Switzerland: Lugano vs rest of Switzerland

[sriracha]

Thinking of moving to Switzerland, specifically Lugano for its proximity to Italy. Would move to‌ Italy in reality, but I am about to start a business and Italy ranks super‍ low for taxes, bureaucracy and such.

Don't want to move to Cyprus, Dubai or Latin⁠ America, I had my fair share of living in shitholes populated by primitives, some percents⁤ of higher taxes don't justify living in the thirld world for me anymore.

So living⁣ in Lugano would allow me to frequently be in Italy (30 minutes from Milan etc)⁢ while still running a business in a business-friendly country.

I am a little bit concerned︀ about Lugano though. What is its reputation in Switzerland? You know how sometimes a place︁ looks good on paper, only to find out it's got some major problems? Maybe Lugano︂ is not "real Switzerland"? Like Trier in Germany for example, it's basically a failed city,︃ walking the streets is depressing, but officially you are in Germany.

 

[JackAlabama]

switzerland is not that startup friendly. If you raise capital you need to be︅ aware on its implication on the wealth tax.
Further the difference is not "just some︆ percent" in taxes but it is huge, up to 41% plus very high (often unjustified︇ these days) living cost.
And the have you noticed where the "populated by primitive" tend︈ to got to? They will end up in your expensive neighborhood but without having to︉ pay.
Switzerland is catching up fast with europe (and soon is integrated into the eu).︊

You better setup in zug, esp if not fluent in italian.
And ideally you get︋ the lump sum tax deal before going, then its totally worth it.

 

[Houdini]

there are lot of threads about Switzerland and especially Lugano here on OCT, use the‌ search @peter taradash also mentioned a small town (I don't remmeber the name) which is‍ better than Lugano, but only 5 minutes away, also taxwise.

 

[daniels27]

Peter lives in the Italian exclave Campione d'Italia. While close to Lugano, it is Italian‌ territory with Swiss VAT.

I think, we discussed Switzerland many times here. Yes, things are‍ better than in EU. But it is far from being a place without government.

Whole Ticino is very different from German and French part of Switzerland. Either you will like⁠ it or not. Go there and check it out. In general, people above 40 requiring⁤ access to good health care find the Zürich-Zug area highly attractive. University graduates also like⁣ it a lot. And then some good members here that fall in-between. Just beware that⁢ it is not free. They also have exit tax, wealth tax and uncapped social security︀ contributions.

 

[Alonzo]

I fully agree‍ on that especially if your startup becomes very successful. Wealth tax just ruins it (0.45%⁠ on average in Ticino). While it is much better to have a private company than⁤ a public one in CH (Pratiker method) it is still bad regardless unless you live⁣ in the lowest areas (NW,SZ,ZG,…) it could work really well

 

[Sols]

Italian Switzerland is the Switzerland people think about when they think about Switzerland.

If you're‌ familiar with the German and French parts and like what they have to offer, go‍ spend a week or two in Lugano or other parts of Ticino before making the⁠ move.

I'm not saying it's bad. It's just not quite what most people have in⁤ mind when they envision Swiss life.

 

[sriracha]

That’s what I suspected.⁣

 

[sriracha]

do you mind elaborating on the wealth tax? As far as I⁣ understand, it’s 0,69% in Lugano, which is 6900chf on 1 million chf, which can be⁢ offset by basically any kind of reasonably good financial planning.

 

[daniels27]

Yes, that's it.⁠ But if you have a company making a lot of turnover or if you have⁤ a startup and you sell a small amount of shares at big value, your evaluation⁣ may skyrocket and you will pay wealth tax on something you don't actually have. Apart⁢ from that, the tax is rather fair, given that a normal return on investment is︀ much higher (and that there are no capital gains taxes).

 

[Alonzo]

The rate in Lugano for CHF 1m was‍ 0.41% in 2024 if you look at the official calculator
There are⁤ limits though. Each canton has their own maximum deduction cap

 

[daniels27]

You cannot really offset the tax with deductions. But what I understood was‌ that you can offset it in the way of proper investing where you make more‍ in gains than you pay tax. Or was this a misunderstanding on my behals?

 

[Alonzo]

I think he was referring to how much he can offset aka reduce⁠ his taxable income and wealth. not the tax bill itself

 

[Xshore]

Foreigners moving to Switzerland can get deals with the tax office where they pay a‌ lower amount or fixed sum wealth taxes. Is that only available for the super rich?‍

 

[daniels27]

Available to all non-Swiss. But you'll typically pay more like⁠ 400k in taxes. If that sounds to high, go to Italy, Gibraltar, Greece etc. they⁤ have lower flat-rates.

 

[JohnnyDoe]

Try to hire a nanny, a housekeeper, a gardener, pay a few speeding tickets, have some conversations with public servants and you will quickly wake up from your wet Swiss dream (in any canton).