Why are Zug and Schwyz home to the most millionaires in Switzerland?

Switzerland is known for its wealth. But two of the country's smallest cantons have the most millionaires in Switzerland on a per capita basis. Why?

Why are Zug and Schwyz home to the most millionaires in Switzerland?
View over Lake Zug with the old town of Zug and the Zytturm. By Schulerst - Own work, CC BY-SA 3.0, Wikicommons

Switzerland is known for its wealth.

Although most Swiss residents are likely to be viewed as ‘rich’ on a world-wide basis, it is also home to more ‘mega-rich’ people per capita than any other nation.

Zug and Schwyz top the list per capita 

The small, central cantons of Zug and Schwyz have beaten out the larger, better known cantons like Zurich and Geneva when it comes to the amount of millionaires on a per capita basis.

According to analysis of government figures completed by Swiss tabloid Blick, one in eight residents of these cantons are millionaires.

READ MORE: Which Swiss canton has the most millionaires?

This compares with one in 16 per 1,000 taxpayers for the rest of Switzerland.

There are 132 millionaires per 1,000 taxpayers in Zug and 125 per 1,000 in Schwyz.

This is followed by Nidwalden (104), while Switzerland’s least populous canton is in fourth place: Appenzeller Innerrhoden (93).

Zurich, Switzerland’s most populous canton, is in fifth place – which also means it has the most millionaires in total.

There are 92 millionaires per 1,000 taxpayers in Zurich.

The highest-placing French-speaking canton is Geneva, where there are 62 millionaires per 1,000 taxpayers, followed by Vaud with 57.

Why Zug and Schwyz?

While they’re picturesque, it may seem somewhat surprising that these two cantons attract the most millionaires on a per capita basis.

However, a major reason for this is these cantons low tax rates, which attract high-income individuals from other parts of the country and indeed the world.

Christoph Schaltegger, professor of political economy at the University of Lucerne, told Blick that this was a good thing for smaller cantons.

“It gives remote and structurally weak regions the opportunity to assert themselves against attractive urban centres,” he said.

While larger regions like Zurich “have a lot to offer”, smaller regions need to use tax law as a way to compete. 

Schaltegger argues that this is important for nationwide equality, as otherwise “the gap between town and country would widen, the periphery would be left behind.”

Kurt Schmidheiny (51), economics professor at the University of Basel, told Blick that other factors such as costs of housing are far less likely to play a role for the mega-rich than taxation. 

“For a multimillionaire, higher housing costs hardly play a role – no matter how luxurious they are,” Schmidheiny said.

“Moving to a tax haven is only worthwhile for them.”

More millionaires per capita

While precise estimates are difficult to come by, Switzerland is home to the fourth largest number of millionaires (based in US dollars) of any country in the world.

According to pre-pandemic estimates by Credit Suisse, Switzerland’s 810,000 millionaires places it fourth after the United States (15 million), China (1.3 million) and Japan (1.1 million).

But it is on a per capita basis where Switzerland’s shiny wealth really captures the eye, with Switzerland’s population far smaller than the United States, China and Japan.

There are 62 millionaires for every 1,000 Swiss taxpayers.

This has increased from 11 per 1,000 taxpayers in 1969.

But the location of those millionaires – i.e. in which of Switzerland’s 26 cantons they live – may be surprising, both to Swiss residents and those abroad.

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Is Switzerland’s male-only mandatory military service ‘discriminatory’?

Under Swiss law, all men must serve at least one year in compulsory national service. But is this discriminatory?

Swiss military members walk across a road carrying guns
A new lawsuit seeks to challenge Switzerland's male-only military service requirement. Is this discriminatory? FABRICE COFFRINI / AFP

All men aged between the ages of 18 and 30 are required to complete compulsory military service in Switzerland. 

A lawsuit which worked its way through the Swiss courts has now ended up in the European Court of Human Rights, where the judges will decide if Switzerland’s male-only conscription requirement violates anti-discrimination rules. 

