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RELOCATION TO SWITZERLAND: What you need to know about marital, inheritance, family and adult protection law

1. Overview In our previous Focus On article about moving to Switzerland, we covered the main aspects of residence permits and taxation and marginally touched on marital and inheritance law. With this article we are now answering the following burning questions: Will your foreign marriage be recognized in Switzerland? In the event of a divorce, what are the legal implications? Will the Swiss authorities be competent to deal with your divorce after you have moved? Which law is applicable? Do foreign marriage contracts remain valid or do they require modification? What are the basic principles of Swiss matrimonial property law? Which law is applicable? Is your foreign last will still valid or does it need to be amended? Is there a right to a compulsory portion in Switzerland? What applies regarding inheritance contracts? Which law applies? What about patient decrees (living wills) and advance care directives?   2. Marital law 2.1. Recognition of marriages celebrated abroad From a Swiss legal standpoint, a marriage that has been legally celebrated abroad will be recognised in Switzerland, unless it was entered into with the intention of circumventing Swiss provisions on the annulment of marriage (art. 45 Federal Act on Private International Law, hereinafter “PILA”). Furthermore, foreign decisions or measures concerning the effects of marriage will be recognised in Switzerland if they were rendered: in the state of domicile or habitual residence of a spouse; or in the state in which the marriage was celebrated provided that the action cannot or cannot reasonably be expected to be brought in the state of domicile or habitual residence of a spouse (art. 50 PILA). 2.2. Jurisdiction In accordance with article 46 PILA, the Swiss judicial or administrative authorities at the domicile of either spouse (or in the absence of a domicile, at the habitual residence of the spouses) have jurisdiction to hear actions or to order measures relating to the effects of marriage. This includes disputes about the personal relationships between the spouses and the external legal effects of the marriage. Examples of such effects are the organisation of the joint household and its dissolution, as well as the obligation to safeguard the marital and family well-being. Consequently, the Swiss authorities at your place of domicile are competent to hear and order the above measures after your relocation, even if your marriage was celebrated abroad. In the case of divorce or separation proceedings, the Swiss courts are competent: at the domicile of the defendant spouse; or at the domicile of the plaintiff spouse, provided that the plaintiff has been residing in Switzerland for at least one year or is a Swiss citizen (art. 59 PILA). 2.3. Applicable law The legal effects of marriage are determined by the laws of the state in which the spouses are domiciled (art. 48 para. 1 PILA). Furthermore, divorce and separation proceedings are also subject to Swiss law if both spouses are domiciled in Switzerland (art. 61 PILA). The subsequent effects of divorce and separation are governed by Swiss law, with the following exceptions: you can declare foreign law to be applicable regarding your right of name (art. 37 para. 2 PILA); you can also declare foreign law to be applicable regarding your matrimonial property regime (art. 52 para. 1 PILA); furthermore, the child-parent relationship is subject to the laws of the state in which the child habitually resides (art. 82 para. 1 PILA). In the event that neither parent is domiciled in the state of the child's habitual residence and all are citizens of the same state, the law of that country will apply (art. 82 para. 2 PILA). Also, maintenance obligations between parents and children and between spouses are governed by the Hague Convention of 2 October 1973 on the Law Applicable to Maintenance Obligations. In connection with your relocation, you may therefore choose to submit your right of name and your matrimonial property regime to the laws of your home country after making an assessment of what is more convenient for you and your spouse or what has been previously agreed between both of you. The effects of marriage and the subsequent effects of divorce and separation will, however, be governed by Swiss law. Under Swiss law it is possible for the spouses to already settle the economic consequences of a divorce in advance. The court will usually approve the advance divorce convention if it is satisfied that the parties have freely agreed to it and that the convention is clear, complete and reasonable.   3. Matrimonial property law 3.1. Recognition of foreign decisions on matrimonial property relations Foreign decisions relating to matrimonial property relations are recognised in Switzerland if they were rendered or are recognised: in the state of domicile of the defendant spouse; in the state of domicile of the plaintiff spouse, provided the defendant spouse was not domiciled in Switzerland; in the state whose law applies to the matrimonial property relations pursuant to the PILA provisions; or to the extent that they relate to immovable property if they were rendered or are recognised in the state in which the respective property is located (art. 58 para. 1 PILA). 