Globalisation has fundamentally reshaped the world of business. For high-net-worth entrepreneurs, this means not only new markets, but also growing complexity in tax and legal structuring issues. While many businesses already use international holding structures, personal factors – in particular nationality, place of residence and tax residency – are increasingly becoming central to strategic planning.
A second nationality can open up additional mobility, create structural flexibility and have material implications for wealth planning, exit taxation and succession planning. These effects are especially pronounced in the relationship between Germany and Switzerland, as both legal systems follow different tax logics, exit rules and approaches to taxing wealth.
The often-observed “from Berlin to Zurich” move illustrates this dynamic in a particularly clear way and stands as a proxy for strategic decisions made in the tension between nationality, tax allocation and entrepreneurial structuring. At the same time, arranging a second nationality is attracting increasing regulatory attention, which makes legal planning even more important.
The following therefore sets out, step by step, which considerations high net worth individuals should address in the context of a German–Swiss dual set-up, which legal and tax risks exist, and what a holistic structure can look like.
The legal treatment of dual citizenship in Europe is not uniform and is evolving. Germany has traditionally taken a restrictive approach to multiple nationalities, but has gradually liberalised it in recent years. For German nationals, acquiring an additional citizenship can still have legal consequences, in particular where no retention permit has been obtained or specific scenarios apply.
Switzerland, by contrast, has long taken an open approach and expressly recognises multiple citizenship. Naturalisation procedures – both ordinary and facilitated – generally allow Swiss citizenship to be acquired without having to renounce existing nationalities. This creates a legal framework for internationally active entrepreneurs that permits greater flexibility in personal and structural planning.
Beyond the German–Swiss relationship, other migration- and investment-based residence models exist in Europe, for example in Portugal, Malta and Cyprus. These programmes differ considerably in terms of access, time to naturalisation and tax treatment. While some models combine residence rights with long-term routes to citizenship, citizenship-by-investment programmes are increasingly under regulatory and EU-law scrutiny. For HNWIs, this requires a nuanced view of the interactions between residence status, nationality and tax structuring.
The tax differences between Germany and Switzerland are apparent already at the level of corporate taxation. In Germany, corporations face a combined burden from corporation tax, solidarity surcharge and trade tax, which depending on location typically sits at around 30%. In Switzerland, the burden varies significantly by canton, but often falls within a range of roughly 12% to 18%.
There are also structural differences in the taxation of individuals. German income tax is strongly progressive and reaches a top rate of 45% plus the solidarity surcharge. In Switzerland, the overall burden is made up of federal, cantonal and municipal taxes, meaning that effective top rates can vary depending on where you live.
The taxation of dividends also differs systematically. While Germany generally applies a flat withholding tax regime to private investment income, Switzerland uses a partial taxation system for qualifying shareholdings. In addition, a withholding tax is levied, which can be reduced or refunded in the international context via double taxation agreements.
German inheritance and gift tax is governed by federal law and can result in substantial charges. In Switzerland, the cantons have jurisdiction, and a significant number of them do not levy inheritance tax for direct descendants.
Finally, wealth taxation is particularly important for comparison. While Germany currently does not levy a wealth tax, it is an established element of Swiss cantonal tax systems and influences long-term structuring decisions.
Overall, Switzerland often offers lower corporate tax rates and greater cantonal room for manoeuvre, whereas Germany is characterised by other tax mechanisms.
The first step is to analyse the personal starting position. For German entrepreneurs, this includes in particular their existing nationality, their tax residency and the requirements for naturalisation in Switzerland while retaining German nationality. It must also be clarified whether permanent residence status – the settlement permit (C permit) – is already in place or first needs to be obtained.
Building on this, the naturalisation route is planned. Key factors are, above all, length of residence, cantonal and municipal specifics, and entrepreneurial location considerations. Due to Switzerland’s federal structure, procedures and requirements differ depending on where you live.
Next, the application documents are prepared. Required documents include, in particular, civil status records, proof of income and assets, a current criminal record extract, and evidence of residence and economic activity. Language skills must also be evidenced. At federal level, the requirement is regularly oral A2 and written A1, although cantonal deviations are possible.
Proof of integration is also central. In addition to long-term residence, the authorities primarily assess social, economic and linguistic integration; for entrepreneurs, stable financial circumstances and domestic activities play a key role.
Once preparation is complete, the multi-stage naturalisation process is initiated at federal, cantonal and municipal level. Duration and costs vary, but typically extend over several years and amount to several thousand Swiss francs.
The German–Swiss double taxation agreement governs the allocation of taxing rights and reduces economic double taxation on income, dividends, interest and royalties. For entrepreneurs, structuring scope arises in particular through combining tax residency with an international corporate structure.
One common model provides for the operating activity to remain in Germany, while shareholdings are consolidated in a Swiss holding company. Subject to meeting substance and transfer pricing requirements, management or licence fees within the group can help shift part of the profits into a lower-taxed environment, with the effective tax burden in some cantons potentially well below the German level.
Dividend flows also benefit from DTA relief mechanisms. For individuals who are tax resident in Switzerland, private capital gains are generally tax-free, which can make a significant difference compared with German taxation, particularly on business disposals.
In the area of wealth succession, further structuring options arise. Many cantons apply low or no inheritance taxes for direct descendants, making choice of residence and structuring decisive. International wealth structures, for example involving Liechtenstein structures, can be combined with Swiss residency in this context.
Dual nationality is less of an immediate tax factor here; rather, it primarily creates legal flexibility for residence decisions, succession planning and long-term wealth structuring.
Incorrect nationality-law planning, especially where naturalisation is pursued without checking the requirements for retaining the existing nationality.
Risk that intra-group remuneration or holding structures are challenged by tax authorities in transfer pricing or anti-abuse reviews, particularly where substance is insufficient.
Political and regulatory changes can affect long-term planning, for example to the DTA between Germany and Switzerland or within national tax regimes.
Residence and integration requirements are not met during the naturalisation process, causing the procedure to be delayed or to fail.
High initial and ongoing costs for structuring, advice, compliance and administration.
Countermeasures include early legal and tax structuring, coordination with specialist advisers, robust transfer pricing documentation, ongoing monitoring of regulatory developments, and clear planning of residence and stay arrangements.
For wealthy entrepreneurs in Europe, dual nationality – particularly between Germany and Switzerland – is not a symbolic step, but a strategic tool. However, its added value does not arise in isolation from obtaining an additional citizenship, but from combining tax residency, holding structure, wealth planning and long-term compliance.
A prerequisite for successful implementation is interdisciplinary structuring. Tax advisers, immigration law specialists and international finance experts should be involved early to align nationality, tax and company-law aspects. A well-founded cost–benefit analysis is essential, as not every corporate structure benefits equally from an international holding architecture.
Tax optimisation is also not a one-off exercise, but an ongoing process. Changes to the double taxation agreement, to national tax regimes or to political conditions require regular review and adjustment of the chosen structure. Robust documentation, substance requirements and transparent transfer pricing design form the basis for long-term legal certainty.
Those who take these factors into account can achieve not only tax efficiency through a German–Swiss structure, but also strategic flexibility and intergenerational preservation of wealth.
