Bern against the flood: federal measures against foreign money

Why the Confederation intervened

The Swiss authorities did not regard the inflow of foreign capital as an unmixed blessing. Foreign deposits enlarged the money supply, fuelled inflation and pushed up the external value of the franc, which hurt the export industry and tourism. Foreign purchases of land drove up prices in the tourist regions and in the cities. Sébastien Guex summarizes the period in the Historical Dictionary of Switzerland: between 1955 and 1975 the inflow of foreign funds into Switzerland reached such proportions that several measures were adopted to slow it down.¹ The measures had no specific Italian or Ticinese target. They applied to all foreign money. In Lugano, however, where Italian deposits formed the core of the business, they were felt directly.

The instruments developed in stages. The first were agreements between the Swiss National Bank and the banks, the so-called gentlemen's agreements. In 1962 the National Bank concluded such an agreement with the main banks to brake the inflow of capital from abroad. Under a supplementary agreement to the framework agreement of 1 September 1969, the banks holding more than CHF 20 million of foreign funds undertook to keep interest-free minimum reserves and, from August 1971, to pay no interest on short-term foreign deposits in Swiss francs, a prohibition soon extended to all maturities.² When voluntary restraint proved insufficient, the Confederation adopted federal decrees based on emergency powers, which were later confirmed by popular vote. The real estate rules followed a separate path, beginning with the federal decree of 1961.

The land question: from Lex von Moos to Lex Furgler

The federal decree of 23 March 1961 on the authorization requirement for the acquisition of land by persons abroad, known after the head of the Federal Department of Justice and Police as the Lex von Moos, introduced for the first time a general requirement of authorization for purchases of Swiss land by foreigners. It was limited to five years and repeatedly extended.³ The cantons granted the authorizations, and tourist cantons such as Ticino and Valais applied the rules generously. A popular initiative against land speculation launched by the National Action was rejected on 2 July 1967 by 397,303 votes to 192,991, although it won majorities in some urban centres.⁴

In the currency crisis of 1972 the Federal Council used its new emergency powers to adopt the Lex Celio of 26 June 1972, which restricted the investment of foreign capital in Swiss real estate for reasons of monetary policy. These currency-motivated restrictions were lifted on 31 January 1974. On 1 February 1974 a revised federal decree, the Lex Furgler, took over the land rules with stricter provisions against circumvention and against purchases of holiday homes and apartment hotels.⁵ The decrees were replaced by the Federal Act on the Acquisition of Real Estate by Persons Abroad of 16 December 1983, the Lex Friedrich, which entered into force on 1 January 1985 and has applied since 1997, in amended form, as the Lex Koller.⁶ For Italian clients of Lugano banks the rules meant that a holiday flat on the lake required a cantonal authorization and was subject to quotas, which in turn created a demand for structures that concealed foreign ownership behind Swiss companies and nominees. The Lex Furgler's provisions on circumvention were aimed precisely at such structures.

Notes

1. Guex, "Piazza finanziaria" (as above) ("Tra il 1955 e il 1975 l'afflusso di fondi stranieri in Svizzera assunse proporzioni tali da portare all'adozione di diverse misure volte a rallentarlo"). ↩
2. Swissvotes, vote no. 209 of 28 February 1965, short description, https://swissvotes.ch/vote/209.00/kurzbeschreibung-de.pdf (agreement of the National Bank "mit den wichtigsten Banken" to brake the inflow of capital from abroad); Federal Council, Message of 8 September 1971 on the protection of the currency, BBl 1971 II 837, https://swissvotes.ch/vote/230.00/botschaft-de.pdf ("Zusatzabkommen zum Rahmenvertrag zwischen Nationalbank und Banken vom 1. September 1969"; banks with more than CHF 20 million of foreign funds; interest-free minimum reserves; Verzinsungsverbot for maturities under six months, extended from 23 August 1971). For the wider history see Swiss National Bank (ed.), The Swiss National Bank 1907–2007 (Zurich 2007). ↩
3. law.ch, "Immobilienkauf durch Ausländer (Lex Koller): History", https://law.ch/lawinfo/immobilienkauf-durch-auslaender-lex-koller/history (23 March 1961, "Erster Bundesbeschluss über die Bewilligungspflicht für den Erwerb von Grundstücken", initially limited to five years); Neidhart, "Svendita del territorio" (as above). ↩
4. Neidhart, "Svendita del territorio" (as above). ↩
5. law.ch, "Lex Koller: History" (as above) (Lex Celio of 26 June 1972 as an emergency decree motivated by currency policy; lifted 31 January 1974; Lex Furgler of 1 February 1974 against circumvention and with stricter rules on holiday homes and apartment hotels). ↩
6. law.ch, "Lex Koller: History" (as above) (Federal Act of 16 December 1983, in force 1 January 1985); Neidhart (as above) (Lex Friedrich 1983, Lex Koller 1997). The current act is the Federal Act on the Acquisition of Real Estate by Persons Abroad of 16 December 1983 (BewG), SR 211.412.41, title confirmed at https://www.droit-bilingue.ch/de-fr/2/21/211.412.41-index.html. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.