3.2. Jurisdiction In general, the Swiss courts or authorities at the domicile of a spouse are competent to settle the matrimonial property regime in case of death of one of the spouses or in case of divorce or separation (art. 51 PILA). 3.3. Applicable law Matrimonial property relations are governed by the law chosen by the spouses (art. 52 para. 1 PILA). The choice of law must be agreed in writing or result with certainty from the provisions of a marriage contract (art. 53 para. 1 PILA). A marriage contract is valid as to its form if it satisfies the requirements of the law applicable to the contract or the requirements of the law of the place where the contract was concluded (art. 56 PILA). With regard to matrimonial property law, you have the following options and may either declare as applicable: the law of the state in which both, you and your spouse, are domiciled; the law of the place of celebration of your marriage; or the law of a state of which either of you is a citizen. If, for example, the matrimonial property law of your home country is more advantageous, you can declare this law to be applicable by means of a choice of law clause in your marriage contract. In the absence of a choice of law clause in a marriage contract concluded abroad, matrimonial property relations will be governed by Swiss law upon relocation to Switzerland (art. 54 para. 1 PILA). However, a choice of law can also be made after relocation with retrospective effect. 3.4. Swiss matrimonial property regimes in a nutshell In accordance with Swiss legislation, three matrimonial property regimes are available, each of which determines the management of assets during the marriage and the division of assets in the event of divorce or death. These are: Regime of participation in acquired property; community of property; and separation of property. In the event of the death of a spouse, the matrimonial property settlement takes place as a first step before the settlement of the estate. 3.5. Participation in acquired property In the absence of a marriage contract, the regime of participation in acquired property is the default regime and applies automatically under Swiss law (art. 181 Swiss Civil Code, hereinafter "SCC"). A distinction is made between the acquired property and the separate property of each spouse. The term "acquired property" refers to assets that a spouse has acquired for consideration during the marital property regime (art. 197 para. 1 SCC). A spouse's individual property comprises personal effects used exclusively by that spouse, assets belonging to one spouse at the beginning of the marital property regime or acquired later at no cost by inheritance, gift or otherwise, claims for satisfaction and acquisitions that replace individual property (art. 198 SCC). It should be noted, however, that certain modifications can be made to the acquired property regime by means of a marriage contract. In the event of separation or death, each spouse or their heirs are entitled to one-half of the acquired property of the other spouse (after deduction of all debts and additions due to investments by the other spouse, so-called “surplus”; art. 215 SCC). Alternatively, a different share of the surplus may be agreed upon by marriage contract (art. 216 para. 1 SCC). Such an agreement may not violate the forced heirship rights of non-common descendants or their issue (art. 216 para. 3 SCC). 3.6. Community of property Should you and your spouse wish to have a community of property, it is necessary to conclude a marriage contract. In accordance with Swiss legislation, to be valid a marriage contract must be notarised before a notary public and signed by both parties (art. 184 SCC). The community of property unites the assets and income of the spouses into common property, except for those assets which are legally defined as individual property. This includes items for exclusive personal use of one spouse and claims for satisfaction (art. 222 para. 1 SCC, art. 225 para. 2 SCC). In the event of the death of one spouse, half of the assets of the common property will remain with the surviving spouse and no claw-back will be possible. Forced heirship rights of descendants must be respected with regard to the other half of the common property which forms part of the estate. 3.7. Separation of property Furthermore, a marriage contract may stipulate the separation of property between the spouses. In accordance with the law, each spouse will then administer and enjoy the benefits of his/her own property and has power of disposal over it (art. 247 SCC). This regime is often chosen if no sharing of assets between the spouses is desired, especially if one spouse is substantially wealthier than the other before the marriage or has an expectancy to become substantially wealthier during the marriage, e.g. by way of inheritance or income derived from a gainful activity or property.   4. Inheritance law A revised version of the Inheritance Law Chapter of the PILA will come into force on 1 January 2025. The objective of the revision is to align Swiss law provisions with foreign private international law (e.g. the EU Succession Regulation) and to mitigate the risk of conflicts of jurisdiction between authorities in Switzerland and abroad. 