can acquire a Swiss residence permit by setting up a company, typically a joint-stock company (AG) or a limited liability company (GmbH).

Non-EU/EFTA citizens must hold a valid C Permit, alternatively, be a Swiss citizen to be able to set themselves as self-employed.

Non-EU/EFTA citizens not meeting these requirements must submit an application to the respective cantonal authorities. In that perspective, they must prove that their future company will have a “lasting positive effect or influence on the Swiss labour market”, mainly meaning that the company “contributes to the industry-specific diversification of the regional economy, preserves or creates several jobs for local staff, makes substantial investments and generates new orders for the Swiss economy”. The business plan plays a key role in that overall assessment and shall carefully be drafted. Following that procedure, they might receive a short-term authorization to work or reside in Switzerland (L Permit) or a residence permit (B Permit), both subject to annual quotas.

Finally, foreign entrepreneurs shall also meet the Swiss labour market requirements and be qualified to run the proposed business.

To be eligible for a Swiss residence permit as a non-EU national through business establishment, the following criteria typically apply:

1. Business Viability: The business must demonstrate potential for economic contribution to the Swiss economy, such as job creation or significant investment.

2. Residency Needs: A clear intention to live and work in Switzerland, including establishing a physical presence and meeting tax residency requirements.

3. Permit Type: The type of permit issued will depend on the business structure and personal qualifications. Options include the L permit (short-term residence) and the B permit (long-term residence).

4. Professional Background: Strong professional background, business plan, and proof of financial resources to support the business venture.

Our consultants will assess your unique situation and guide you on meeting these criteria efficiently.

Family Members’ Residency Options

Family members of the primary permit holder can generally obtain residence permits through family reunification. Eligible dependents include spouses and children under 18 years (or under 21 for EU dependents). The primary permit holder must have suitable housing for the family and demonstrate financial means to support them. Family members granted permits under reunification rules can reside and, in many cases, work in Switzerland, provided they meet the specific requirements set by the canton.

These permits are initially granted as renewable one-year B permits, with the possibility of applying for permanent residence (C permit) after five or ten years, depending on residency stability and integration factors such as language skills.

For tailored guidance, feel free to reach out to us, as requirements and processing can vary based on individual circumstances and cantonal policies.

An alternative route to Swiss residency for high-net-worth individuals is a «lump-sum tax agreement». This agreement is especially popular among those who wish to reside in Switzerland without engaging in local business activities.

In Switzerland, non-EU nationals who choose to relocate through a lump-sum taxation arrangement (forfait fiscal) can gain residency based on a specific tax agreement with the cantonal authorities. This lump-sum taxation allows them to pay tax based on their estimated living expenses in Switzerland, rather than their global income or assets, provided they do not engage in any gainful employment in the country.

Eligibility and Tax Requirements

To qualify for lump-sum taxation, applicants must meet several key conditions:

1. First-time Residency: They must be moving to Switzerland for the first time or after a minimum absence of ten years.

2. Financial Independence: The applicant should demonstrate significant financial resources to ensure they can cover their living costs independently without engaging in Swiss employment.

3. Minimum Tax Base: Many cantons set minimum thresholds for taxable income under this regime. For example, in Zug, non-EU nationals typically need a minimum income tax basis of CHF 1 million and a wealth tax base of CHF 20 million. In other cantons, such as Nidwalden or Schwyz, thresholds can vary slightly based on local requirements. The minimum annual tax burden usually starts from CHF 400,000, but specifics are discussed individually with cantonal tax authorities to align with the applicant's spending profile.

4. No Business Requirement: Under this agreement, the individual is not permitted to conduct active business within Switzerland, which makes this option ideal for retirees, investors, and those with global interests outside of Switzerland.

After fulfilling these requirements, applicants are generally eligible for a renewable residence permit (B permit) based on fiscal interest. This permit enables the individual and their family members to live in Switzerland, though it restricts employment within the country. Family members, such as a spouse and minor children, are typically eligible for family reunification residency, provided the principal applicant meets the financial conditions. After residing for ten consecutive years under this permit, non-EU residents may apply for a permanent residence permit (C permit), and eventually for Swiss citizenship, depending on integration and language requirements.

This arrangement is particularly attractive in low-tax cantons like Zug, Schwyz, and Nidwalden, which actively support such programs to attract high-net-worth individuals while ensuring fiscal benefits for the canton and local community.

For more specific guidance on the residency and taxation process we encourage you to book consultation with our experts.

Each canton in Switzerland has some flexibility in determining the minimum tax contribution and specific residency conditions under this agreement, providing an opportunity for applicants to select the canton that best suits their lifestyle and financial preferences.