Real Estate Companies (SI): Taxation and Yield Repatriation for Non-Residents

The stability of the Swiss real estate market attracts many non-resident investors. Whether you are established in neighboring France or elsewhere in the world, the structuring of this investment is frequently done through a Real Estate Company (Société Immobilière or SI), usually in the form of a Public Limited Company (SA).

However, this legal setup requires a careful reading of cross-border tax rules and a financial optimization strategy when paying out yields.

1. How is a Swiss SI taxed?

In Switzerland, a Real Estate Company is subject to taxes on its profit (net rental income) and on its capital, levied at the federal, cantonal, and communal levels. The location of the property defines the main place of taxation.

Tax Liability by Personal Attachment (Registered Office in Switzerland)

An SI set up as a Swiss public limited company (SA/AG) is subject to direct federal tax because its registered office is in Switzerland: this is personal attachment (Art. 50 DFTA, in French). Even if the sole shareholder of the SI resides abroad, the company therefore remains fully taxable in Switzerland. The generated rental income can only be transferred to the shareholder in the form of dividends, once the SI has fulfilled its own corporate tax obligations.

2. What withholding tax applies to dividends, and what do double taxation agreements (DTA) provide?

The distribution of profits is the critical moment for the non-resident investor. The Federal Tax Administration (FTA) levies a withholding tax of 35% (Art. 13 WTA) on dividends paid by the SI.

The Example of European Residents

In accordance with Double Taxation Agreements (such as the Swiss-French DTA), the investor domiciled abroad declares these dividends to their local tax administration. The DTA generally allows for the final tax burden to be limited:

• In the general case (an individual, or a company holding less than 10% of the capital), Switzerland retains a residual tax of 15% (Art. 11(2)(a) of the Swiss-French DTA).
• If the shareholder is a company resident in France holding, directly or indirectly, at least 10% of the SI's capital, the dividends are in principle taxable only in France (Art. 11(2)(b), subject to the anti-abuse clause in the same paragraph): Switzerland then retains nothing.
• In the general case, the balance (20%) may be refunded to the investor upon presentation of specific forms (such as Form 83 for France) duly validated by the foreign tax authorities.

It is strongly recommended to have this setup validated by a certified public accountant or a tax lawyer specialized in cross-border matters to ensure full compliance of the declaration.

3. How can you avoid yield erosion when repatriating funds?

Once dividends or rents have been distributed and taxes settled, the investor faces the challenge of currency transfer. Repatriating Swiss Francs (CHF) to an account in Euros (EUR) or another currency using a traditional bank is the most costly mistake made by investors.

Traditional banks charge high fixed fees, correspondent fees, and above all, apply an opaque exchange rate margin (spread) compared to the real interbank rate.

4. How can you reduce the cost of repatriating your dividends with ibani?

To reduce the cost of converting your Swiss real estate income, ibani provides investors and Real Estate Companies with a dedicated financial infrastructure and a published margin scale that decreases with the amount of each transaction:

• Below 10,000 CHF: Exchange rate margin of 0.40%.
• From 10,000 CHF to 50,000 CHF: Exchange rate margin of 0.35%.
• From 50,000 CHF to 100,000 CHF: Exchange rate margin of 0.30%.
• From 100,000 CHF to 250,000 CHF: Exchange rate margin of 0.20%.
• From 250,000 CHF to 1 million CHF: Exchange rate margin of 0.15%.
• Above 1 million CHF: Tailored pricing.

In practical terms, the SI pays the dividends in CHF to a dedicated Swiss IBAN assigned to you, via a simple, free domestic transfer. Your funds are converted into euros with the margin shown above, then transferred to your European bank account.