4.1. Jurisdiction In accordance with the current legislation, the Swiss judicial or administrative authorities at the deceased person's last domicile have jurisdiction to take the necessary measures to settle his/her worldwide estate (art. 86 para. 1 PILA). The exclusive jurisdiction of a state where immovable property is located is reserved (art. 86 para. 2 PILA). As of 1 January 2025, foreign nationals will have the option to submit their estate to the jurisdiction of the authorities of their home country by testamentary disposition or inheritance contract (art. 88b para. 1 new PILA). Furthermore, in the case of immovable property located abroad, Swiss jurisdiction can also be waived if the deceased has declared a property located abroad subject to the jurisdiction of his/her home country by testamentary disposition or inheritance contract and its authorities are dealing with it (art. 88b para. 2 new PILA). If most of your assets remain in your home country following relocation to Switzerland, or if the estate can be settled more efficiently there, it may be beneficial to reassess whether it is advantageous to declare the foreign authorities as having jurisdiction to settle your worldwide estate. However, this should be carefully considered, as the same option does not exist in terms of the settlement of your matrimonial property regime, which could result in complex two-track procedures. 4.2. Applicable law 4.2.1. Choice of law Foreign citizens residing in Switzerland may submit their estate by last will or inheritance contract to the law of one of their home countries (professio iuris) (art. 90 para. 2 PILA). In accordance with Swiss doctrine, for a professio iuris to be valid, it must be evident from the testamentary disposition that the testator was aware that his/her citizenship law would apply to the estate. If a foreign person with a domicile in Switzerland does not make a choice of law with respect to his/her estate, his/her worldwide estate will be governed by Swiss law (art. 90 para. 1 PILA). The applicable law determines the composition of the estate, the beneficiaries, and the extent of their entitlements. It also defines the liability for the estate's debts, the legal remedies available, and the measures that may be ordered, subject to specific requirements (art. 92 para. 1 PILA). The implementation of the measures is subject to the law of the state with jurisdiction. This law governs, among other things, conservatory measures and the administration of the estate, including the administration by an executor (art. 92 para. 2 PILA). Should you elect to have foreign law apply to your worldwide estate, the substantial validity, revocability and interpretation of a testamentary disposition, along with the effects of the instructions contained therein, will also be governed by your chosen law (art. 94 para. 2 new PILA). The same applies to inheritance contracts (art. 95 para. 2 new PILA). Swiss forced heirship law is not of public order. Consequently, foreign provisions that deviate from Swiss forced heirship law are usually valid, provided that a valid choice of law exists, and the testator is not a Swiss citizen. 4.2.2. Form of testamentary dispositions Switzerland is a contracting state of the Hague Convention of 5 October 1961 on the Conflict of Laws relating to the Form of Testamentary Dispositions (Hague Convention). In international inheritance matters, the Convention facilitates the recognition in Switzerland of a testamentary disposition made in accordance with foreign law as valid regarding its form. The form of a testamentary disposition is valid in Switzerland if it complies with the national law of the place where the testator made the testamentary disposition, of a state of which the testator was a national at the time of making the testamentary disposition or a place in which the deceased was domiciled at the time he made his testamentary disposition (art. 1 Hague Convention). 4.3. Swiss inheritance law in a nutshell 4.3.1. Legal heirs If a testator has not drawn up a last will or an inheritance contract, or if incomplete testamentary dispositions need to be completed, the statutory succession rules set out in Article 481, paragraph 2 of the SCC apply. According to these rules, the legal heirs are the relatives of the deceased, their spouse or registered partner and, if none of these exist, the public community (cf. art. 457 et seq. SCC). A legal heir is not automatically entitled to his/her full share of the estate. The testator has the right to freely dispose of his/her estate within the limits of the rules of forced heirship. This means that the testator can also appoint non-legal heirs as heirs (so-called appointed heirs). If a testator is survived by descendants, they are each entitled to an equal share of the estate. Descendants also include adopted children (art. 267 para. 1 SCC) and the testator's legitimate children. Stepchildren are not descendants in the legal sense. If there are no surviving descendants, the inheritance passes to the parental line (art. 458 para. 1 SCC). If the testator leaves neither descendants nor heirs of the parental line, the inheritance passes to the line of the grandparents (art. 459 para. 1 SCC). The legal succession of relatives ends with the line of the grandparents (art. 460 SCC). If the testator leaves a surviving spouse, the spouse is also entitled to a certain share of the estate as a legal heir. If there are surviving descendants, they are entitled to half of the estate. If they have to share the estate with heirs of the parental line, they are entitled to three-quarters of the total estate. If there are no heirs in the parental line, the surviving spouse is entitled to the entire estate (Art. 462 SCC). This rule also applies by analogy to the registered partner. 