A quarter of the staff employed in Switzerland is made up of foreigners. They are the holders of a work permit and a residence permit. For foreigners who want to invest and operate their own business in Switzerland or managers of foreign companies, especially those firms generating jobs, getting the residence permit and the work permit is not a problem.

In the case of foreign nationals who wish to work for a Swiss employer, it’s the sole responsibility of the latter to apply to the authorities issuing residence and work permits. Approval and issuance of residence and work permits falls into the competence of the cantonal authorities.

Legal issues

The agreement on free movement of people between Switzerland and the European Union came into force on 1 June 2002. Following the EU enlargement in 2004, a Protocol, which entered into force on 1 April 2006, was signed.

After Romania and Bulgaria joined the EU on 1 January 2007, to extend the right of free movement for citizens of the new Member States, Switzerland and the EU have negotiated a Second Protocol to the free movement of persons. Protocol II was signed on 27 May 2008 in Brussels, it was approved by the Federal Council (the Swiss government) and, subsequently validated by the Parliament in Bern on 13 June 2008. Following the referendum of 8 February 2009 Protocol II was approved and entered into force on 1 June 2009.

Protocol II regulates access to employment, study at Swiss schools and take up residence in the territory of the Swiss Confederation for Bulgarian and Romanian citizens.

Practical aspects

Agreements and application protocols governing the gradual introduction of free movement of people between Switzerland and the EU countries establish equal treatment by taking the mandatory transitional periods of 7 to 10 years. In the transitional period, Switzerland released a limited number of residence permits to citizens of EU member states. The number of permits increased from year to year, depending on developments in the labor market. Equal treatment involves no discrimination against European citizens or Swiss citizens regarding work, study and / or residency in Switzerland.

For the EU 15, the unrestricted free movement of persons was possible starting with 2007. For the EU10 Member Agreement applied without restrictions since 2014. For Romania and Bulgaria, EU members since 2007, transitional measures were in place until 2016.

The equal treatment principle means that EU citizens enjoy in Switzerland the following rights:

  • occupational and geographical mobility - the right to change at any time work and/or residence;
  • equal working conditions;
  • coordination of social protection systems;
  • social assistance (discounts on public transport, housing allowances and other forms of support);
  • a system of taxation;
  • the right to gainful employment;
  • mutual recognition of diplomas;
  • family reunification;
  • the right of family members to a job;
  • the right to settle in Switzerland after termination of employment;
  • the right to acquire property under certain conditions.

During the transitional period, workers from EU countries can be hired if employers cannot recruit qualified Swiss workforce. If they want to hire a foreign worker, the employer is obliged to justify with the authorities why a Swiss worker cannot fill a certain job.

Social security

Regarding the social security system, according to the agreement on free movement, each country maintains its own social security system. However, insurance is coordinated so that employees do not lose their social rights acquired from working in another country. Each signatory of the agreement is obliged to respect certain principles, such as EU citizens and Swiss citizens after a certain period of transition, to be treated equally with regard to the social security system or to consider the periods of time worked and the territory of other states.

Recognition of diplomas

Also under this agreement, there is mutual recognition of professional qualifications based on a bilateral agreement concluded later. Professional qualifications from EU countries are recognized in principle, if they meet minimum standards. Recognition is provided for professions that are regulated and recognized by official diplomas. In addition, it is necessary that training made in other countries have the same level.

Self-employed citizens

The acceptance of EU citizens who work as self-employed performing economic activities requires them to prove they have their own resources to maintain themselves. They are granted a temporary residence permit valid for 6-8 months. Thereafter, if they can demonstrate that they are able to carry out the activity, they may obtain a residence permit valid for 5 years. Business bank statements, company registration certificates, social security statements or statements of payment of taxes are considered proof. The self-employed have the right to occupational and geographical mobility and the right to employment and labor, when they decide to give up self-employment.

Cross - boarder services

The agreement on free movement of persons provides for limited liberalization of cross-border service. It applies to suppliers of gainful employment and companies registered in an EU country providing services in Switzerland. Accepted period of service is limited to 90 days. Several services, such as the procurement of road, rail and air services are exempted. Permits for the planned duration of supply, even if it exceeds 90 days, are issued for this type of services. Activities in the fields of recruitment services or financial services don’t fall into this category.

For providing services, an authorization is necessary. Service providers in the Swiss Confederation, irrespective of length of service provision are required to register with local authorities within 8 days of entry into Swiss territory.

The companies registered in any EU country can send third country (non-EU) workers in the Swiss Confederation, if those employees have a long-term work permit in the country where the company in question is registered.

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