Switzerland has been attracting the world’s super rich for decades.
The country’s famous banks, discretion, security – along with breath-taking scenery – are just some of the reasons why millionaires from around the world are drawn to the small Alpine nation.
The pandemic has further fuelled the run on luxury properties in Switzerland, according to UBS bank.
Property prices are soaring, with the highest recorded in the municipality of Cologny near Geneva, where real estate costs some 33,000 euros (39,000 dollars) per square metre.
That is partly because the outbreak of the coronavirus has increased people’s longing for security, according to analysts at UBS.
They also note that in Switzerland, the risk of higher taxes for top earners is – unlike in some places abroad – manageable “thanks to a stable fiscal position.”
Switzerland’s debt ratio is 40 per cent of gross domestic product. In comparison, this rises to around 70 per cent in Germany, and above 100 per cent in France.
In 2020, the list of Switzerland’s 300 richest people was topped by the heirs of late Ikea founder Ingvar Kamprad, according to Bilanz magazine.
The list also includes many others from abroad, such as Belarusian billionaire Andrey Melnichenko, and French entrepreneur Gerard Wertheimer, who holds the majority of shares at Chanel, together with his brother. Then there’s Dutch entrepreneur Charlene Carvalho-Heineken, whose father founded the Heineken brewery.
Credit Suisse estimates that 14.9 per cent of the population were millionaires in 2020, meaning every sixth inhabitant in the country of some 8.5 million. That gives the country the greatest concentration of millionaires worldwide, aside from small states such as Monaco.
Switzerland also has 135 billionaires, according to Bilanz.
Meanwhile, more wealthy people are heading to Switzerland, it seems. Lawyer Enzo Caputo, who focuses on foreign clients who are seeking to start a life in Switzerland, says the number of queries from clients has grown by 25 per cent. Other lawyers suggest the figure has risen by 40 per cent.
These numbers are impossible to verify, however, as discretion is key among such circles.
Caputo negotiates contracts with Switzerland’s cantons on taxation to enable clients to pay a lump sum, he tells dpa. That means new arrivals do not have to declare their assets at all.
That comes at a price: a residence permit and flat-rate tax package was available in the canton of Jura for an unmarried non-European for the equivalent of around 135,000 euros a year, according to broadcaster RTS.
But even without these kinds of deals, the conditions are more than favourable in Switzerland. Depending on the canton, the income tax rate of around 22 per cent is only half the level in many other countries.
People tend to plan a move to Switzerland a long time in advance, says Caputo, listing the steps. “First, the assets are placed in a Swiss bank with a good asset manager. Then the family arrives, followed by the head of the family.”
According to analyses by the Boston Consulting Group, no other country in the world has so much wealth held by foreigners who do not live in the country – some 2.4 billion dollars. This amounts to a quarter of all global foreign assets, and more than in Hong Kong and Singapore.
Real estate agents are also seeing a surge in interest. “Especially in the luxury segment, demand has increased enormously since the summer of 2020,” Franko Giovanoli, who is responsible for the exclusive St Moritz region at his firm Ginesta, tells dpa.
What people are looking for is a secure investment, he says.
That could be a ‘modest’ three-bedroom holiday apartment, for example. Prices start at 1 to 2 million Swiss francs (1.1 to 2.2 million dollars).