4.3.2. Forced heirship rules The descendants, as well as the spouse or registered partner, are entitled to a compulsory portion (art. 471 SCC). The following persons are protected by forced heirship rules and receive specific compulsory portions: descendants (children, grandchildren, great-grandchildren, etc.): half of the legal portion spouses or registered partners: half of the legal portion The statutory compulsory portions amount to a maximum of half of the total estate. The other 50% is the portion at free disposal of the testator. If there are no heirs protected by a compulsory portion, the testator can freely dispose of his/her whole estate.   5. Adult protection law (advance care directive / patient decree) 5.1. Swiss Jurisdiction and applicable law In Switzerland, it is common practice to execute an advance care directive and a patient decree to facilitate better self-determination and to prevent third parties from interfering in personal, medical and financial matters in the event that an individual is no longer capable of making decisions. These measures are part of the adult protection law. Jurisdiction and applicable law In respect of the protection of adults, the jurisdiction of the Swiss judicial or administrative authorities, the applicable law as well as the recognition and enforcement of foreign decisions or measures are governed by the Hague Convention of 13 January 2000 on the International Protection of Adults (herein after “Hague Convention”) (art. 85 para. 2 PILA). The Hague Convention provides for the protection in international situations of adults who, by reason of an impairment or insufficiency of their personal faculties, are not able to protect their interests. The Hague Convention ensures that a power of representation has force of law in another contracting country. It covers not only official protective measures but also powers of attorney, including advance care directives. Generally, advance care directives are governed by the law of the person's habitual residence unless another law is explicitly chosen, such as the law of the person's nationality or a former residence (art. 15 para. 1 and 2 Hague Convention). The Hague Convention also covers patient decrees that grant power of representation for medical decisions. However, directives specifying which medical treatments a person consents to in case of incapacity are not covered by the Convention on Protection of Adults and are subject to the laws of the country where they are applied. Once you have relocated to Switzerland, you may find that the law of your home country is applied with regard to your advance care directive and the representation provisions in your patient decree. However, this can also result in discrepancies, as the manner in which authority of representation is exercised in an advance care directive and in a patient decree will be subject to Swiss law (art. 15 para. 3 Hague Convention). It is therefore advisable to prepare a separate advance care directive and patient decree in Switzerland. 5.2. Swiss advance care directive and patient decree in a nutshell 5.2.1. Advance care directive In accordance with Swiss legislation, an individual with the capacity to act may appoint a natural person or legal entity to assume responsibility for his/her personal care or the management of assets, or to act as legal agent in the event of his/her incapacity. It is also possible to appoint multiple individuals or legal entities concurrently for different matters. In the absence of an advance care directive, a spouse is typically authorised by law to act as a representative. In the event that the person lacking capacity is not married or that his/her spouse does not, or is unfit, to represent the interests of the incapacitated person, the adult protection authority will intervene and appoint a representative. To be valid, the advance care directive must be handwritten in its entirety, including the place and date, and signed or notarised before a notary public. Upon request, the Civil Register Office records in the central database that a person has executed an advance care directive and the location where it is stored. The appointee may terminate his/her mandate under the advance care directive at any time, subject to providing two months' written notice to the adult protection authority. In exceptional circumstances, the appointee may also terminate the directive without notice. 5.2.2. Patient Decree In addition to the advance care directive, the patient decree provides an effective means of enhancing self-determination and preventing third parties from interfering in medical matters or burdening family members from making difficult medical decisions for their loved ones. A person who is capable of making decisions may set out in a patient decree which medical procedures he/she consents to or declines if he/she loses the capacity to make decisions. To be valid, the patient decree must be signed, and the place and date inserted. It is not necessary for the patient decree to be publicly notarised or handwritten. The individual who has executed a patient decree may request that this information be included on his/her health insurance card. Furthermore, a copy of the patient decree can be stored with the attending physician and the designated healthcare proxy. In the event that a person lacking capacity or judgement has not provided instructions regarding treatment in a patient decree, the attending doctor will plan the required treatment in consultation with the person legally entitled to act as representative in relation to medical procedures. In accordance with the cascade arrangement under Swiss law, this may include: a person appointed in a patient decree; a spouse or registered partner; a cohabiting partner; descendants; parents; siblings   6. Conclusion When relocating to Switzerland, you should carefully assess whether your marriage contract, your last will or your advance care directive and patient decree still reflect your wishes or need to be amended, or if you have none, whether you should implement such documents to better protect you and your family. “The past is given; the future is yet in your hands.”   