Switzerland is nowadays a very popular immigration country. Interestingly, it has not always been like this. Throughout the last few decades Switzerland has become increasingly attractive for all sorts of immigrants who seek an “exile” from high taxation, or from the proliferation of bureaucracy or for those who simply want a higher quality of living.

How poor Switzerland became an immigration country

But how could the formerly poor mountain country suddenly become so attractive? It is mainly because Switzerland has a very regional, decentralized, individualist and competitive spirit. And it tends to stay out of international conflicts. While many other countries have a more or less uniform system of rules, laws and taxes, Switzerland has strong regional competition. What most people from outside do not understand at first is that Switzerland really is a confederation of cantons, meaning in many aspects every canton and sometimes every municipality gets to do what they want. This in turn leads to a competition in many aspects of life and work and it supports the spirit of individualism. Not so much tax payers money can be wasted in Switzerland, because it is easy for people to move to the next village or canton if one region is not careful with their budget.

The Swiss often do not feel the need of uniformity and centralized rules. This leads to a natural and quite efficient regulation of public spending and a lower amount of bureaucracy that is hard to match for other countries.

So if you want to take things into your own hands, Switzerland may be a very good choice for you. If however you want a lot of support from the government, Switzerland is not your first choice because that is not how the confederation works.

Land of the free

The German and Italian speaking parts of Switzerland in particular have a history of being an “exile” for people who wanted to break free from their former countries’ systems. The canton of Ticino, in the southeast of Switzerland and bordering Italy, is a good example of this. When Napoleon conquered large parts of Switzerland he gave the people of Ticino a choice: Do you want to be Italians or Swiss? And the people answered with a proud: we want to be “Swiss and free”. Until today, this is very important to the Italian-speaking Swiss, so better do not confuse them with Italians.

But of course, Switzerland has not only been a home for religious and fiscal refugees for people from neighboring countries. It has a long tradition of granting asylum to free thinkers and activists for liberty, democracy and free speech from all over the world both due to its high level of democratic sophistication and neutrality in most foreign policy matters.

So it is no wonder that Switzerland is a host to many international organizations for human rights and that Facebook founder Mark Zuckerberg wants to have the headquarters of the crypto currency Libra in Switzerland, just like so many other cryptocurrency businesses.

Tax responsibility in practice

The tax system in Switzerland might seem a bit more complex at first, but it saves you a lot of money: you pay taxes on three levels to the confederation, the canton and the municipality. Accordingly, you pay a different percentage in each municipality. The differences are very high between different parts of Switzerland. In the French speaking west, people have a more socialist attitude so the taxes are higher. In the east, people have a more libertarian attitude on average, so taxes are lower.

Everywhere in Switzerland, you pay your income tax at the beginning of next year. Different than many other countries like Germany, France or the US, the income tax is not automatically withheld by your employer. Instead, everybody pays their taxes after the tax year, like an entrepreneur would in other countries. There is only one exception: as an immigrant and non-entrepreneur, the income tax is withheld by your employer like in Germany or France for the first five years after immigration. This makes it easier for people who only stay in Switzerland for a short time frame.