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UKRAINE

EXPLAINED: How rich Russians ‘buy’ the right to live in Switzerland

The invasion of Ukraine has shed more light on how Russian wealth opens doors the world over, including the right to live in Switzerland.

The waterfront in the Swiss canton of Zug, which is one of the major destinations for wealthy Russians. Photo: Peter Wormstetter/Unsplash
The waterfront in the Swiss canton of Zug, which is one of the major destinations for wealthy Russians. Photo: Peter Wormstetter/Unsplash

For those from outside the European Union, moving to Switzerland can be relatively difficult for those without a job offer or a close familial connection. 

However, the Swiss visa framework has been set up in such a way that the über-wealthy can move to Switzerland without active employment or a family connection. 

Swiss news outlet Watson reports that 362 people have taken advantage of the visa scheme, 172 of whom are of Russian origin. 

Russians far outnumber any other foreigners in Switzerland pursuant to the scheme, with 52 Chinese, 31 Canadians, 29 Americans, 24 Turks, 20 from Saudi Arabia and 19 from Ukraine and Brazil. The figures show 16 Mexicans have taken advantage of the scheme, along with 13 people from India. 

Despite some indications from Swiss politicians that the scheme should come to an end, it remains in force. 

Here’s what you need to know. 

READ MORE: How wealthy foreigners can ‘buy’ a Swiss residence permit

How do rich Russians and non-EU foreigners buy a residency permit? 

There are a variety of ways in which wealthy foreigners can move to Switzerland. 

This includes buying a Swiss company, investing in a Swiss company or opening up a subsidiary of another company in Switzerland, along with purchasing real estate which generates jobs and revenue. 

Under the Swiss Aliens Act, wealthy non-EU foreigners can move to Switzerland. 

Article 30 of the Act allows people to move to Switzerland if they agree to ‘flat-rate’ taxation, whereby they pay tax on their expenses rather than their income. 

While the system allows people to move to most parts of Switzerland, those utilising an Article 30 visa tend to stay primarily in Geneva, Ticino, Bern, Vaud and low-tax Zug. 

EXPLAINED: Why Switzerland is a magnet for Russian money

Tax lawyer Christopher Steckel told Swiss news outlet Watson that Switzerland and its cantons benefit financially from this program. 

“This system is practically the by-product of globalisation. People, families and wealth no longer stay in one place.” 

“Of course, a country benefits when the wealthy move in, buy houses, send their children to private schools, eat out and generally spend a lot of money.”

Although the exact amount a person needs to be taxed on is not explicit, experts estimate it starts at 500,000 francs. 

Members of the Greens, Social Democrats and the GLP have called for the rule to be abolished. 

EXPLAINED: What’s the difference between permanent residence and Swiss citizenship?

Is Switzerland really an ‘oligarch’s paradise’?

Commentary since the invasion has focused on how prevalent Russian money is in Switzerland. 

Swiss broadsheet NZZ said Switzerland over the years became a “paradise for Russian oligarchs”, with few restrictions provided people could invest enough to stay. 

Jon Knight wrote in Germany’s FAZ magazine that the permissive regulatory structure has rendered Switzerland a “pirate haven” for Russia and its oligarchs. 

“Switzerland is very often the point of contact for people who don’t always follow the law. The spectrum is broad, ranging from entrepreneurs who bribe from here, to sports associations with corrupt members, to financial institutions that are open to potentates and oligarchs… (The Swiss people) no longer want to be the port where pirates meet to stock up on everything they need for their raids.”

While Switzerland has taken some steps to curb the practice, including imposing sanctions on some of the Russian elite, the NZZ reports that few Russians in Switzerland fear losing their assets in the long term. 

“For the time being, the oligarchs do not have to fear that the Swiss authorities will confiscate their luxury properties and cars, as is the case in France and Great Britain.”

KEY POINTS: What you need to know about golden visas in Switzerland

“The Swiss Sanctions Ordinance stipulates that all assets and economic resources of persons against whom sanctions have been imposed are frozen. They can still use their houses and cars – they just can’t sell them or use them commercially.