Authors:  Patricia Guerra, Partner, Head of Private Clients Zurich; Oliver Arter, Of Counsel; Fabienne Häusermann, Associate, are part of MLL Legal's distinguished Private Clients Team with a proven track record in assuring a smooth transition to Switzerland.

RELOCATION TO SWITZERLAND: THE BENEFITS OF RESIDENCE IN THE ALPINE COUNTRY

1. Life in Switzerland What, besides chocolate, watches and mountains makes Switzerland such an attractive country for thousands of people from all over the world to yearly take up residence in one of the smallest countries in Europe? 1.1. Switzerland in a nutshell Switzerland is located in the heart of Europe and has approximately 8.7 million inhabitants with a rising tendency . The country is a federal republic composed of 26 cantons and four main linguistic and cultural regions: French, in the western part, Italian in the south, and German, or rather Swiss German in the rest of Switzerland with the exception of the Romansch region with its particular language Romansch, still spoken by a small minority in the southeast of the country. The country's politics, based on direct democracy, take place in the capital city of Berne. The most well-known Swiss cities are Zurich, Geneva, Lausanne and Zug. Compared to the big cities of the world, Swiss cities do not seem very exciting at first glance because of their small size. However, in reality, Swiss cities have quite a lot to offer. Zurich, for example, is one of the world's most important financial hubs and offers top level restaurants, shops and entertainment, as well as cultural events and offerings. Basel is world-famous for art exhibitions (e.g. Art Basel), while Geneva is home to a large number of international organizations such as the United Nations and the World Trade Organization. For those who prefer life outside of the city, there are plenty of options to settle in smaller villages which are easily accessible and well connected due to excellent Swiss road and train networks. Not only in the Alps and valleys but also in the cities the air is fresh and far less polluted than in the larger metropoles. Furthermore, Switzerland ranks amongst the safest countries with the highest quality of life in the world. 1.2. Further advantages of living in Switzerland 1.2.1. Central location and infrastructure As already pointed out, Switzerland is located in the centre of Europe. With three international airports and international train services, Switzerland is well connected internationally. Furthermore, the road infrastructure within Switzerland is also very well developed. It is also worth noting that Switzerland offers an excellent healthcare infrastructure with excellent public and private hospitals that are easily accessible. 1.2.2. Education system The Swiss education system is well-known for its high quality. The costs for the compulsory education (11 years) are fully funded by the public sector. In addition to the public schools there are also numerous international private schools in Switzerland. Furthermore, Switzerland is home to many highly regarded universities which are also largely funded by the government. ETH Zurich or EPFL Lausanne rank among the top universities in the global rankings every year. 1.2.3. Social system Switzerland has a well-developed and functioning social security system that covers risks in the areas of work, health, family and old age. 1.2.4. Family Offices Given its financial infrastructure, attractive tax environment and security, among other things, Switzerland is a popular location for single and multi-family offices. 1.2.5. Philanthropy Switzerland offers a favourable legal and tax landscape for the establishment of charitable foundations. Today there are approximately 13'524 registered foundations , which, depending on their size/assets/area of activity, are supervised either by a cantonal- or the federal supervisory authority. Swiss charitable institutions are generally exempt from income and capital taxes to the extent the income and capital are exclusively and irrevocably dedicated to charitable purposes. Moreover, donations from persons resident in Switzerland to Swiss charitable institutions are exempt from gift taxes and are deductible for income tax purposes up to certain limit (usually a percentage of the taxable income). 1.3. Statistics on relocation Statistics show that foreigners relocate to Switzerland for various reasons. In 2022, 84,927 people immigrated to Switzerland to pursue gainful employment, 94% came from the EU/EFTA countries. 16,827 persons relocated to Switzerland for education and further training reasons and 4,627 persons who were not gainfully employed, including retired- and other persons with sufficient financial resources, were granted a Swiss residence permit . 