Acquisition of Swiss Real Estate by Foreign Nationals
The Federal Act on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents – also known as Lex Koller – severely restricts the acquisition of real estate in Switzerland by foreign nationals and foreign-controlled companies.
Persons resident abroad and foreign companies require an authorization if they wish to purchase real estate in Switzerland.
The cantonal authorities are responsible for issuing authorizations, and an authorization can only be issued if a statutory ground for authorization applies.
Residential property for foreign nationals resident in Switzerland
Persons with the right to reside permanently in Switzerland (minimum requirement: residence permit B) who wish to purchase a property as their main residence are not subject to the authorization requirement.
Second homes and holiday homes or properties to let can also be purchased by EU/EFTA nationals with the right to reside permanently in Switzerland. In this respect, they are treated the same as Swiss nationals.
This requires that the person lives in Switzerland with the intention of remaining there permanently. In addition, the focal point of their personal and economic life must be in Switzerland. This is not the case for persons who are only temporarily based in Switzerland, for instance for purposes of further education or for a fixed-term work assignment.
Foreign nationals resident abroad and foreign companies
Foreign nationals for purposes of Lex Koller are all persons without a Swiss passport who are resident abroad and persons resident in Switzerland who are neither EU/EFTA citizens nor in possession of a settled foreign nationals permit (C).
Foreign companies are legal entities or businesses capable of owning assets whose registered office is located abroad. This also includes legal entities or businesses whose registered office is located in Switzerland if they are controlled by persons abroad; this is the case if the foreign shareholding exceeds 50%.
It should be noted that foreign funding of the property purchase can also give rise to an authorization requirement.
This is because it is not only formal ownership that qualifies as an acquisition, but also other rights that place the buyer in a position similar to that of an owner. Pursuant to Article 1 (2) (b) BewV (Regulation on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents) this is particularly the case if the terms and conditions of the funding, the amount of the loan or the financial circumstances of the buyer make the buyer particularly dependent on the funder.
Acquisitions of commercial properties do not require authorization
The acquisition of immovable property serving as the permanent establishment for a trading, manufacturing or other form of commercial operation is not covered by Lex Koller and therefore does not require an authorization.
If an initial assessment shows that the acquisition of real estate is excluded from the authorization requirement, it is generally recommended to obtain advance confirmation in this regard from the relevant cantonal authority.