Lex Koller — officially the Federal Act on the Acquisition of Real Estate by Persons Abroad (BewG) — is Switzerland’s primary restriction on foreign ownership of Swiss real estate. In force since 1983, it prevents most non-residents from buying Swiss residential property. The law is blunt, the exceptions are narrow, and violations can result in retroactive annulment of the purchase — even years after completion.
If you are a foreign national considering Swiss property, your Lex Koller status is the first question to answer. Get it wrong, and the transaction can be unwound.
What Lex Koller Actually Does
Lex Koller prohibits “persons abroad” (Personen im Ausland) from acquiring Swiss residential real estate without prior cantonal authorisation. “Persons abroad” includes:
- Foreign nationals not residing in Switzerland
- Foreign nationals residing in Switzerland on an L permit (short-term)
- Swiss companies more than 50% owned by non-resident foreigners (BewG Article 5 — the look-through rule)
- Foreign-controlled Swiss legal entities regardless of corporate structure
The law applies to residential property. Commercial and industrial property acquired for genuine business use is exempt.
Who Is Exempt from Lex Koller
Swiss citizens: No restriction whatsoever.
C permit holders (any nationality): Equivalent to Swiss citizens for property purposes. Unrestricted purchase.
EU/EFTA nationals with B permit: Can purchase one primary residence in their permit canton without authorisation.
Non-EU/EFTA nationals with B permit: Can purchase primary residence in their permit canton — but the exemption is narrower than for EU/EFTA nationals. Legal advice before proceeding is recommended.
Anyone — commercial property: Lex Koller does not apply to commercial or industrial property acquired for genuine business purposes, regardless of buyer nationality or residence status.
Case Study: The Corporate Wrapper That Made Things Worse
A Middle Eastern investor wanted to purchase a lakeside residential property in canton Schwyz. He was not resident in Switzerland and did not hold a Swiss permit. His adviser suggested forming a Swiss AG and purchasing the property through the company.
The problem: BewG Article 5 looks through corporate structures to the beneficial owner. The AG, majority-owned by a non-resident foreigner, was treated as a “person abroad” — subject to exactly the same Lex Koller restrictions as the investor personally. The corporate wrapper provided no advantage for residential property.
What made it worse: The AG structure created additional compliance exposure. The commercial register now showed a company holding residential real estate, which triggered scrutiny from the cantonal Bewilligungsbehörde. The investor faced not just a rejected purchase, but questions about whether the AG itself had been established with the intention of circumventing Lex Koller — a factor that could affect future applications.
The resolution: The investor abandoned the residential purchase and instead acquired a commercial property through the AG for his Swiss business operations — which Lex Koller explicitly permits. He then began the process of obtaining a B permit, which would eventually allow him to purchase a primary residence in his canton of registration.
The lesson: Corporate wrappers do not bypass Lex Koller for residential property. They can make the situation worse by adding compliance layers and raising red flags with cantonal authorities. The route to residential property ownership for non-resident foreigners runs through the immigration process — obtain a permit first.
Four Traps That Catch Foreign Property Buyers
1. Retroactive annulment. A Lex Koller violation does not merely result in a fine. The purchase is void under civil law — the land register entry is deleted, and the property must be divested. This can happen years after the purchase, if the violation is discovered during a subsequent transaction, audit, or ownership dispute. The buyer loses the property and may not recover the full purchase price.
2. The EU/non-EU B permit gap. EU/EFTA nationals on a B permit have a clearer right to purchase their primary residence than non-EU nationals on the same permit type. Non-EU B permit holders sometimes proceed on the assumption that the exemption is identical — it is not. Legal advice before signing any purchase agreement is essential.
3. Holiday apartment quotas are effectively exhausted. The federal annual quota of approximately 1’500 holiday apartment authorisations nationally is consumed rapidly in popular destinations (Verbier, Gstaad, St. Moritz). Buyers targeting alpine property through this route should expect significant waiting times and restricted geographic selection.
4. “Commercial” land converted to residential use. Purchasing land designated for commercial use and later converting it to residential is subject to enforcement action. The intended use must be genuine and documented — cantonal authorities monitor changes.
