The Lex Koller Workaround: How Foreign Investors Buy Swiss Property

Inside the legal playbook that foreign investors use to navigate Switzerland's restrictive property laws.

contributor:sstonelabs@gmail.com • Strategy • 2026-02-17

It is a widely held belief in international investment circles that acquiring Swiss real estate as a foreigner is nearly impossible. The country's reputation for stability, privacy, and a strong currency makes its property market exceptionally desirable, yet it is guarded by a formidable legal barrier known as the Lex Koller. This legislation, designed to prevent foreign over-dominance of Swiss land, appears to shut the door on most non-resident investors. However, behind this restrictive facade lies a sophisticated playbook of legal workarounds, corporate structuring, and strategic exceptions that savvy foreign investors have used for decades to navigate the regulations and secure a piece of the coveted Swiss property market. This article unveils that playbook, detailing the established and emerging strategies for acquiring Swiss real estate despite the law.

A Brief History of a Controversial Law

The origins of the Lex Koller date back to the 1960s, born from a uniquely Swiss political concern known as Überfremdung — the fear of excessive foreign influence on Swiss soil. The first federal resolution in 1961, the Lex von Moos, established a temporary permit system for foreign property acquisitions. This was followed by a series of increasingly stringent measures: the emergency Lex Celio in 1972, which banned foreign capital from domestic real estate, and the stricter Lex Furgler in 1974. These culminated in the 1983 passage of the Federal Act on the Acquisition of Real Estate by Persons Abroad (BewG), which came into force on January 1, 1985, and remains the foundation of the law today.

The legislation underwent a major liberalization in 1997, when commercial real estate was fully exempted from the authorization requirement. It was during this revision, led by Federal Councillor Arnold Koller, that the law adopted its now-familiar informal name. Further easing occurred in 2002, when bilateral agreements with the EU brought EU/EFTA nationals with Swiss residence permits in line with Swiss citizens for property purchases, and again in 2005, when shares of listed real estate companies were exempted from authorization. Despite several parliamentary debates and a failed attempt at abolition between 2007 and 2013, the law has persisted, embodying a continuous tension between protecting the domestic market and attracting foreign capital. Today, 26 different cantonal authorities enforce the Lex Koller, and practice varies significantly from one jurisdiction to the next, creating a patchwork of opportunity and restriction.

The Primary Gateway: Commercial Property Exemption

The single most important workaround for foreign investors is the complete exemption of commercial real estate from the Lex Koller authorization requirement, introduced in 1997. This allows any foreigner to freely purchase properties intended for economic activity without needing a permit. The category is broad, encompassing office buildings, retail spaces, industrial facilities, warehouses, hotels, restaurants, workshops, and medical practices. Crucially, the property does not need to be used by the buyer's own business; it can be rented out to third parties, making it a straightforward vehicle for pure capital investment.

The complexity arises with mixed-use properties. An apartment located within a commercial building can only be acquired without a permit if it is deemed essential for business operations, such as a janitor's flat, or if the property is situated in a zone with official minimum residential quotas. In practice, some cantons, like Geneva, allow companies with a genuine operational purpose to hold up to 30 percent of their portfolio value in non-commercial (residential) real estate. Acquiring undeveloped land is also possible under this exemption, provided the buyer can demonstrate a concrete and timely intention to construct a commercial property, typically within two to three years. Empty commercial premises can also be problematic, as they may not be clearly classified as "commercial" without active use or a clear plan.

The Public Market Play: Listed Real Estate Companies

A pivotal development in 2005 opened another major gateway for foreign capital: the exemption for acquiring shares in Swiss-listed real estate companies. This allows any foreign investor, anywhere in the world, to gain exposure to the Swiss property market — including the restricted residential sector — simply by purchasing stock on the SIX Swiss Exchange. This method offers high liquidity, portfolio diversification, and completely bypasses the need for cantonal authorization.

The major players in this space include Swiss Prime Site, the largest listed real estate company in Switzerland, along with PSP Swiss Property, Allreal Holding, Mobimo Holding, Intershop, and Zug Estates. Their portfolios span thousands of residential and commercial properties across the country. For an investor who wants Swiss real estate exposure without the legal headaches of direct ownership, buying shares in these companies is the simplest path available.

However, this loophole is currently under significant political threat. In March 2025, the Swiss Federal Council announced proposals to end the public market exemption, which would require foreign investors to obtain authorization before acquiring shares in listed real estate companies. This proposal, driven in part by the SVP's "No Switzerland of 10 million" initiative, would represent a paradigm shift for foreign investment. If implemented, it would close one of the most popular and accessible entry points into the Swiss property market.

The Residency Strategy: Becoming Swiss for a Day

For those with the means and flexibility, the most direct way to bypass the Lex Koller is to become a Swiss resident. The law treats foreign nationals who are legally domiciled in Switzerland on the same footing as Swiss citizens for the purpose of property acquisition. EU and EFTA citizens with a B or C residence permit can purchase any type of real estate without restriction, including primary residences, second homes, and investment properties. Non-EU/EFTA citizens with a C settlement permit enjoy the same freedom.

