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Switzerland

Since 1984, the Statute on the Acquisition of Real Estate by Foreigners in Switzerland, commonly known as the Lex Friedrich, limits the acquisition of real estate by persons domiciled in a foreign country and by foreigners living in Switzerland. The purpose of the statute, set forth in Article 1, is "to prevent foreign control of domestic land". Foreigners were only allowed to acquire land in Switzerland under the conditions set out in the Lex Friedrich.

The Swiss government recently proposed the repeal of the entire statute, arguing that it contributes to the isolation of Switzerland from international business and discriminates against foreign investors, and foreigners in general. However, in a referendum Switzerland voted against the government's proposal, leaving the Lex Friedrich intact. Now, the Swiss Federal Council has instead amended the Lex Friedrich. The revised statute comes into force on October 1 1997.

The most important amendments to the current law regarding corporate bodies are: government authorization is no longer required in respect of companies that operate a trading, manufacturing, or any other commercial business and which intend to use the acquired real estate for their own commercial purposes; approval will still be necessary for companies trading only in real estate; and government authorization is no longer required if the foreign acquirer does not use the acquired real estate directly, but rents it to a third party which intends to use the property for a commercial purpose. Because foreign participation in Swiss companies operating a trading, manufacturing or any other type of business (other than companies trading in real estate) no longer requires government approval, the amendments should, according to the Federal Department of Justice, make Switzerland a more attractive location for foreign investors.

Revisions to the Lex Friedrich in regard to physical persons are: foreigners with a year-round residence permit (Permit B) no longer need government authorization to buy the real estate they occupy; it will be possible for foreigners employed by consulates or international organizations with registered offices in Switzerland, or engaged in diplomatic missions within Switzerland, to buy real estate without government approval; the restriction on the net size of properties requiring government approval of purchase has been dropped; nonetheless the acquisition of real estate for holiday rather than day-to-day purposes remains subject to government authorization.

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