Working for a Swiss remote company - where should I live?

Taxes
1

Context
I joined a software company in Lausanne 2.5 years ago.
Shortly after COVID hit they announced we will remain a remote company.
Currently holding permit B for 5 years.

I didn’t change my address but I sub-rented my apartment (with 0 profit) while keeping my main address in Lausanne and either traveling the world or staying in my parent’s place.
Now, if I am not mistaken by laws I should spend at least 180 days in Switzerland which I do each year.

Few dilemmas I face and would love to hear your thoughts on:

  • If I return to Switzerland, should I move (at least formally) to a canton with the lowest tax to save the money? (I don’t really care about location where I live)
  • If I move to a different Canton, I believe I will lose my opportunity to get Swiss citizenship after 10 years? (I have heard that in order to gain citizenship you have to live in one canton for 10 years?) Now the reason for me why this could be interesting is just in case I want to start a family in Switzerland in the future.
  • I had thoughts of buying an apartment in Switzerland in 2023 and once I gain permit C, to start renting it out (or live in it). With permit B, I can officially only live in the apartment I own.
  • Lastly, what concerns me is the fact that one day I’ll want to change the company and I might possibly need to go back to the office which might be uncomfortable in some very remote locations.

I know a lot of the answers will depend on circumstances but I wanted to hear the opinions of some of the folks here on what would you do in my shoes?

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Are you an EU national? (If this is your real name, I guess you are :laughing:).

Sorry, it is probably not relevant in your case:

If they meet the required conditions, nationals of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and Sweden as well as EFTA nationals (Iceland, Liechtenstein, Norway) are granted settlement permits pursuant to settlement treaties or reciprocal agreements after five years’ regular and uninterrupted residence in Switzerland. No such treaties exist for nationals of the other EU member states.

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It is 10 years all together in Switzerland. For Vaud you have to live last 2 years in the canton, for other cantons it is similar.

But to get a Swiss nationality, you have to get a C permit first. So check requirements for it.

4

At a young age, I will recommend not to waste your prime years in a small city of a low tax canton.

You should assess the price of the rent in your calculation.

Take also into account that the location of your residence will matter to get the Swiss nationality.
Small villages councils are tougher on the selection compare to big city like Geneva.

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I’ll try to address some of your questions:

While at first sight it might seem a good idea to move to a canton with a lower tax imposition it’s not that easy and it depends mostly on your salary.

For instance the rent price in the new canton - hello Zug - might end up offsetting your savings in terms of tax or making it not worth the effort.

There’re certain rules to be eligible for naturalisation at the federal, cantonal and municipal levels.

You do need 10 years of continuous residence in Switzerland and then it really depends on the canton and municipe.

As a matter of example in Vaud you need at least 2 years of residence in the canton.

Yes, I’ve seen some cases of people going to live literally in the mountains and then being called to the office after a new hybrid setup was established.

It’s indeed a risk you should consider.

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This makes a lot of sense if you are a high earner, and if you expect your income to continue growing.

For a low or median income, this might not make much sense, since one can live in a high-tax “premium location” for a comparatively low amount of extra paid taxes (the difference is not so significant at lower incomes). I.e. one can be at the receiving end of redistribution.

You have to have lived in CH for 10 years in total. At the 10 year mark:

  • The most restrictive cantons (SZ) will require you to have lived in the canton for the last 5 years (year 6-10). The less restrictive cantons (ZH) will require 2 years (year 9-10). So generally, no problem moving in the first 5 years.
  • You will need a C permit. A C permit is granted at earliest after 5 years of continuous residence in CH. So for years 6-10 you’ll have to have lived in CH continuously (if you don’t have a C permit already).
    • Since you mention that you’ve been in CH for 5 years, consider requesting a C permit now/immediately. It makes and will make various things significantly easier. (But make sure to consider the impact on taxation if you’re taxed exclusively at source now).
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My understanding is that @Marek is on a B permit which is lasting 5 years but in CH since 2.5 years-> if so he’s not eligible for C permit yet

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Ah right, sorry, I’ve misunderstood the timing.