Switzerland’s NZZ newspaper wrote on Monday the case has “explosive potential” and has “what it takes to cause a tremor” to a policy which was first laid out in Switzerland’s 1848 and 1874 Federal Constitutions. 

What is Switzerland’s compulsory military service? 

Article 59 of the Federal Constitution of Switzerland says “Every man with Swiss citizenship is liable for military service. Alternative civilian service shall be provided for by law.”

Recruits must generally do 18 weeks of boot camp (longer in some cases). 

They are then required to spend several weeks in the army every year until they have completed a minimum 245 days of service.

Military service is compulsory for Swiss men aged 18 and over. Women can chose to do military service but this is rare.

What about national rather than military service? 

Introduced in 1996, this is an alternative to the army, originally intended for those who objected to military service on moral grounds. 

READ MORE: The Swiss army’s growing problem with civilian service

Service is longer there than in the army, from the age of 20 to 40. 

This must be for 340 days in total, longer than the military service requirement. 

What about foreigners and dual nationals? 

Once you become a Swiss citizen and are between the ages of 18 and 30, you can expect to be conscripted. 

READ MORE: Do naturalised Swiss citizens have to do military service?

In general, having another citizenship in addition to the Swiss one is not going to exempt you from military service in Switzerland.

However, there is one exception: the obligation to serve will be waved, provided you can show that you have fulfilled your military duties in your other home country.

If you are a Swiss (naturalised or not) who lives abroad, you are not required to serve in the military in Switzerland, though you can voluntarily enlist. 

How do Swiss people feel about military and national service? 

Generally, the obligation is viewed relatively positively, both by the general public and by those who take part in compulsory service. 

While several other European countries have gotten rid of mandatory service, a 2013 referendum which attempted to abolish conscription was rejected by 73 percent of Swiss voters. 

What is the court case and what does it say? 

Martin D. Küng, the lawyer from the Swiss canton of Bern who has driven the case through the courts, has a personal interest in its success. 

He was found unfit for service but is still required to pay an annual bill to the Swiss government, which was 1662CHF for the last year he was required to pay it. 

While the 36-year-old no longer has to pay the amount – the obligation only lasts between the ages of 18 and 30 – Küng is bring the case on principle. 

So far, Küng has had little success in the Swiss courts, with his appeal rejected by the cantonal administrative court and later by the Swiss Federal Supreme Court. 

Previous Supreme Court cases, when hearing objections to men-only military service, said that women are less suitable for conscription due to “physiological and biological differences”.

In Küng’s case, the judges avoided this justification, saying instead that the matter was a constitutional issue. 

‘No objective reason why only men have to do military service’

He has now appealed the decision to the European level. 

While men have previously tried and failed when taking their case to the Supreme Court, no Swiss man has ever brought the matter to the European Court of Human Rights. 

Küng told the NZZ that he considered the rule to be unjust and said the Supreme Court’s decision is based on political considerations. 

“I would have expected the Federal Supreme Court to have the courage to clearly state the obvious in my case and not to decide on political grounds,” Küng said. 

“There is no objective reason why only men have to do military service or pay replacement taxes. On average, women may not be as physically productive as men, but that is not a criterion for excluding them from compulsory military service. 

There are quite a few men who cannot keep up with women in terms of stamina. Gender is simply the wrong demarcation criterion for deciding on compulsory service. If so, then one would have to focus on physical performance.”

Is it likely to pass? 

Küng is optimistic that the Strasbourg court will find in his favour, pointing to a successful appeal by a German man who complained about a fire brigade tax, which was only imposed on men. 

“This question has not yet been conclusively answered by the court” Küng said. 

The impact of a decision in his favour could be considerable, with European law technically taking precedence over Swiss law.

It would set Switzerland on a collision course with the bloc, particularly given the popularity of the conscription provision. 

Küng clarified that political outcomes and repercussions don’t concern him. 

“My only concern is for a court to determine that the current regulation is legally wrong.”