Lex Koller: Switzerland's Foreign Real Estate Acquisition Restrictions Explained
Lex Koller is the informal name for Switzerland’s federal law restricting the purchase of real estate by persons domiciled abroad or, in specific circumstances, by foreign nationals. The law has shaped Switzerland’s property market for decades, and it has particular relevance for Canton of Zug — home to Crypto Valley and a large concentration of international entrepreneurs who find themselves navigating its provisions.
Origin and Official Name
The official title is the Federal Act on Acquisition of Real Estate by Persons Abroad — in German, the Bundesgesetz über den Erwerb von Grundstücken durch Personen im Ausland, commonly abbreviated as BewG (Bewilligungsgesetz). It is known colloquially as “Lex Koller” in reference to Federal Councillor Arnold Koller, who served as Federal Justice Minister during a period when the act received significant attention and enforcement emphasis in the 1990s.
The law has roots extending further back — the original Federal Act was enacted in 1983, building on earlier cantonal and federal restrictions that had operated since the 1960s. Switzerland’s concern about foreign domination of domestic real estate, and the perception that property should serve as housing for residents rather than purely as an investment asset for non-resident capital, has been a persistent feature of Swiss property law across political cycles.
Purpose: What Lex Koller Is Designed to Prevent
The stated purposes of Lex Koller are to prevent foreign domination (Überfremdung) of Swiss real estate and to protect Swiss housing from being absorbed into a purely speculative international investment market. In practical terms, this means limiting the ability of foreign nationals and non-resident foreign investors to acquire Swiss residential property as financial assets or vacation homes.
Switzerland’s property market — particularly in desirable locations including Zug, Zurich, Geneva, and Alpine resort areas — is attractive to international capital precisely because of its stability, safety, and long-term value preservation characteristics. Without restriction, demand from international buyers could, in theory, drive up residential property prices to levels that exclude Swiss residents. Lex Koller is the instrument through which the Swiss Confederation moderates this risk.
Who Lex Koller Applies To
The law distinguishes between several categories of buyer:
Swiss citizens: Not subject to Lex Koller regardless of where they reside.
EU/EFTA nationals with Swiss residence permit (B or C permit): EU and EFTA nationals legally resident in Switzerland may purchase residential property freely — subject to the same rules as Swiss citizens. This reflects Switzerland’s bilateral agreements with the EU, which include freedom of movement provisions.
EU/EFTA nationals without Swiss residence: EU and EFTA nationals who are not resident in Switzerland may purchase property only for their personal use (primary residence if they establish Swiss residence, or with authorisation for vacation properties in designated areas).
Non-EU/EFTA nationals with a permanent residence permit (C permit): Foreign nationals holding a Swiss C permit (permanent residence authorisation, available generally after five or ten years of residence depending on nationality) may purchase residential property freely — the same rights as Swiss citizens and EU/EFTA residents.
Non-EU/EFTA nationals without a C permit: This is the category most affected by Lex Koller restrictions. Non-EU/EFTA nationals — including citizens of the United States, United Kingdom (post-Brexit), Canada, Australia, India, China, and most of the world — who are not holding a C permit must obtain cantonal authorisation to purchase residential property. In practice, authorisations for standard residential purchases are generally not granted. These individuals can rent residential property freely but are effectively excluded from the residential ownership market without a C permit.
What Requires Authorisation
Residential property: The core restriction is on the purchase of residential property (apartments, houses) by persons requiring authorisation. This includes primary residences that an authorisation-required foreigner wishes to occupy.
Vacation homes in tourist areas: Switzerland has a separate, strict regime for vacation homes in designated tourist areas (broadly, mountain and lake resort destinations). Cantonal quotas severely limit the number of vacation homes that can be sold to foreign buyers annually. This part of Lex Koller is particularly restrictive and interacts with the separate Lex Weber (federal initiative limiting vacation homes to 20% of total housing in any municipality, enacted 2012).
Indirect acquisition: Lex Koller also applies to indirect acquisition of real estate — for instance, purchasing shares in a Swiss company where the primary asset is Swiss residential property. The law attempts to close structures that would otherwise allow foreign buyers to circumvent direct restrictions.
