Moving to Montreux from the United States

Residence permits for US nationals

US nationals are treated as non-EU/EFTA nationals under Swiss immigration law — they must obtain a residence permit under the standard non-EU/EFTA rules, subject to the cantonal quota system. US nationals who are relocating for employment must have their employer apply for a work permit on their behalf. US nationals who are financially independent can apply for a residence permit on the basis of proof of sufficient financial resources.

The permit application process for US nationals typically takes 2 to 4 months. US nationals should begin the process as early as possible — ideally 6 months before the intended move date. A Swiss immigration lawyer can significantly simplify the process.

US taxation and FATCA

US nationals are subject to US taxation on their worldwide income, regardless of where they live. This is a unique feature of the US tax system — most other countries only tax residents. US nationals who relocate to Switzerland remain subject to US federal income tax, and must file annual US tax returns.

The US-Switzerland double taxation treaty prevents double taxation on most types of income. However, the interaction between US and Swiss tax obligations is complex — particularly for US nationals who hold Swiss bank accounts or investments. US nationals relocating to Switzerland should engage a tax adviser who is experienced in both US and Swiss tax law.

FATCA and Swiss banking

The Foreign Account Tax Compliance Act (FATCA) requires Swiss banks to report account information for US persons to the US Internal Revenue Service (IRS). This means that US nationals who open Swiss bank accounts will have their account information reported to the IRS. US nationals should ensure that their US tax affairs are in order before opening a Swiss bank account.

Some Swiss private banks are reluctant to take on US clients due to the compliance burden associated with FATCA. US nationals should be prepared for a more thorough due diligence process when opening a Swiss bank account, and should engage a bank that has experience in serving US clients.

Property purchase for US nationals

US nationals who are resident in Switzerland (with a B or C permit) can purchase a primary residence without Lex Koller restrictions. US nationals who are not resident in Switzerland can only purchase Foreign Buyer Eligible properties under Lex Koller. The most practical approach for US nationals who wish to purchase a primary residence in Switzerland is to take up residence first.

US nationals should also be aware of the US tax implications of owning Swiss property — rental income from Swiss property is taxable in the US, and the sale of Swiss property may give rise to US capital gains tax. Professional tax advice is essential before purchasing Swiss property.

Key points

• US nationals: non-EU/EFTA rules; cantonal quota system; 2–4 months processing
• US worldwide taxation: US nationals remain subject to US tax after relocating to Switzerland
• US-Switzerland double taxation treaty: prevents double taxation on most income types
• FATCA: Swiss banks report US account holders to IRS — ensure US tax affairs in order
• Property: B/C permit holders can buy primary residence freely; non-residents face Lex Koller