Visa and work permit regulations for investors in Switzerland

In this column, the authors would like to elaborate on the visa and work permit rules of Switzerland that are applicable to Chinese business people and their family members (spouses and children) in the context of investing in Switzerland.

Business visitors

For the purpose of establishing a commercial presence – i.e. office, branch or subsidiary – qualified Chinese business visitors are entitled to a business visa for Switzerland valid for three months based on the General Agreement on Trade in Services (GATS), to which both China and Switzerland are signatories, and on the Sino-Swiss Free Trade Agreement (FTA) after its entry into effect (expected in mid-2014).

Eligible for this type of visa are only executives or senior managers of a company seeking to establish a commercial presence in Switzerland – persons who primarily direct the enterprise or one of its departments and who receive only general supervision or direction from high-level executives, the board of directors or the stockholders of the enterprise.

They have to be an employee of the respective enterprise for a period of not less than one year immediately preceding their application for admission, and are not allowed to perform tasks related to the actual supply of services of the enterprise during their stay in Switzerland.

Expatriates

After establishing a Swiss office, branch or subsidiary, the Chinese perent company usually wants to send a senior manager, an executive or a specialist over to Switzerland in order to ensure control, efficiency and the smooth integration of the Swiss business into the group. In GATS or FTA terminology, such expats are called inter-corporate transferees (ICTs).

As a signatory of GATS, and later as a party to the FTA, Chinese ICTs enjoy preferential treatment compared to non-GATS and non-EU/European Free Trade Association nationals. In so far as the ICT qualifies as “senior manager”, “executive” or “specialist” according to GATS or FTA definitions, and his or her wage and work conditions are in conformity with the Swiss industrial and professional standards, an ordinary resident and work permit – a so-called B-permit will as a rule be issued quite swiftly.

B-permits

Under GATS, B-permits may be issued for three years, extendable to four years, and under the FTA they will even be extendable to five years.

For the purposes of GATS as well as the FTA, “intra-corporate transferee” means essential persons transferred to Switzerland within a specific Chinese business or company and defined under (A) and (B) below; who are employees of that business or company (enterprise) supplying services in Switzerland through a branch, subsidiary or affiliate established in Switzerland; and who have been beforehand employees of their enterprise located in China for a period of not less than one year immediately preceding their application for admission.

1. Executives and senior managers: persons who primarily direct the enterprise, or one of its departments, and who receive only general supervision or direction from high- level executives, the board of directors or the stockholders of the enterprise. Executives and senior managers would not directly perform tasks related to the actual supply of services of the enterprise.
2. Specialists: highly qualified persons who, within an enterprise, are essential for the supply of a specific service by reason of their knowledge at an advanced level of expertise in the field of services, research, equipment, techniques or management of the enterprise.

If a B-permit cannot be obtained, a short-term permit may be obtainable (the so called L-permit). As a rule, L-permits are issued for a period of up to one year and may be extended for a maximum 12 more months. L-permits generally tend to be issued to foreign employees with fixed-term employment contracts of up to one year.

Short-term expats

The Chinese parent company may sometimes want to send qualified personnel over to Switzerland for a short assignment. In such cases, and if the duration and purpose of the short stay is defined from the beginning, an L-permit limited to four months may be issued, irrespective of any quota. After the expiration of a four-month L-permit, the person has to leave the country for two months before they may be given another four-month L-permit.

The total amount of personnel working on the basis of this type of permit may not exceed one-quarter of the applicant’s total workforce in Switzerland.

Individual investors

Until now, we have been talking about a Chinese enterprise investing in Switzerland. In practice, many investments are made in the name of an entrepreneur as a natural person. What if the investor wants to build up and manage his or her Swiss business him or herself in Switzerland?

The investor will have to sign an employment agreement with his or her Swiss company and the company will then apply for the appropriate work permit for him or her. The investor will enjoy similar treatment as an expat, and whether and for how long he or she can get the desired permit depends essentially on to what extent local jobs are created or maintained.

Family reunion

Close relatives such as spouses and under-age children may be allowed to join a B-permit or L-permit holder in Switzerland. The permit granted to accompanying family members is limited to the duration of the primary B-permit.

Schengen visa

B or L-permit holders do not require a separate visa to enter Switzerland as their permits also serve as a Schengen visa, allowing them to freely travel within the Schengen area of EU member countries for up to 90 days within a period of 180 days.

Urs Haegi is a senior partner and head of VISCHER’s immigration law practice group, and Wu Fan is a counsel on VISCHER’s China Desk