Foreign Ownership Regulations in Switzerland

Published on September 29, 2025 and written by Cyril Jarnias

Switzerland, renowned for its economic stability and exceptional quality of life, attracts numerous foreign investors eager to acquire real estate. However, the Alpine country has established a strict regulatory framework to govern these acquisitions, aiming to preserve its real estate market and national identity. In this article, we will explore in detail the rules governing foreign ownership in Switzerland, examining legal restrictions, the approval process, the rights and obligations of foreign owners, as well as some expert advice for international investors.

Lex Koller: Guardian of Swiss Real Estate Heritage

At the heart of foreign ownership regulation in Switzerland lies the Lex Koller, officially known as the Federal Act on the Acquisition of Real Estate by Persons Abroad (LFAIE). Introduced in 1983, this law aims to prevent excessive foreign control over Swiss land and maintain balance in the national real estate market.

The Lex Koller imposes significant restrictions on the acquisition of real estate by foreign persons. It applies to individuals who are not nationals of a European Union (EU) or European Free Trade Association (EFTA) member country and who do not have their legal and actual domicile in Switzerland. It also concerns legal entities headquartered abroad or controlled by foreigners.

The main restrictions of the Lex Koller are as follows:

• The acquisition of residential properties is generally prohibited for persons abroad, except for specific exceptions.
• The purchase of undeveloped land is heavily limited.
• Investments in commercial real estate require authorization.
• Secondary residences are subject to strict quotas in certain tourist regions.

It is important to note that these restrictions vary by canton, with some being stricter than others in their application of the law.

The Obstacle Course: Navigating the Approval Process

For foreign investors wishing to acquire real estate in Switzerland, the approval process may seem complex and tedious. However, with a good understanding of the steps to follow and adequate preparation, it is entirely possible to successfully complete a real estate project.

The first step is to determine whether the acquisition requires authorization under the Lex Koller. Certain categories of properties and buyers are exempt from this requirement. For example, EU/EFTA nationals residing in Switzerland can generally purchase real estate without major restrictions.

If authorization is required, the application must be submitted to the competent cantonal authority. The file must include:

• A detailed description of the property
• Information about the buyer and seller
• The intended use of the property
• A justification for the investment

The review process can take several months, during which the cantonal authority will assess the compliance of the application with current legislation. It will consider factors such as the impact on the local real estate market, the economic interests of the region, and compliance with any secondary residence quotas.

It is crucial to note that obtaining authorization is not guaranteed. The authorities have significant discretionary power and can refuse an application if they deem it does not meet the established criteria or could negatively impact the local real estate market.

In case of refusal, it is possible to appeal the decision, but this may lead to additional delays and costs. This is why it is highly recommended to ensure the strength of your application before submitting it, ideally with the help of a lawyer specialized in Swiss real estate law.

Rights and Duties: What It Means to Be a Foreign Owner in Switzerland

Once authorization is obtained and the acquisition is completed, foreign owners in Switzerland enjoy many rights but must also comply with certain specific obligations.

In terms of rights, foreign owners benefit from strong legal protection. The Swiss Constitution guarantees the right to property, and the country’s laws provide high legal security to owners, regardless of their nationality. This includes protection against arbitrary expropriation and the right to freely dispose of one’s property, within the limits set by law.

Foreign owners can also benefit from the same tax advantages as Swiss owners, particularly regarding the deduction of mortgage interest and property maintenance expenses.

However, these rights come with important obligations:

• Respect of declared use: The property must be used in accordance with the declared use in the authorization application. Any change in use requires new approval.
• Resale restrictions: In some cases, the Lex Koller imposes minimum holding periods before the property can be resold.
• Tax obligations: Foreign owners are subject to real estate wealth tax and rental income tax, if applicable.
• Property maintenance: Like any owner, they are required to maintain the property in good condition and comply with local urban planning and environmental regulations.

It is also important to note that owning real estate in Switzerland does not automatically grant residency rights. Foreign owners must comply with immigration laws if they wish to stay in Switzerland beyond the limits allowed for tourists.

Finally, foreign owners must remain vigilant about legislative changes. Switzerland regularly revises its foreign ownership laws, and it is crucial to stay informed of changes that could affect their rights and obligations.

Winning Strategies: Expert Advice for Foreign Investors

Investing in Swiss real estate as a foreigner can be a complex but potentially very rewarding endeavor. Here is some expert advice to maximize your chances of success:

1. Do your homework: Before diving in, take the time to thoroughly study the Swiss real estate market and the specifics of the region that interests you. Each canton has its own particularities in terms of regulations and market conditions.

2. Build a local team: Surrounding yourself with local professionals is crucial. A lawyer specialized in Swiss real estate law, a notary, and a real estate agent familiar with the local market will be valuable allies throughout the process.

3. Consider alternatives: If direct purchase proves too complicated, explore other options such as investing in Swiss real estate funds or acquisition through a Swiss company, which can offer more flexibility.

4. Plan long-term: Resale restrictions can be binding. Ensure your investment fits into a long-term strategy and that you are prepared to hold the property for several years.

5. Be transparent: In your dealings with authorities, transparency is key. Provide all requested information clearly and honestly to facilitate the approval process.

6. Stay informed: Laws and regulations evolve. Make sure to stay updated on legislative changes that could affect your investment.

7. Consider renting: If you don’t use the property full-time, renting can be an interesting option to make your investment profitable. However, ensure this is permitted under your purchase authorization.

8. Optimize your tax structure: Consult a tax expert to structure your investment in the most advantageous way possible, while staying within legal limits.

9. Explore free zones: Some regions, such as ski resorts, may have more flexible regulations for foreign buyers. These areas can offer interesting opportunities.

10. Be patient: The acquisition process can be lengthy. Patience is an essential virtue for succeeding in Swiss real estate as a foreigner.

Conclusion: A Challenge Worth Taking

Acquiring real estate in Switzerland as a foreigner is a complex process, governed by strict regulations aimed at preserving the balance of the national real estate market. The Lex Koller, the cornerstone of this regulation, imposes significant restrictions but does not completely prohibit foreign investments.

To succeed, foreign investors must carefully navigate the approval process, fully understand their rights and obligations as owners, and adopt a strategic long-term approach. Although the challenges are numerous, the potential rewards—both in terms of quality of life and financial returns—can be substantial.

The key to success lies in meticulous preparation, a thorough understanding of local regulations, and the support of an experienced team of professionals. With these elements in place, real estate investment in Switzerland can offer a unique opportunity to own a piece of one of the world’s most stable and prestigious real estate markets.

Whether you’re considering acquiring a primary residence, a vacation home in the Alps, or a commercial investment, Switzerland offers a unique framework that, despite its complexities, continues to attract investors from around the world. With the right approach and proper advice, your dream of property ownership in Switzerland can become a rewarding and lasting reality.