2. Relocation to Switzerland and obtaining a residence permit When planning to take up residence in Switzerland, there are different requirements to be met based on whether one is an EU/EFTA citizen or a third country national. The Agreement on the Free Movement of Persons massively eases the entry and the residence in Switzerland for citizens of EU and EFTA countries. Whereas the provisions for third country nationals are more restrictive. Furthermore, there are different requirements to be considered depending on the following situations: residence to pursue gainful employment, self-employed gainful activity, and residence without gainful activity. Depending on the origin, reason of the stay and its duration, different requirements apply. In the following, we provide an overview of the various procedures and aspects that need to be considered for a successful and smooth relocation to Switzerland. 2.1. Requirements for EU/EFTA citizens Based on the Agreement on the Free Movement of Persons, EU/EFTA citizens are allowed to relocate to Switzerland at any time. A valid passport or ID is required for the entry. Within 14 days after entering Switzerland, the applicant must register with the relevant residents' registration office. Thereafter, depending on the canton, the application for a residence permit is either forwarded by the resident's registration office to the competent migration office or he or she must submit the application directly with the migration office. 2.1.1. Residence with gainful activity If an EU/EFTA citizen wishes to take up gainful employment in Switzerland, he or she must apply for a residence permit with the municipality in which he or she will reside in Switzerland before taking up gainful employment in Switzerland lasting longer than three months. Furthermore, a confirmation of employment (e.g., employment contract) must be provided. No residence permit is required if he or she works for an employer in Switzerland for no longer than three months or for no more than 90 days per calendar year. Depending on the duration of the employment contract and the average working time, either a short stay permit (so called L permit) or a B permit will be issued. If an EU/EFTA citizen wishes to take up gainful activity based on self-employment, he or she must also register with the municipality of residence within 14 days after arrival and apply for a residence permit with the competent authority. In addition, the applicant must demonstrate that he or she has sufficient financial resources. 2.1.2. Residence without gainful activity If an EU/EFTA national wishes to reside in Switzerland for longer than three months without gainful activity, he or she requires a residence permit. The applicant must provide documents to the competent authority which prove that he or she has sufficient financial resources. This aims to ensure the authorities that the applicant does not become dependent upon public assistance. Furthermore, the applicant must demonstrate insurance coverage that covers all risks arising from illness and accident. The financial resources are considered sufficient if they exceed the base level that according to Swiss law gives entitlement to social benefits. The calculation of the financial resources also considers pensions and social security benefits. Retirees must additionally prove that their financial resources exceed those which entitle a Swiss national to supplementary benefits from old-age, survivors', and disability insurance. In practice, the competent authorities will accept reference letters from banks confirming that there is more than a certain amount of funds in the EU/EFTA applicant's bank account. 2.2. Requirements for third country nationals 2.2.1. Residence with gainful activity Nationals of countries outside the EU/EFTA can only work in Switzerland if they are particularly qualified and their approval is in the overall economic interest of Switzerland. This includes, for example, executives, specialists, persons with a teaching diploma for higher education with several years of professional experience. A work permit is also required for employment of short duration, and the number of permits is limited. The future employer must outline that it is in the economic interest of Switzerland to hire the applicant and that he could not find suitable personnel on the Swiss and EU/EFTA labour market. The future employer must take the necessary steps to obtain a work permit from the cantonal migration and labour market authorities. Depending on his or her nationality, he or she may also need a visa. A permit can also be issued for self-employed gainful activity. However, if a third-country national wishes to take up residence based on self-employment, he or she must take care of the application by himself/herself. The issuance of a residence permit depends on whether the self-employed activity is in the overall economic interest of Switzerland. This is the case, for example, if a service is to be offered for which there is a strong demand and no oversupply, and if jobs are to be created. Consequently, a business plan and financial statements must be submitted with the application. The applicant must also prove that the self-employed activity will generate enough income to cover the costs incurred in the business as well as the cost of living. In addition, the applicant must be able to procure the necessary equipment or business premises. After entering the county, the third country applicant must register with the resident's registration office at his or her place of domicile in Switzerland within 14 days. The commencement of gainful employment is only permitted after registration has been completed. The spouses of persons with Swiss citizenship, a permanent residence permit, or a long-stay B permit do not need to apply for a work permit, as their right to work will be automatically issued as part of their family-reunification-based residence permit. 