Key Exceptions: Commercial Property
The most practically significant exception is commercial real estate. Lex Koller does not restrict the purchase of commercial property — offices, warehouses, industrial buildings, retail premises, and other non-residential uses — by foreign nationals. A US-citizen blockchain entrepreneur subject to Lex Koller restrictions on residential purchase is entirely free to purchase an office building in Zug city or anywhere else in Switzerland.
This exception is economically rational: the concern driving Lex Koller is about housing markets and resident affordability, not commercial property. It also has significant implications for Canton of Zug’s Crypto Valley, where blockchain foundations and companies have purchased or developed commercial premises without restriction.
Application to Crypto Valley: The Non-EU International Entrepreneur
Canton of Zug’s blockchain and cryptocurrency ecosystem is dominated by international founders, investors, and protocol teams from the United States, United Kingdom, Asia, and other non-EU/EFTA jurisdictions. A founder of an Ethereum-ecosystem company who relocated to Zug from San Francisco in 2019, for example, would need to wait until approximately 2024-2029 to acquire a C permit — depending on nationality — before being able to purchase residential property without Lex Koller restriction.
This structural reality has several market effects:
Deferred ownership demand: The international Crypto Valley cohort that would logically be buyers in the CHF 3-10 million residential market is largely renting during the years before C permit eligibility. This concentrates significant purchasing power in the rental market while deferring ownership demand.
Rental market pressure: As described elsewhere in our market coverage, Zug’s rental vacancy is extremely low. The non-EU crypto community’s concentration in the rental market contributes to this dynamic.
Commercial property activity: Blockchain foundations and companies — legal entities rather than individuals — typically have no Lex Koller restriction issues for commercial premises. Office purchases by crypto entities in Zug have proceeded without the individual restrictions faced by their founders personally for residential property.
C permit pipeline: Each year that passes sees more of Zug’s established international community accumulate the residence history needed for C permits. As this cohort gains permit eligibility, previously excluded buyers enter the residential ownership market — a structural demand driver with a multi-year lag built in.
Annual Quotas for Vacation Homes
The vacation home authorisation system operates through annual cantonal quotas. Each canton receives an allocation of authorisations for foreign vacation home purchases per year. These quotas are set federally and are generally modest. For Canton of Zug — not primarily a vacation home market in the classic Alpine sense — this is less practically relevant than for cantons like Valais, Graubünden, or Bern with large ski resort areas.
Nonetheless, any foreign buyer considering a property in Zug that could be characterised as a vacation home (rather than a primary residence) should seek specific legal advice on quota availability and authorisation procedure.
Authorisation Process
Where an authorisation is sought (which, for standard residential purchases by non-resident foreigners, is generally not a viable pathway), the application is made to the cantonal authority responsible for Lex Koller matters — in Zug, the cantonal directorate for public construction and planning. The cantonal authority reviews whether any of the statutory grounds for authorisation apply.
SECO monitoring: The State Secretariat for Economic Affairs (SECO) oversees national implementation of Lex Koller and monitors cantonal application. SECO can challenge cantonal authorisation decisions at the federal administrative level, providing a degree of national consistency in enforcement.
2024 Reform Discussion
Swiss parliamentary and policy debate has periodically revisited Lex Koller. The Swiss Federal Council and parliament have debated proposals to restrict commercial property further (bringing more categories under Lex Koller) as well as proposals to ease restrictions — particularly for technology entrepreneurs and qualified investors who contribute to the Swiss economy.
Within Crypto Valley, there has been informal advocacy for residence-linked exemptions or streamlined procedures for established technology entrepreneurs — arguments that Switzerland’s competitiveness as a blockchain hub is constrained by restrictions that prevent successful founders from acquiring residential property. As of early 2026, no statutory amendment to Lex Koller specifically addressing these concerns had been enacted, though the debate reflects the genuine tension between the law’s protective purpose and the economic case for attracting and retaining international talent.
This article provides a general informational overview of Lex Koller. Swiss property law and its application to specific situations is complex and subject to change. This content does not constitute legal advice. Consult a qualified Swiss lawyer for advice applicable to your circumstances. See our Disclaimer.
Author: Donovan Vanderbilt | The Vanderbilt Portfolio AG, Zurich
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