Switzerland is a haven for the super rich and more are on their way
Switzerland has been attracting the world’s super rich for
decades.
The country's famous banks, discretion, security – along
with breathtaking scenery – are just some of the reasons why millionaires from
around the world are drawn to the small Alpine nation.
The pandemic has further fuelled the run on luxury
properties in Switzerland, according to UBS bank.
Property prices are soaring, with the highest recorded in
the municipality of Cologny near Geneva, where real estate costs some €33,000
(RM163,895) per square metre.
That is partly because the outbreak of the coronavirus has
increased people's longing for security, according to analysts at UBS.
They also note that in Switzerland, the risk of higher taxes
for top earners is – unlike in some places abroad – manageable "thanks to
a stable fiscal position”.
Switzerland's debt ratio is 40% of gross domestic product.
In comparison, this rises to around 70% in Germany, and above 100% in France.
In 2020, the list of Switzerland’s 300 richest people was
topped by the heirs of late Ikea founder Ingvar Kamprad, according to Bilanz
magazine.
The list also includes many others from abroad, such as
Belarusian billionaire Andrey Melnichenko, and French entrepreneur Gerard
Wertheimer, who holds the majority of shares at Chanel, together with his
brother. Then there's Dutch entrepreneur Charlene Carvalho-Heineken, whose
father founded the Heineken brewery.
Credit Suisse estimates that 14.9% of the population were
millionaires in 2020, meaning every sixth inhabitant in the country of some 8.5
million. That gives the country the greatest concentration of millionaires
worldwide, aside from small states such as Monaco.
Switzerland also has 135 billionaires, according to Bilanz.
Meanwhile, more wealthy people are heading to Switzerland,
it seems. Lawyer Enzo Caputo, who focuses on foreign clients who are seeking to
start a life in Switzerland, says the number of queries from clients has grown
by 25%. Other lawyers suggest the figure has risen by 40%.
These numbers are impossible to verify, however, as
discretion is key among such circles.
Caputo negotiates contracts with Switzerland’s cantons on taxation
to enable clients to pay a lump sum, he tells dpa. That means new arrivals do
not have to declare their assets at all.
That comes at a price: a residence permit and flat-rate tax
package was available in the canton of Jura for an unmarried non-European for
the equivalent of around €135,000 (RM670,480) a year, according to broadcaster
RTS.
But even without these kinds of deals, the conditions are
more than favourable in Switzerland. Depending on the canton, the income tax
rate of around 22% is only half the level in many other countries.
People tend to plan a move to Switzerland a long time in
advance, says Caputo, listing the steps. “First, the assets are placed in a
Swiss bank with a good asset manager. Then the family arrives, followed by the
head of the family.”
According to analyses by the Boston Consulting Group, no
other country in the world has so much wealth held by foreigners who do not
live in the country – some US$2.4bil (RM10.18bil). This amounts to a quarter of
all global foreign assets, and more than in Hong Kong and Singapore.
Real estate agents are also seeing a surge in interest.
“Especially in the luxury segment, demand has increased
enormously since the summer of 2020,” Franko Giovanoli, who is responsible for
the exclusive St Moritz region at his firm Ginesta, tells dpa.What people are
looking for is a secure investment, he says.
That could be a 'modest' three-bedroom holiday apartment,
for example. Prices start at one to two million Swiss francs (RM4.66mil to
RM9.33mil).
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