Investing in Switzerland via an SCI: Benefits and Pitfalls

Published on October 2, 2025 and written by Cyril Jarnias

Investing in Switzerland via a Real Estate Civil Partnership (SCI)

Investing in Switzerland through a Real Estate Civil Partnership (SCI) can be a lucrative strategy for those looking to diversify their real estate portfolio, as the country offers attractive tax frameworks and a stable market.

Thanks to favorable taxation, the structure of an SCI facilitates the management and transfer of assets within a secure financial environment.

This article examines the essential elements to consider, providing a vital guide for potential investors.

Optimizing the Legal Structure of an SCI in Switzerland

The SCI (Real Estate Civil Partnership) does not exist as a specific legal form in Switzerland, but it is possible to draw inspiration from the French model through equivalent structures, primarily the simple partnership, general partnership (SNC), limited liability company (SARL), or corporation (SA). The choice of structure depends on the investors’ asset and tax objectives.

Structure	Liability	Taxation	Minimum capital	Key points
Simple partnership	Unlimited	Tax transparency	None	Flexible, low cost
General Partnership (SNC)	Joint and unlimited	Tax transparency	None	For active partners
Limited Liability Company (SARL)	Limited to capital	Taxation on profits	CHF 20,000	Good protection for partners
Corporation (SA)	Limited to capital	Taxation on profits & dividends	CHF 100,000	Strict separation of assets/management

Advantages based on investor needs:

• Simple partnership/General Partnership: suitable for family management or among partners in a trusted environment. Low costs, administrative simplicity.
• Limited Liability Company (SARL): ideal for protecting personal assets while maintaining flexibility. Suitable for medium-scale collective investments.
• Corporation (SA): appropriate if needing to attract multiple external or institutional investors and ensuring anonymity/flexible shareholding.

Legal and regulatory aspects specific to Switzerland:

• Obligation to register with the commercial register for commercial companies (SARL/SA).
• Need for detailed articles of association specifying the real estate business purpose.
• Compliance with federal regulations such as Lex Koller limiting real estate acquisition by non-EU/EFTA foreigners.
• Application of Swiss law regarding the transfer of partnership shares and inheritance procedures.

Practical tips for selecting the optimal structure:

• Assess the desired level of separation between private and business assets: prefer SARL/SA for better protection.
• Consider the applicable tax regime: opt for a General Partnership or simple partnership if seeking tax transparency allowing partners to be taxed directly on their share of the result; choose SARL/SA if preferring taxation at the corporate level followed by distribution as dividends.
• Anticipate future needs: possibility to evolve towards a more complex structure like SA/SARL during significant growth or opening to new investors.

Common mistakes to avoid:

• Choosing a too simplified form by default without anticipating inheritance or tax issues related to Swiss real estate.
• Neglecting the importance of customized articles of association tailored to Swiss family/corporate asset objectives.
• Overlooking tax consequences when potentially switching between different legal forms.

Recommended strategies to maximize legal and tax efficiency:

1. Carefully draft a partnership agreement/articles of association precisely organizing rights/voting/succession rights/restrictions on share transfers
2. Systematically consult a local tax expert before any setup involving Swiss real estate assets
3. Prioritize modularity with contractual flexibility over time
4. Ensure all contributions are properly evaluated/documented

Key takeaway: The key lies in personalized arbitration considering not only the initial cost but also—especially—the inheritance/tax perspectives specific to the Swiss framework as well as your individual versus collective risk tolerance.

Tax Benefits of an SCI for Real Estate Purchase in Switzerland

Creating a Real Estate Civil Partnership (SCI) for real estate acquisition in Switzerland presents specific advantages, but also certain limitations in terms of taxation. Here is a structured presentation of the different tax aspects related to the SCI and a comparison with other legal forms.

Tax advantages of the SCI for real estate investment

• Facilitated wealth transfer
  • Holding properties through an SCI allows for more flexible organization of wealth transfer. Partnership shares can be transferred or passed on gradually to heirs, facilitating fractional gifts and potentially optimizing inheritance taxes based on the chosen setup.
• Optimization of inheritance taxes
  • Transfer through partnership shares often allows applying a discount on the value of the transferred real estate (especially when heirs do not hold 100% of the capital), reducing the taxable base when calculating inheritance taxes.
• Collective management and legal flexibility
  • An SCI provides a structured framework for collectively managing a property among several partners, while statutorily defining management, entry, or exit modalities in the share capital.

Specific taxation applied to the SCI in Switzerland

Tax aspect	Treatment within an SCI framework	Specificities/Remarks
Wealth tax	Shares held in an SCI are taxed at their market value within the private Swiss wealth. Following two recent federal rulings, Swiss authorities generally consider SCIs as opaque: their assets are directly included in the calculation of personal wealth tax.	Therefore, there is not necessarily a “tax shelter” through this structure; each partner is taxed individually on their shares according to their tax residence.
Rental income	As long as no dividend is distributed by the real estate company itself (like SA or SARL), there is no direct taxation on rental income at the individual level; however, if income is distributed → standard taxation applies.	This regime applies more to real estate corporations than to true French civil SCIs used by some Swiss residents.
Real estate capital gains	Taxed according to the applicable local regime (France/Switzerland); bilateral agreements avoid double taxation but require cross-declarations.	The setup must be anticipated because personal use = mandatory declaration on both Swiss and French sides if the property is located outside Switzerland.