This strategy is often paired with Switzerland's attractive lump-sum taxation regime, known as the forfait fiscal, available in most cantons. Under this system, wealthy foreign nationals who are not professionally active in Switzerland are taxed based on their annual living expenses rather than their worldwide income and assets. In the canton of Valais, for example, a couple renting an apartment for CHF 5,000 per month might face a taxable base of approximately CHF 150,000 per year — a figure considered highly favorable for high-net-worth individuals compared to wealth tax regimes in countries like France or Italy. This creates a powerful incentive for wealthy foreigners to establish official domicile in Switzerland, thereby unlocking the entire property market while also optimizing their tax position.

Creative Structures and Niche Exceptions

Beyond the main gateways, a landscape of more complex and niche strategies exists for the determined investor. These require specialized legal and financial advice and a deep understanding of cantonal variations.

The Holiday Home Quota System. In 17 Swiss cantons, primarily in tourist regions such as Valais, Graubünden, Bern, Ticino, and Vaud, non-resident foreigners can acquire a holiday home. However, this is subject to strict limitations. Only approximately 1,500 purchase authorizations are issued nationally per year, distributed unevenly among the cantons — Valais receives the largest share at 330, while smaller cantons like Uri, Nidwalden, and Glarus receive just 20 each. Properties are limited to around 200 to 250 square meters of net living space and 1,000 to 1,500 square meters of land. Each family may own only one such property, and a five-year ban on resale applies. Despite these constraints, the quota system remains a viable path for non-residents seeking a personal alpine retreat.

The Andermatt Exemption. A truly unique case in the Swiss property landscape is the resort town of Andermatt. When Egyptian magnate Samih Sawiris first visited the village in 2005, he envisioned a full-town redevelopment that would transform a declining military outpost into a world-class alpine destination. The key to his vision was offering real estate to international buyers, and in 2014, his development company, Andermatt Swiss Alps, obtained a blanket exemption from the Lex Koller — the only large-scale development in Switzerland to achieve this. Today, any foreigner can purchase property in the Andermatt Swiss Alps development without quotas, size limits, or residency requirements. Prices range from CHF 1.35 million for a one-bedroom apartment to CHF 5-6 million for penthouses, and property values have grown at an average annual rate of 7.7 percent over the past decade. The 2022 acquisition of the resort's ski operations by Vail Resorts, which committed CHF 150 million in further investment, has only accelerated Andermatt's rise.

Corporate Structures and SPVs. A more sophisticated approach involves the use of Swiss corporate structures, such as a Special Purpose Vehicle (SPV). In this model, a Swiss company is created to own the real estate assets. Foreign investors then acquire shares in the company rather than the property itself. While the law states that Swiss companies controlled by foreigners are also classified as "persons abroad" and subject to authorization, careful structuring with local Swiss directors, a clear commercial purpose, and a minority foreign shareholding can navigate these requirements, particularly for larger mixed-use or commercial projects. This structure is frequently used for club deals and crowd-investing platforms like CapiWell, which allow multiple investors to pool capital into a single property through an SPV.

Indirect Financial Instruments. Foreign investors can also gain exposure through various indirect routes that do not trigger the Lex Koller. Swiss real estate investment funds that hold commercial properties are entirely unrestricted for foreign investors. Real estate debt instruments, such as mezzanine financing or convertible loans provided to Swiss developers, offer returns tied to property performance without constituting "acquisition" under the law. The merger of Credit Suisse into UBS and the resulting Basel III capital requirements have created new opportunities in this space, as traditional bank lending has tightened. Emerging real estate crowdfunding and tokenization platforms also offer fractional ownership opportunities, though direct co-ownership models, such as those offered by Geneva-based Foxstone, typically still require a Swiss residence permit.

The Future of the Lex Koller

The playbook for foreign investment in Swiss real estate is a dynamic one, shaped by decades of political debate and legal evolution. While the door is not as wide open as in other European countries, it is far from closed. A clear understanding of the rules governing commercial property, listed company shares, residency permits, and the various niche exceptions reveals a surprising number of access points for those willing to do the work.

However, the landscape is perpetually shifting. In September 2024, parliamentarian Thomas Aeschi submitted a motion to reverse the relaxations introduced over the past 40 years, proposing that non-EU nationals be fully subject to Lex Koller restrictions even if they reside in Switzerland, and that EU citizens be required to sell their property if they leave the country. Separately, Jacqueline Badran has pushed to extend the Lex Koller to cover strategic energy infrastructure. The March 2025 Federal Council proposals to tighten rules on listed real estate companies, commercial property leasing, and primary residence retention represent the most significant potential overhaul in a generation.

For now, the Lex Koller remains a formidable but not insurmountable barrier — a testament to Switzerland's unique balancing act between preservation and pragmatism. The strategies that work today may not work tomorrow, and the penalties for getting it wrong are severe: transactions can be voided, and criminal sanctions are possible. Successfully navigating this landscape requires not just capital, but expertise, creativity, and a keen eye on the political horizon.