Switzerland has imposed sanctions on 874 Russians, freezing a total of six billion francs since March. 

The sanctions do not however allow Switzerland to revoke a person’s residency permit. 

While this can take place, the process is difficult and has not yet been invoked, Swiss media reports. 

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UKRAINE

‘Limited capacity’: How the Swiss right wants to shut out western Ukrainian refugees

With about 51,000 refugees from Ukraine currently in Switzerland, right-wing politicians argue in favour of introducing geographic vetting in regards to who can qualify for Status S, saying Switzerland has "limited capacity" for refugees.

'Limited capacity': How the Swiss right wants to shut out western Ukrainian refugees

After Russia invaded Ukraine on February 24th, the Federal Council activated, for the first time ever, the ‘S status’ authorising Ukrainians and Ukraine residents fleeing the war to live temporarily in Switzerland.

The special status is initially valid for a year, but can be extended. Anyone who is still in Switzerland after five years receives a B permit.

Included is also the right to work, as well as free health care and language courses. The refugees also have the right to free public transportation, but this perk will end on May 31st, with no word yet whether it will be renewed.

READ MORE: Switzerland’s special ‘S permit’ visa program: What Ukrainians need to know

Now, however, “the great solidarity with refugees from Ukraine is cracking”, according to SonntagsZeitung, which reports that rightwing politicians in Switzerland are “beginning to question our country’s culture of hospitality”.

The right-wing Swiss People’s Party (SVP), which has consistently opposed sanctions on Russia, is calling on the government to limit the S status  only to Ukrainians who come from the eastern part of the country, which is currently most impacted by Russia’s invasion.  

This movement is spearheaded by MP Martina Bircher, who argues that Switzerland is reaching its limits in terms of the number of refugees it can accommodate and support, and it should therefore grant S status only to those fleeing the most conflict-ridden regions of Ukraine, like the eastern part.

Other right-of-centre groups are in favour of this “regionalisation” as well. Andrea Caroni, president of the centre-right Liberal Party, supports the idea of granting the special status based on the geographical evolution of the Ukrainian conflict, saying Switzerland “ultimately has limited capacity” to absorb refugees from Ukraine. 

He said, however, that such a measure “must be coordinated at the European level.”

Not everyone, however, agrees with Bircher’s proposal.

According to Gerhard Pfister, president of the Centre Party, adopting geographical limitations “would create two classes of Ukrainians. This is not right”.

It is unclear how the SVP would seek to draw barriers to distinguish between the east and west of the country. 

As for the Conference of Cantonal Directors of Social Affairs, vice-president Marianne Lienhard said the organisaton will discuss the proposal at its next meeting at the end of May.

Cantons are directly affected by the influx of Ukrainians, as they will eventually bear the cost of supporting the refugees — the cost which is currently borne mostly at a federal level.

The “NZZ am Sonntag” calculated that in 2022, the costs of housing, health insurance, and general support will amount to between 1.25 and 2.25 billion francs. In 2023, these expenses could climb to 7.5 billion.

“Fake” refugees

In an article she wrote for the SVP website, Bircher also argued that some refugees pretending to be Ukrainian actually aren’t.

As an MP from Aargau, she claims that out of 12 people who received the S status in a small town in her canton, only seven were Ukrainian nationals. The other five came from Africa.

Among them are  “Kenyan and Lebanese men who claim to have lived in Ukraine or who actually lived there before the war, but who do not have a Ukrainian passport”.

The S permit scheme does not only provide protection for Ukrainian citizens, but also citizens of other countries who live in Ukraine. 

While reserved predominantly for Ukrainians, the S status has also been occasionally granted to citizens of other countries. 

According to the State Secretariat for Migration (SEM), about 1,000 “other” refugees received this status as well, including 238 Russians, and  people from Germany, France, Italy, the United States, Canada and Australia.

In such cases, children have a different passport from their parents, but it is the parents’ nationality and place of residence that defines whether the status is granted.

So it could happen that the parents have Ukrainian passports, while their children are citizens of other nations.

READ MORE: Swiss MPs call for Russian money to be used to reconstruct Ukraine
 

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