Restricted Land Acquisition for Foreigners – What Should Be Taken Into Account?

from hauser@m-win.ch, +41 (52) 269 21 11

Many people know the Approval Act (BewG) under the name Lex Koller. The name goes back to the former Federal Councillor Arnold Koller, who was involved in a revision of the BewG during his term in office. The BewG restricts the acquisition of real estate by people abroad. We will give you an overview.

The purpose of the BewG is to prevent foreign infiltration of domestic land, Art. 1 BewG. In principle, therefore, persons abroad require a permit from the responsible cantonal authority to purchase land, Art. 2 Para. 1 BewG.

However, persons abroad do not only mean certain people who are resident abroad. Persons abroad also include, for example, certain nationals who do not have the right to settle in Switzerland or legal entities that have their statutory and actual headquarters in Switzerland and in which persons abroad hold a controlling position, cf. Art. 5 BewG.

In certain cases, there are exceptions to the authorisation requirement, e.g. for legal heirs within the meaning of Swiss law in the course of inheritance or if the purchaser already has joint or total ownership of the property, cf. Art. 7 BewG.

If a permit is required, there are federal and cantonal grounds for approval. A federal ground for approval can be, for example, a hardship case for the seller in the case of a main, second or holiday home or residential unit in an apartment hotel, see Art. 8 Para. 3 BewG. A cantonal ground for approval can be, for example, the purchase as a holiday home or residential unit in an apartment hotel, see Art. 9 Para. 2 ff. BewG. In the latter case, cantonal quotas and the specified locations must be observed. Cantonal legislation must therefore be observed.

As a founder, you are also confronted with the Lex Koller, or the Lex Koller declaration, if the main purpose of a company is to acquire or sell real estate. This declaration must be submitted to the commercial register. If the commercial register cannot simply rule out the need for a permit, the registration process is paused, and the applicants are referred to the permitting authority (see Lex Koller declaration of the Canton of Zurich).

As soon as people abroad or foreigners and properties come into play, the BewG should always be considered. If this is neglected, the consequences can be quite serious, e.g.:

• Legal transactions remain ineffective without legally binding authorisation, Art. 26 para. 1 BewG.
• There is a risk of criminal consequences, for example, circumventing the licensing requirement is punishable by imprisonment of up to three years or a fine.