Exemptions and possible tax strategies with an SCI

• Partial exemptions possible through certain family setups during transfers (applicable discounts).
• Possible optimization through temporary division/usufruct-bare ownership.
• Possibility sometimes—depending on the canton—to benefit locally from favorable property tax related to the real estate business purpose.

Comparison with other legal forms for investing in Switzerland

Legal form	Rental income taxation	Transfer taxation	Wealth tax
Direct ownership	Income integrated into personal tax	Direct transfer → standard taxes	Gross market value
Real Estate Corporation (SA)	Not taxed until distributed	Share transfer → similar logic to partnership shares	Shares taken into account
Real Estate Civil Partnership (SCI)	Often tax transparency or opacity depending on use and canton	Transfer facilitated by gradual share cession; possibility of optimization/discount	Shares included in taxable wealth

Key takeaway:
Establishing an SCI remains particularly interesting for effectively organizing family and succession management of cross-border real estate assets while offering certain legal margins to optimize inheritance taxes. However, contrary to common belief, there is not systematically a “direct tax advantage” or major exemption solely linked to the legal status

To maximize these tax benefits, it is advisable to:

• Carefully study each personal situation,
• Compare local/cantonal regimes,
• Seek specialized advice so that articles of association/scenarios respect bilateral agreements and recent case law,
  because since late 2022-early 2024, several court decisions have reinforced declarative requirements on the Swiss side regarding notably wealth tax and personal occupancy of properties held via French or foreign real estate civil partnerships.

Important text:
Personalized estate planning remains essential: any tax strategy using a corporate structure must consider both Swiss laws and those applicable where the held property is actually located!

Understanding Swiss Corporate Law for an SCI

In Switzerland, the typical structure used for holding and managing real estate properties is not the Real Estate Civil Partnership (SCI) as understood in France. Swiss law does not explicitly recognize the SCI: investors rather resort to corporations (SA), limited liability companies (SARL), or sometimes a simple partnership. However, it is possible to analyze the main Swiss characteristics in comparison with the French model.

Main characteristics of a real estate company in Switzerland

• A Swiss real estate company is generally an SA or a SARL whose main business purpose is the acquisition, management, and possibly disposal of real estate properties.
• The purchase is made by acquiring partnership shares or shares indirectly representing the real estate property.
• There are also so-called “shareholder-tenant” companies where each shareholder has an exclusive right to a specific dwelling while remaining collectively owner of the building.

Characteristic	Switzerland	France (SCI)
Legal form	SA, SARL, sometimes simple partnership	Specific civil partnership
Minimum number of partners	1 (SA/SARL), 2+ for simple partnership	2
Liability	Limited to contributed capital	Unlimited and joint

Legal obligations

• Articles of association must be drafted before a notary for an SA/SARL; mandatory registration in the commercial register.
• Maintenance of accounting compliant with Swiss standards; annual preparation of accounts.
• Compliance with cantonal rules on acquisition by foreigners (“Lex Koller”).

Creation and operational conditions

• Minimum capital: CHF 100,000 for an SA, CHF 20,000 for a SARL.
• A registered office must be established in Switzerland; a locally domiciled administrator is often required.
• Important decisions are made by general assembly according to the articles of association.

Applicable taxation

The company pays profit tax at the cantonal/federal level as well as property taxes based on the location of the real estate.

If profit is distributed as dividends: additional taxation for shareholders/partners according to their tax residence.

Rights and responsibilities of partners/shareholders

Non-exhaustive list:

• Right to complete information on management
• Proportional right to profits/distributions
• Potential obligation for additional contributions if provided in the articles of association
• Liability limited to the amount invested in the case of an SA/SARL

Concrete example: Three investors jointly create a real estate SARL held in equal shares. Each contributes CHF 50,000. Their financial liability will be limited to this amount even if a incident occurs severely affecting the acquired building.

Major differences with the French model (SCI)

Comparative table:

Key point	French SCI	Swiss SI
Status	Civil partnership	Primarily commercial
Taxation	Possible tax transparency	Direct taxation on result
Liability	Unlimited	Limited to capital
Transfer	More flexible via share cession	Possible but taxed differently

In summary:
A foreign investor wishing to use a structure equivalent to the SCI will have to go through the creation of a classic commercial entity subject to strict Swiss rules, particularly regarding its governance, autonomous tax regime, and specific regulatory obligations. This often implies less succession flexibility but offers more asset security thanks to the limitation of personal financial risk.