Living and working in Switzerland

Many international jobs are located abroad, outside Switzerland. It is not fundamentally a problem to be employed abroad and work from Switzerland.

If an employee works at least 25% in Switzerland and is employed 100% abroad, the employer must pay all social security contributions in Switzerland for the employee but is not responsible for income tax. This is a good deal for employers as they do not have to pay social security contributions in an EU country where employer contributions are much higher.

Many employers are afraid of the PE risk (permanent establishment). This is indeed often a risk under Article 5 of many double taxation agreements if the employee has a management function. The employer must not allow the employee to make managerial decisions in the home office. We can request from Swiss tax authorities a confirmation that there is no permanent establishment. Another option is to hire a third-party provider such as Zug Consultants GmbH in Switzerland, which specialises in hiring managers, which represents a high risk for establishing a PE.

We are happy to advise you on the assessment of risks for international workforce. IHRS is specialised in international laws and regulations.