How to Gain Swiss Residency Through Lump-Sum Taxation

For high-net-worth individuals seeking a tax-efficient and straightforward route to Swiss residency, the Swiss Lump-Sum Taxation scheme presents an attractive opportunity. This residence by investment scheme primarily allows non-EU/EFTA nationals to obtain a Swiss residence permit by agreeing to pay a fixed annual tax rather than declaring worldwide income. It is particularly suited to wealthy individuals, including retirees and international investors, who wish to reside in Switzerland without entering into gainful employment or operating a business locally.

Understanding the Swiss Lump-Sum Tax Residency Scheme

Switzerland is well known for its financial stability, high quality of life, and attractive tax policies for wealthy individuals. The lump-sum taxation route enables eligible applicants to secure a B Residence Permit, which can lead to a C Permit (permanent residence) after five or ten years, depending on nationality and integration levels.

Unlike other investment-based residence schemes, the lump-sum tax programme - widely referred to as Switzerland's Golden Visa - does not require individuals to establish a business in Switzerland. Instead, the tax is calculated based on personal living expenses rather than global wealth or income, making it a predictable and appealing option for those seeking residency without professional obligations.

It is essential to select a canton that offers lump-sum taxation, as not all regions provide this option. Zurich and Basel, for example, do not participate in the scheme, whereas cantons such as Vaud, Geneva, Valais, Ticino, and Zug actively welcome lump-sum taxpayers.

Key Eligibility Requirements for Swiss Residency Based on Lump-Sum Taxation

To qualify for Swiss residency under the lump-sum taxation scheme, applicants must meet specific criteria. First and foremost, they must be non-Swiss nationals. Although the scheme is primarily aimed at non-EU/EFTA nationals, some cantons may accept EU/EFTA applicants under the Swiss investment visa by lump-sum taxation route, subject to local policy. Applicants must also be either taking up Swiss residence for the first time or returning after an absence of at least ten years.

A fundamental requirement of the Swiss Golden Visa scheme is the annual lump-sum tax payment, which is negotiated with the cantonal tax authorities. The minimum tax amount varies by canton but typically ranges from CHF 250,000 to CHF 1 million or more per year, depending on the canton and the applicant’s personal circumstances. In wealthier cantons such as Geneva, Vaud, and Zug, tax agreements at the higher end are common.

Applicants must establish residency in a high-value property in Switzerland and maintain their main residence there. This means spending at least 183 days per year in the country. Additionally, they must not engage in gainful employment or business activities within Switzerland, although managing foreign investments and operating businesses overseas remains permitted.

How the Swiss Lump-Sum Tax is Calculated

The lump-sum tax is calculated on the basis of estimated annual living expenses and must not be less than the highest of: seven times the annual rental value of the applicant’s Swiss residence, seven times the actual rent paid, or the minimum threshold of CHF 429,100 at the federal level. Cantonal thresholds may be higher.

The applicable tax base is whichever of these figures is highest, and once determined, the final tax liability is negotiated directly with the relevant cantonal authority. This process is tailored to each applicant’s circumstances and typically takes three to four weeks to complete.

What Is the Minimum Tax Payment for Swiss Residence by Investment?

For individuals seeking Swiss residence under the lump-sum taxation scheme, the minimum net annual tax payment generally falls between CHF 250,000 and CHF 1 million or more per year, depending on:

• The tax regulations of the chosen canton

• The applicant’s financial situation

In wealthier cantons such as Vaud and Geneva, tax contributions at the higher end of the range are more common.

Swiss Residency Obligations Under the Lump-Sum Tax Scheme

To maintain Swiss residency under this scheme, applicants must demonstrate that Switzerland is their primary place of residence. Swiss immigration law generally requires lump-sum taxation residents to physically reside in Switzerland for a minimum of 183 days per calendar year. This ensures that Switzerland is not only the applicant’s tax domicile but also their primary centre of personal and family life. Authorities will assess the applicant’s genuine intent to reside in Switzerland rather than merely using the country as a tax base. Factors such as property ownership, family connections, and previous long-term stays may strengthen an application.

Under Switzerland’s Golden Visa scheme, individuals granted residence through the lump-sum taxation route are strictly prohibited from engaging in gainful employment or conducting business activities within Switzerland, whether as employees, self-employed persons, or business operators. However, they are permitted to manage their own global assets and investments and may receive passive income from foreign sources, including dividends, interest, and overseas rental income. Business activities conducted entirely outside Switzerland are also allowed, provided they do not involve Swiss-based clients or generate domestic revenue. In some cases, ownership of a Swiss company may be acceptable if the company operates exclusively abroad and has no economic activity in Switzerland. The permissibility of serving as an unpaid board member of a Swiss entity remains legally uncertain and subject to varying interpretations by cantonal authorities.

Applying for Swiss Residence by Investment via Lump-Sum Taxation

Applying for a Swiss residence permit through lump-sum taxation involves several steps.

The first stage is an initial consultation to assess eligibility and determine the most suitable canton. Following this, negotiations with the cantonal tax authorities will establish the tax agreement, typically taking three to four weeks. Once an agreement is reached, the formal residency application is submitted, along with the necessary financial documentation. The approval process generally takes four to six weeks, after which the applicant receives a B Residence Permit, which is renewable annually.

Following five or ten years of continuous residence—depending on the applicant’s nationality and level of integration—individuals may apply for a C Permit, granting them permanent residency in Switzerland.

Applicants who meet the residence and integration requirements may later become eligible to apply for Swiss citizenship by investment. However, naturalisation requires the applicant to exit the lump-sum tax regime and transition to ordinary taxation, in addition to meeting language and community integration standards.

Benefits and Limitations of the Swiss Golden Visa via Lump-Sum Taxation

The Swiss lump-sum taxation programme offers several advantages for high-net-worth individuals. It provides a tax-efficient structure, predictable annual tax payments, and access to Switzerland’s globally recognised healthcare system, public security, and world-leading infrastructure. Furthermore, it allows individuals to manage foreign investments freely while enjoying the benefits of Swiss residency.

However, there are also challenges to consider. The high minimum tax payments can be a significant financial commitment, particularly in wealthier cantons. The restriction on gainful employment within Switzerland may limit opportunities for those looking to be actively involved in the Swiss economy. Additionally, the physical presence requirement of at least 183 days per year means applicants must genuinely relocate to Switzerland rather than using the country solely as a tax base.

How Richmond Chambers Switzerland Can Assist

Navigating the Swiss Lump-Sum Taxation scheme requires careful planning and compliance with Swiss immigration and tax regulations. At Richmond Chambers Switzerland, our team of immigration lawyers and tax advisors provides expert guidance to high-net-worth individuals seeking Swiss residency through the Swiss investment visa by lump-sum taxation route.

Our services include assessing eligibility, negotiating tax agreements with cantonal authorities, preparing residence permit applications, and coordinating with Swiss tax experts to ensure compliance and tax efficiency. We also provide ongoing support for permit renewals and eventual applications for permanent residency.

For expert assistance with your Swiss residence permit application via lump-sum taxation, contact our immigration lawyers in Switzerland on +41 21 588 07 70 , email info@richmondchambers.ch or complete our enquiry form.