2.2.2. Residence without gainful activity Third-country nationals who are no longer gainfully employed, are at least 55 years old, have special personal ties to Switzerland and can provide the necessary financial means can apply for a residence permit with the competent migration office. Special ties to Switzerland include, for example, longer periods of previous residence in Switzerland, intensive business or private relationships or close relationships with close relatives. Even if all requirements are met, pensioners are not entitled to a permit. The decision is left to the discretion of the authorities. The cantons may also grant residence permits to third-country nationals if the applicants can prove that significant fiscal interests exist. The applicants must prove that they will move their centre of life to Switzerland and that they will reside in Switzerland for most of the time. In the case of admission due to significant cantonal fiscal interests, any gainful activity can only be carried out abroad. This does not apply to the management of one's own assets. 2.3. Requirements for UK nationals (Brexit) As a result of the United Kingdom's exit from the European Union, UK nationals are, in Switzerland, no longer considered EU citizens but third-country nationals as of 1 January 2021. UK citizens who have been granted a residence permit before this date could retain it. In order to pursue gainful employment in Switzerland, newly arrived UK nationals are subject to the same entry requirements as third-country nationals as of 1 January 2021. The same rules apply to UK nationals who wish to relocate to Switzerland without gainful activity. Switzerland and UK entered into a Service Mobility Agreement which applies as of 1 January 2021 and allows service providers from the UK to work in Switzerland up to 90 days a year without a work permit. Only a notification obligation is required. Switzerland and the United Kingdom have prolonged the respective agreement until 31 December 2025. 3. Taxation 3.1. Individual taxation 3.1.1. Income and wealth taxes In general, persons resident in Switzerland are subject to income tax on their worldwide income and to wealth tax on their worldwide assets. Household goods and personal effects are, in principle, exempt from wealth tax. Real estate properties located abroad and the income therefrom are also exempt from wealth and income taxes. Such properties must, however, be declared to the Swiss tax authority, as they are relevant for the determination of the applicable tax rates (progression). If assets are held in trusts or similar structures, such vehicles need to be disclosed to the tax authorities and preferably ruled in advance to avoid any adverse tax consequences, especially at the death of the settlor or founder. In many cases, such structures are treated in Switzerland as tax transparent at the level of the settlor or of the beneficiary(ies), depending on who has control over the assets. Income tax is levied at federal, cantonal and communal levels, whereas wealth tax is levied at cantonal and communal levels, but not at federal level. The applicable tax rates vary considerably depending on the canton and commune of residence of the taxpayer and are generally progressive. Qualifying dividends from participations of at least 10% in the capital of a corporation are partially exempt from personal income tax. The exemption at federal level amounts to 30%, meaning that only 70% of the dividends are taxed at the ordinary rate. The extent of the exemption at cantonal level vary again among cantons. 3.2. Taxation of capital gains In principle, there is no capital gains tax on privately held movable property (i.e. shares and other securities) in Switzerland. For instance, gains from the sale of shares held in a company are, as a rule, not subject to taxation in Switzerland. However, in some cases capital gains on privately held movable property are requalified as taxable income (e.g., if the taxpayer is deemed to be a professional trader or in case of a sale to a corporation followed by a distribution of substance dividends within 5 years). Capital gains from the sale of real estate located abroad are not subject to taxation in Switzerland either, but capital gains from the sale of real estate located in Switzerland are subject to real estate capital gains tax at cantonal level. 