Each year, more and more people become interested in Switzerland, which for various reasons attracts the attention of foreigners either for business establishment or private purposes (housing purchase for a living). Nevertheless, the Swiss Real Estate market exhibits a few remarkable characteristics.THE LEGAL REQUIREMENTS AND RESTRICTIONS
To begin with, the Swiss Real Estate market has a high degree of protectionism. The Federal Law on the Acquisition of Real Property by Persons Abroad (referred to as the Lex Koller legislation) has established a reasonable restrictive impact on acquisition of properties by persons residing abroad. Under aforesaid law, those who are not citizens of the European Union (EU) or their countries are not the part of the European Free Trade Association (EFTA) and who do not own the Swiss permanent residence (permit C) as well as citizens of the EU and EFTA who do not have a residence permit (permit B) in Switzerland, will be considered as a residing abroad person. One should note that the acquisition of real property and the acquisition of shares in companies or business owning real property require authorization from the cantonal authorities, unless this property will be used as a permanent establishment for the active business.
In practice, in case of a share purchase in the company which owns real property and does not use it for the business purposes (even thru an escrow agent
or other escrow specialists
) , Lex Koller will be applied when the acquirer is – a residing abroad person, a foreign company or a Swiss company controlled by a person who is resided abroad. Also, this law applies to the cases when the market value of the real estate is higher than a 'certain percentage' of the market value of the overall amount of the company assets. Unfortunately, there is no clarification to the amount of that percentage, but it could be stated that the sum should be higher than 50% of the total amount of the company assets.
It is important to ensure that your business is functioning in compliance with the rules and the obligation stated in the Lex Koller legislation due to the fact that any purchase made without appropriate compliance to the Swiss law requirements will be null and void.From the above-mentioned, it should be clear that you will be allowed to buy any type and amount of property in Switzerland if you own a B residence permit (exclusively for the EU/EFTA nationals) or a C Swiss permanent residency (for other nationals) which can be given for those who have been in Switzerland for not least than 5 years with additional requirements, depending on the canton you live in. With the B or C permit, you will obtain the same rights as a Swiss citizen to purchase a property. As for the commercial property, there are no restrictions on the geographical location or the number of properties that you can purchase even if you are a resident abroad excluding any usage of company property for the personal benefit and interests.