Holiday Apartments: The Quota Exception
The one narrow exception for non-resident foreigners to purchase residential-type property:
- Must be in a designated tourist commune with available cantonal allocation
- Subject to the federal quota (historically ~1’500 units per year nationally)
- Must be maintained as holiday use — not rented year-round as a primary residence
- Minimum property size restrictions apply
In practice, this route is not reliably accessible for most non-resident buyers.
Lex Koller and Your Permit Type
| Permit | Primary Residence | Second Home / Investment | Commercial Property |
|---|---|---|---|
| Swiss citizen | Unrestricted | Unrestricted | Unrestricted |
| C permit (any nationality) | Unrestricted | Restricted (authorisation needed) | Unrestricted |
| B permit (any nationality) | Own canton only | Restricted | Unrestricted |
| L permit | Restricted | Restricted | Unrestricted |
| No permit (non-resident) | Restricted | Restricted (holiday quota) | Unrestricted |
For a full overview of Swiss immigration categories, see immigrate to Switzerland.
The Commercial Property Escape Route
The most viable and consistently available route for foreign buyers is commercial and industrial real estate. BewG Article 7(1)(b) explicitly exempts property acquired for genuine commercial use:
- Office premises for an operating Swiss business
- Industrial, warehouse, or logistics facilities
- Retail and hospitality premises operated as a business
A non-resident foreigner or foreign-owned Swiss company can acquire commercial property without triggering Lex Koller. The key qualifier is genuine business use. For a detailed treatment, see our guide on commercial real estate in Switzerland and company formation.
Enforcement and Penalties
Unauthorised acquisition: The transaction is void (null and void). The property must be divested. The land register entry is deleted.
Criminal penalties: Wilful breach carries criminal penalties including fines and potentially imprisonment.
Monitoring: Cantonal land registry offices verify Lex Koller compliance at transfer. Notaries must confirm compliance before authenticating deeds.
Retroactive enforcement: Violations discovered after completion — during resale, inheritance, or audit — can result in forced divestiture years later. The property is not “safe” simply because the initial purchase was completed without objection.
Frequently Asked Questions
Can my Swiss company buy residential property for me?
Not if you are a non-resident foreign national with majority control. BewG Article 5 looks through the corporate structure. The company is treated as a “person abroad” and needs cantonal authorisation — which is very rarely granted for residential purchases.
If I get a Swiss B permit, what can I buy?
One primary residence in the canton where your permit is issued. No investment properties, no second homes, no properties outside your canton.
What happens if a Lex Koller violation is discovered after purchase?
The transaction is void. The land register entry is deleted, the property must be divested, and criminal penalties apply for wilful violations. This can happen years after the original purchase.
Can I inherit Swiss residential property as a foreign national?
Yes. Inheritance is exempt. But if you later sell and repurchase different Swiss residential property, the new purchase is subject to Lex Koller.
Does Lex Koller apply to commercial real estate?
No. Commercial and industrial property acquired for genuine business use is freely acquirable by foreign persons, regardless of nationality or residence status.
What happens if I marry a Swiss citizen — does Lex Koller still apply?
If you acquire Swiss citizenship through marriage and naturalisation, Lex Koller no longer applies. But simply being married to a Swiss citizen without holding Swiss citizenship does not exempt you.
Does Lex Koller apply to long-term leases?
A long-term lease (Baurecht or similar) giving rights equivalent to ownership may be treated as an acquisition. The Federal Office of Justice (BJ) publishes guidance. Ordinary rental agreements are not affected.
Are there cantons that are more lenient?
The BewG is federal law applied uniformly. The holiday apartment quota allocation varies by canton, but the overall national quota is tightly constrained.
Can I buy a plot of land to build on as a foreigner?
If the intended use is residential, Lex Koller applies. If commercial or industrial, it does not. Purchasing “commercial” land and converting to residential use is subject to enforcement action.
Request a Free Assessment
If you are a foreign national considering property purchase in Switzerland, understanding your Lex Koller position before making offers avoids wasted time and legal costs. Morgan Hartley, Senior Corporate Lawyer & Partner at Lawsupport, reviews your situation and sets out the steps needed — without obligation.
Lawsupport (Morgan Hartley Consulting) Grafenauweg 4, Zug, Switzerland +41 44 51 52 592 [email protected]