3.3. Lump-sum taxation Expenditure-based taxation, also referred to as lump-sum taxation ("forfait fiscal" in French), is a simplified assessment procedure (i) for foreign nationals who are domiciled in Switzerland, (ii) who have not been subject to ordinary resident taxation in Switzerland or at least not within the last 10 years and (iii) who do not engage in any gainful activity (employed or self-employed) on Swiss territory. The lump-sum tax is levied at federal and cantonal levels in lieu of the ordinary income and wealth taxes. Most Swiss cantons offer this special regime. Income is calculated based on the total annual global cost of living expended by the taxpayers for themselves and their dependents, with a minimum tax basis of CHF 400'000 for federal income tax and CHF 250'000 – 600'000 for cantonal income tax (varying among cantons). The tax rates applied to this alternative basis are those of the ordinary income tax. Depending on the canton, wealth tax is levied on the basis of e.g. 20 times the taxable income and applying the ordinary wealth tax rate, or as a surcharge on income tax. Certain Swiss double tax treaties exclude taxpayers under lump-sum taxation from treaty benefits. However, taxpayers can generally opt for "modified lump-sum taxation" whereby they pay ordinary income and wealth taxes on the income and assets sourced in a treaty jurisdiction, while the other income and assets are subject to lump-sum taxation. The specific rules of the lump-sum taxation regime are usually pre-discussed with the tax authorities of the canton where the individual or family wishes to take up residency by way of an advance ruling. Asset protection and estate planning structures must be disclosed to the Swiss tax authorities and included in the tax ruling. The authorities are quite used to dealing with trusts and foundations. 3.4. Inheritance and gift tax Inheritance and gift tax is exclusively levied at cantonal and communal level. Except for the cantons of Schwyz and Obwalden, all cantons levy inheritance and gift tax. However, in most of the cantons spouses and descendants are exempted from inheritance and gift tax. 4. Swiss international private law Swiss international private law is flexible and enables people who have relocated to Switzerland to stay connected to their home country. It is codified in the Federal Act on Private International Law (PILA). 4.1. Marital Law When it comes to marital law, the PILA sets forth that a marriage validly celebrated abroad is recognised in Switzerland. Also, foreign decisions or measures relating to the effects of marriage are recognised in Switzerland if they were rendered in the state of domicile or habitual residence of either spouse or in the state in which the marriage was celebrated and the action cannot reasonably be expected to be brought in the state of domicile or habitual residence of either spouse. Furthermore, marital property relations are governed by the law chosen by the spouses. The spouses may choose the law of the state in which they are both domiciled, the law of the place of celebration of the marriage or the law of the state of which either of them is a citizen. The choice of law must be made in writing or must result from the marriage contract. Unless the spouses agree otherwise, a choice of law made after the celebration of marriage has retroactive effect as of the celebration date. 4.2. Inheritance Law Also, within the framework of inheritance law, foreign citizens residing in Switzerland may submit their estate by last will or contract of inheritance to the law of one of their states of citizenship. Such submission lapses if, at the time of death, the deceased no longer had such citizenship or had acquired Swiss citizenship. If a foreign person domiciled in Switzerland does not make a choice of law with respect to his or her estate, his or her estate is governed by Swiss law. Swiss inheritance law has been recently revised and the testator has now more freedom of disposal with regard to his estate and forced heirship. Since 1 January 2023 only the descendants, the spouse and the registered partner have a right to a compulsory portion, but no longer the parents. Now the forced heirship rights of descendants have been reduced and amount to 1/2 instead of 3/4 of their statutory succession rights. The spouse's or registered partner's right to a compulsory portion continues to be 1/2 of their statutory succession rights. If the deceased for example leaves descendants and a spouse or a registered partner, he or she may freely dispose of 50% of his or her estate and bequeath through a testamentary disposition the portion at free disposal, i.e. the other 50%, to any person of his/her choice, for example to a charitable foundation. Lastly it should be noted that Switzerland is a Contracting State to the Hague Convention of 5 October 1961 on the Conflict of Laws relating to the Form of Testamentary Dispositions which, in international inheritance matters, facilitates that a testamentary disposition made in accordance with foreign law be recognized in Switzerland as valid with regard to its form. Even though Switzerland has not its own trust law, Switzerland has ratified the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. Trusts established under foreign law will therefore be recognized in Switzerland. Swiss authorities, especially tax authorities are used to dealing with trust structures. 5. Conclusion In addition to the advantages that Switzerland has to offer in terms of political stability, security, high living standard and geographical location, it also offers an attractive, flexible and advantageous legal and tax environment for foreign nationals. For these reasons, it is well understandable that many foreigners wish to take up residence in Switzerland.   Authors Patricia Guerra Partner Head Private Clients Zurich Thaís Obrist-Bdine Senior Associate Private Clients Tax Expert Fabienne Häusermann Associate Private Clients