Super-Rich Consider Relocation Amid Tax Changes in Switzerland

The recent referendum in Switzerland exposed significant concerns among the super-wealthy regarding potential tax changes. Nearly 80% of Swiss voters rejected a proposal to impose an inheritance tax on the richest citizens, but the discussions surrounding the vote revealed how sensitive the ultra-rich are to tax policies. Norwegian millionaire Kjartan Aas, who currently resides in Switzerland, indicated that many wealthy individuals would reconsider their residence if the tax were implemented. Similarly, fellow millionaire Tord Kolstad expressed that he would have to reassess his situation if the proposal passed.

The prospect of shifting tax laws has a historical precedent, as wealthy individuals often seek jurisdictions with favorable tax treatments. Take John Fredriksen, for example. A prominent figure in the global shipping industry, he left Norway in 1978 for the United Kingdom and later renounced his Norwegian citizenship for a Cypriot one. However, following the UK Labour government’s elimination of the non-dom status, Fredriksen relocated again, this time settling in the United Arab Emirates. He remarked that the increasing taxation in places like the UK and Norway is reminiscent of a decline across the Western world.

Tax Residency and Global Trends

Many countries continue to offer generous allowances for individuals wishing to avoid tax residency. Swiss pharmaceuticals billionaire Willy Michel noted his willingness to leave Switzerland if the inheritance tax were adopted. He stated that he and his wife could still spend 180 days a year in Switzerland while maintaining residences in other countries, such as Spain and Italy.

Another notable figure, Lars Seier Christensen, co-founder of Denmark’s Saxo Bank, enjoys living in Switzerland but can spend a significant amount of time in his home country without triggering tax residency. He has previously mentioned that his time in Denmark is more than sufficient for him.

As many countries face ageing populations and budget deficits, the wealthy often become targets for increased taxation. The end of non-dom status in the UK has already prompted many affluent individuals to seek residence elsewhere. Italy has also announced plans to raise its flat tax on foreign income from €200,000 to €300,000 (approximately $350,000) starting in 2026. This kind of shift can influence the decisions of high-net-worth individuals, as they assess their options for wealth preservation.

Attraction of Low-Tax Jurisdictions

Countries in the Middle East and Asia are actively courting wealthy families through tax incentives and relaxed regulations. Cities like Abu Dhabi, Dubai, Hong Kong, and Singapore are strategically positioning themselves as attractive destinations for the super-rich. One European billionaire mentioned the importance of personal preference in choosing where to live, emphasizing that while he appreciates the appeal of Dubai, he prefers the existing conditions in Europe despite its tax challenges.

The failed Swiss referendum may have momentarily calmed the fears of some billionaires, but it highlighted a crucial reality: for those whose primary motivation for residency is wealth preservation, any shift in tax laws could prompt another move. The case of Kjartan Aas contemplating a return to Sweden, which currently has no inheritance tax, underscores the ongoing volatility in this realm of elite financial decision-making.

Ultimately, the ongoing dialogue among the wealthy regarding potential relocations reveals a fragile equilibrium between maintaining their financial interests and the jurisdictions they choose to call home. As tax policies continue to evolve, the super-rich remain poised to act swiftly to protect their fortunes.