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Old 16.04.2018, 02:50
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Right for spouse to earn foreign income

Hi,
I've been following the boards for a while now but can't find an answer to my specific question. My wife and I are both US citizens, and we're moving to Switzerland where I'm taking a job as at a university as a research scientist. I will presumably get either an L or a B permit, organized through the university, but from what I can tell there is no guarantee which one.

My wife works for a US based company and will be continuing to work for this company while abroad. She's currently a salaried employee but they will switch her to an independent contractor and pay her in USD into a US bank account.

So my question is -- does this present a problem? From my understanding, an L visa would not necessarily give her a right to work, but is this only for a Swiss-based company? Is there any restrictions with either an L or B permit regarding foreign income?

Thanks!
Jason
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Old 16.04.2018, 21:06
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Re: Right for spouse to earn foreign income

Giving this a bump since it was posted around 2 a.m.
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Old 17.04.2018, 07:30
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Re: Right for spouse to earn foreign income

And just to add, I've seen some info about self employment and taxes, but my question is really just "can she work for a foreign company, regardless of my permit?" We can figure out tax implications later.
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Old 17.04.2018, 09:26
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Re: Right for spouse to earn foreign income

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We can figure out tax implications later.
I wouldn't be so naive. You might need to discuss this upfront with the company to have some kind of compensation. She would be domiciled here, thus taxed here. And presumably you are US persons, so also subject to IRS taxation. So be well informed and prepared for the double whammy and what could or could not be offset.

Your situation may be further complicated as I think you said she would not be an employee, but would probably need to be self employed here. I let the permit experts chime in on that aspect.
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Old 17.04.2018, 09:30
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Re: Right for spouse to earn foreign income

Have a look here to start:

https://www.startups.ch/en/blog/foun...gner-business/
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Old 17.04.2018, 11:29
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Re: Right for spouse to earn foreign income

Just quickly, only because she is formally switched to an independent contractor sceme does not necessarily mean that for Swiss social security purposes, she will be looked at as a self employed person. There are many facts to consider such as but not limited to: is she still using a company email address, how many different clients does she work for (if only one, then they might say she is economically dependend on this one client thus not self-employed), who provides her with the office utilities (laptop, mobile phone etc.). This is also something, the foreign "employer" has to consider because if she in fact is considered as employee, the foreign employer is liable for the duly computation of the social security contributions and the tax at source of her income (Quellensteuer) - the Swiss tax authorities usually follow the qualification of the social security authorities and vice versa. Further, if she is considered as an employee her job most likely would consider a permanent establishment of the foreign entity in Switzerland which triggers a limited corporate income tax liability here in Switzerland.
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Old 17.04.2018, 12:53
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Re: Right for spouse to earn foreign income

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And just to add, I've seen some info about self employment and taxes, but my question is really just "can she work for a foreign company, regardless of my permit?" We can figure out tax implications later.
Based on what I've read, she would not qualify as self-employed in Switzerland, because she only has one client (her current employer). In terms of taxes, that's probably not bad - because when you're self-employed under U.S. tax law you get to pay both employer and employee contributions for things like Social Security.

You'll both pay tax here as residents of Switzerland. You'll file taxes and FBAR with Uncle Sam. Whether you owe any tax to Uncle Sam will depend upon deductions and exemptions and whatnot.

Her permit is dependent upon yours. If you get L, she gets L. If you get B, she gets B.

Do you know which canton you'll be moving to? Contact their office of migration and ask how it works.
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Old 17.04.2018, 13:51
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Re: Right for spouse to earn foreign income

You might want to check out if something called ANoBAG is applicable in your case.
Here is a link from Zurich Canton.

https://www.svazurich.ch/anobag

Good Luck
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Old 19.04.2018, 17:19
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Re: Right for spouse to earn foreign income

Thanks for the replies everyone. We've done a bit more searching but still haven't found a satisfactory answer.

I made the above comment about taxes not because we are pushing it off, but because we are already working with a US and a Zurich based tax firm to make sure we don't make any mistakes. But the problem is that they do not deal with permit issues. So they can advise on how best to deal with my wife's work situation from a tax perspective, but they cannot say outright if my permit will allow her to work.

Most of what I can find (including the suggested links) seem to be about if the main permit holder wishes to be self employed. But I still am unable to find anything about if there are any restrictions on the spouse of a permit holder earning overseas income. I'm not even sure this would count as "self employed", so it's not even clear to what regulations apply here.

If anyone has any other thoughts or experience with this it would be much appreciated. Thanks!
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Old 19.04.2018, 18:46
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Re: Right for spouse to earn foreign income

I think it very much depends on the permit you receive as the primary permit-holder. If you receive a B then she can work, but self-employment would need approval from the cantonal authorities.

if you receive L then she's not allowed to work without prior approval and it seems self-employment is not allowed at all (if I am reading correctly).

Here are some relevant bits of posts by Medea that contain links which may help.

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...You need a good business plan and evidence of sufficient funds to keep you going while the business gets established.

https://www.ch.ch/en/self-employment/

https://www.kmu.admin.ch/kmu/en/home...ird-state.html

https://www.startups.ch/en/inform/details/forms/

If you can't meet the requirements then you won't be able to be self-employed.

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...

"Access to the labour market
Regardless of their nationality, persons who come to Switzerland by virtue of family reunification have the right to seek employment anywhere in Switzerland and in the branch of their choice. They may also work in a self-employed capacity."

https://www.sem.admin.ch/content/dam...nnachzug-e.pdf

"Art. 46 Employment of spouses and children

The spouse and children of a Swiss national or of a person with a permanent residence permit or a residence permit (Art. 42-44) may work on a salaried or self-employed basis anywhere in Switzerland."

https://www.admin.ch/opc/en/classifi...232/index.html

Permanent residence permit is C, residence permit is B.

If you want to be self-employed you'll need to present your business plan to the cantonal migration office, along with proof that you have sufficient funds to keep the business running while it gets established. If they're happy you can be self-employed, if they're not you can't.

https://www.kmu.admin.ch/kmu/en/home...efta-area.html

This is the difference between a C permit holder and a B permit holder. The C permit holder doesn't have to get permission to be self-employed, the B permit holder does.
Honestly the best thing you can do is contact the cantonal migration office where you plan to live and ask how it works, what proof is needed, etc. They're the ones that ultimately have to give approval. We can only make suggestions and offer links to help you search more.

Good luck!
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