Lex Koller (BewG) governs real-estate acquisition by persons abroad — and also affects Swiss companies under foreign control. A practical guide for founders.
Lex Koller (Federal Act on the Acquisition of Real Estate by Persons Abroad, BewG, SR 211.412.41) is one of the oldest and sharpest Swiss investment-filter laws. For founders of a Swiss company with foreign participation, Lex Koller becomes a key question — not only at the first real-estate purchase but already at the choice of company structure.
Note: Supplements Founding a company as a foreigner, Founding a GmbH, Founding an AG.
Who counts as 'person abroad'
Lex Koller has a broad definition (Art. 5 BewG):
- Natural persons without Swiss residence — regardless of nationality
- Foreign nationals with Swiss residence but without Permit C — i.e. B permits, L permits, Status S
- Legal entities with seat abroad
- Legal entities with seat in Switzerland, but foreign-controlled (see next section)
Important: EU/EFTA citizens with Permit B are exempt — they are treated as Swiss for Lex Koller (Bilateral Agreement I, Annex I FZA).
When a Swiss GmbH/AG is 'foreign-controlled'
A Swiss legal entity is foreign-controlled when (Art. 6 BewG, OR conditions):
- More than one-third of share capital held by persons abroad
- More than one-third of voting rights in foreign hands
- Substantial loans by foreign persons establishing financial control
- Other circumstances indicating actual control
This threshold is low — even a Swiss GmbH with e.g. 35% foreign holdings is Lex Koller-relevant when acquiring real estate.
Permit-free transactions — what you can do without permit
Certain forms of acquisition are permit-free (Art. 2 para. 2 BewG), even for foreign-controlled companies:
Business premises privilege (lit. a)
Business real estate serving the own operating premises is permit-free. Example: foreign-controlled GmbH buys office building for its branch in Zurich — no permit needed.
Conditions:
- Actual use as business premises (not letting to third parties)
- Acquired by the legal entity itself (not via subsidiary letting to parent)
- Proportionate to business activity
If you partly sublet the office building, the permit-freedom may be lost — from ~30% third-party use it becomes critical.
Lease relationships
Pure renting (also long-term) is not ownership — generally permit-free. Swiss branch of foreign company can rent offices, production halls, employee flats without limit.
Inheritance and family access
Acquisition through inheritance, statutory inheritance share or gift between relatives in direct line is permit-free (Art. 7 BewG).
Permit-required transactions
Residential real estate for persons abroad
Generally prohibited (Art. 8 BewG). Exceptions:
- Main residence for B-EU/EFTA holders (no permit needed)
- Main residence for persons without C permit by case-permit
- Holiday flats in approved tourism areas — cantonally quota-restricted
Yield objects / capital investments
Acquisition of apartment buildings, commercial real estate for letting, building land for speculation — permit-required and usually refused.
Permit procedure
If a permit is required:
- Application at the competent cantonal authority
- Review of conditions — predominant public interest, proportionality, cantonal quotas
- Appeal right to cantonal administrative court and up to Federal Supreme Court
- Processing time: 3–12 months
Practice cases
Case 1: Pure consulting GmbH (foreign-controlled, no real estate):
- Lex Koller declaration: "No real-estate acquisition intended"
- HR application without further Lex Koller steps
- No problems
Case 2: GmbH with own office building (foreign-controlled):
- Lex Koller declaration: "Own business premises under Art. 2 para. 2 lit. a BewG"
- HR application possible, office acquisition permit-free
- Important: re-check Lex Koller compliance upon later subletting
Case 3: Real-estate investment GmbH (foreign-controlled, wants to buy apartment buildings):
- Lex Koller declaration: not permissible in this form
- HR application possible, but every individual real-estate purchase is permit-required
- In practice almost always refused
- Recommendation: structure via Swiss control (>2/3 Swiss) or other investment vehicle
Sanctions upon violation
Criminally (Art. 28 BewG): prison up to 3 years or monetary penalty for intentional violations. Co-responsible (notaries, fiduciaries, board) can also become criminally liable.
Civilly (Art. 26 BewG): the transaction is void. Cantonal authority can demand restoration — forced sale of property with public auction. Proceeds less procedure costs go to the foreign person but can be far below original purchase price.
When legal advice is useful
- Structure decision before formation (Swiss-majority vs. foreign-controlled, holding constructions)
- Planned real-estate purchase by an existing or new company — Lex Koller compliance check
- Change of shareholder majority in existing company with real estate — Lex Koller re-check can trigger
- Complex holding structures with foreign parent and Swiss subsidiaries
- Inheritance cases: foreign heirs of a Swiss real-estate company
Related topics
Official sources
Frequently asked questions
What is Lex Koller?
Federal Act on the Acquisition of Real Estate by Persons Abroad (BewG, SR 211.412.41), colloquially named after Federal Councillor Arnold Koller. It makes the acquisition of Swiss real estate by persons abroad subject to authorisation — and prohibits certain acquisitions outright.
Who counts as a 'person abroad'?
Natural persons without Swiss residence, foreigners without C permit in Switzerland, and foreign-controlled legal entities (including Swiss GmbH/AG when foreign control exists — Art. 5 BewG).
When is a Swiss GmbH/AG 'foreign-controlled'?
When persons abroad hold more than one-third of the share capital OR more than one-third of the voting rights OR exercise financial control through substantial loans (Art. 6 BewG).
Do I need a Lex Koller permit for a company without real-estate business?
No. Lex Koller applies only when the company acquires or holds real estate. A consulting GmbH, IT company or trading AG without real-estate involvement remains entirely outside the permit procedure. Still, the Lex Koller declaration is part of the HR application.
What is the 'business premises privilege'?
Business real estate serving a legal entity's own operations is permit-free (Art. 2 para. 2 lit. a BewG) — even with foreign control. Example: foreign-controlled GmbH buys an office building for its Swiss branch. Condition: actual use as business premises, not letting to third parties.
When is a Lex Koller permit practically impossible?
For residential real estate for persons abroad without Swiss residence — residential purposes are generally prohibited (Art. 8 BewG) except for holiday flats in approved tourism areas (cantonally quota-restricted). For pure yield objects (apartment buildings as capital investment), permits are very rare.
What are the consequences of a Lex Koller violation?
Criminal liability under Art. 28 BewG with prison up to 3 years or monetary penalty. The transaction is void (Art. 26 BewG). The cantonal authority can demand restoration of the lawful state — forced sale of the property with auction.