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Not answering directly to the questions, but could be quite relevant if true:

Several companies in ZH have instituted a WFH / Remote policy where I’ve seen mentioned often that working abroad is only allowed for up to two weeks a year (10 days? 14 days?).

One of my clients swears that it’s a tax authority limitation imposed on companies, not their own policy.
So, even for fully remote roles, the requirement of staying within Switzerland for most of their working days remains for employees. They plan to check compliance by logging and auditing VPN connection addresses (something not foolproof, but standard that companies already do for e.g. ensuring compliance to data access from within CH/EU).

Not sure whether that requirement of two weeks max is indeed a must, and what other limitations apply, if any. In case you’re planning to keep residency in CH for only the sake of permit (or even to use the 180+1 days calculation), probably it’s best that you check if the above has any relevance for your company/canton.

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The first question is where is the employee’s fiscal residence? If the employee works full time from another country, the work contract should comply with this country and the social contributions need to be paid in this country.

Some full remote companies use this service to manage work contracts for each country

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Hey, agree on fiscal residency, that’s a different ballpark altogether.

I’m giving the OP a heads-up for the specific use case where one would:

  1. Have an employment contract with a Swiss entity
  2. Have fiscal residency in Switzerland, according to the existing work permit, or new CH location with more tax advantages
  3. Allowed to work remotely
  4. Intend to work remotely outside CH for more than two weeks, let’s say even months at a time.

In such cases, assuming no other limitations are specified in the work contract (e.g. if any “place of work” is indicated, or that domicile needs to be at all times updated with HR and needs to be in CH, etc.), I’m recommending some research, and myself curious to understand as well if possible.

The domicile AFAIK can change outside CH, as long as you can prove that your residency is where you state it is (if memory serves some other conversations in the forum, in the past, were focusing on what constitutes proof of residency, i.e. “focus and center of your life” or similar).

e.g. fully remote swiss employee wants to work from a small french riviera airbnb for three months off-season, clock in their 8.4hrs and then go take a bath and enjoy life, not a problem for residency purposes, but would it be possible for the OP?

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Keep in mind that most of the details mentioned in this post are applicable to EU citizens or US/CA citizens (C permit after 5 years of continuous residence).

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  • Note, that anybody can request a C permit regardless of nationality after 5 years if “successfully integrated” (mostly means doing a language test + some other criteria).
  • Some nationalities are entitled to receive a C permit after 5 years unconditionally.
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Never heard about it. According to the official website

https://www.sem.admin.ch/sem/en/home/themen/aufenthalt/eu_efta/ausweis_c_eu_efta.html

Settled foreign nationals are foreign nationals who have been granted a settlement permit after five or ten years’ residence in Switzerland.

I have listed above 5 years exceptions.

The right to settle in Switzerland is not subject to any time restrictions or conditions.

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The keyword is “Vorzeitige Erteilung der Niederlassungsbewilligung auf Grund erfolgreicher Integration”

For example for canton ZH, see section 5 of the following document.

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Just adding my two cents here, but bear in mind that the employee & employer are obliged to tax laws when it comes to remote work (when working from abroad / nearby countries), here is an interesting document from the FER (sorry if it’s in FR) :

https://fer-ge.ch/documents/37150/371585/Guide_teletravail_transfrontalier_FR_13.01.2022_Logos.pdf/f683945e-bf92-b281-e3c1-7671dc9273cb?t=1647851435203

Lastly I would consider in your case the “risk” if the company decides to change their “home office policy”, knowing that it’s based in Lausanne and that you are willing to become a Swiss citizenship I would stay in canton the Vaud (if I were you) ; as this if anything happens (loose your job, policy change, etc.) then you won’t “loose” the years you stayed in the Canton to obtain the “Naturalisation”

Hope it helps ! :slight_smile:

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