In most cantons of Switzerland foreigners wishing to immigrate in Switzerland can get Swiss residence through a lump-sum taxation regime (also called 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 Outer-Rhodes, Schaffhouse, Basel-Country and Basel-City. The cantons of Thurgovia, St. Gall, Lucerne and Berne are applying stricter rules.

Foreigners can benefit from lump-sum taxation if they are:

• 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.

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 maximum period of five years. After December 31, 2020 the current legal provisions also apply to these taxpayers.

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.

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:

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.

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 do not 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 entering 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 where you live. 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 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

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.)