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 pathway 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 retirees, investors, and businesspeople who wish to reside in Switzerland without engaging in local employment.

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, this programme 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, non-EU/EFTA nationals since EU/EFTA citizens benefit from free movement rights. 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 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 150,000 to CHF 350,000 or more, depending on individual circumstances and location. 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 remains permitted.

How Lump-Sum Taxation is Calculated

The tax base—the amount on which tax is payable—is determined using annual living expenses, including school fees, plus one of the following:

• Seven times the annual rental value of a Swiss property (if owned)

• Seven times the annual rent (if the property is rented)

• A fixed minimum taxable base of CHF 429,100 (as of 2024)

The applicable tax base is whichever of these figures is highest.

Once an initial tax base has been calculated, the final amount on which tax is payable is negotiated directly with the relevant cantonal tax authority. This process is tailored to each applicant’s circumstances and typically takes three to four weeks to complete.

Minimum Tax Contribution for Swiss Residency

For individuals seeking Swiss residence under the lump-sum taxation scheme, the minimum net annual tax payment generally falls between CHF 150,000 and CHF 350,000 or more, 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.

Physical Presence and Residency Obligations

To maintain Swiss residency under this scheme, applicants must demonstrate that Switzerland is their primary place of residence. Most cantons require individuals to spend at least six months per year in the country. 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.

While lump-sum taxpayers are restricted from engaging in employment or business activities in Switzerland, passive income from foreign investments—including dividends, interest, and rental income—is permitted. In some cases, lump-sum taxpayers may own a Swiss company, provided it operates internationally and does not generate revenue within Switzerland.

Application Process for Swiss Lump-Sum Tax Residency

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.

After maintaining residency for five or ten years—depending on nationality and integration—applicants may apply for a C Permit, granting them permanent residency in Switzerland.

Advantages and Challenges of the Swiss Lump-Sum Taxation Scheme

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 world-class healthcare, security, and 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 this 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.