Commuters, networks and the Lake Constance region

Cross-border commuters

The DACH market is also a labour market. Switzerland employs a large number of cross-border commuters, persons who live in a neighbouring country and return there at least once a week. By September 2024, their number had risen to some 403,000, an increase of nearly nineteen percent over five years. More than half lived in France and about 23 percent in Italy, while Germany accounted for roughly 16 percent.¹ In the first quarter of 2024, about 64,600 residents of Germany worked in Switzerland as cross-border commuters. Most of them lived in Baden-Württemberg, above all in the districts of Lörrach, with some 21,800 commuters mainly to the two Basel cantons, Waldshut, with some 14,700 commuters to Aargau, Zurich and Schaffhausen, and Konstanz, with some 13,600 commuters to Thurgau, Zurich and Schaffhausen. In certain small municipalities on the Upper Rhine, more than a third of the resident population works in Switzerland.²

For the Zurich financial centre, the commuter flows from Germany matter less in numbers than in their composition. The banks, insurers and law firms of Zurich employ German nationals in large numbers, many of whom have moved to Switzerland while others commute from the districts along the Rhine or from the Lake Constance area. The same applies, on a smaller scale, to commuters from Vorarlberg who work in the cantons of St. Gallen and Graubünden or in Liechtenstein. The tax treatment of these commuters under the double taxation agreements is a subject of considerable complexity. The agreement with Germany contains a special regime for cross-border commuters under which Switzerland levies a limited withholding tax while Germany taxes the income subject to a credit, whereas persons who do not return home regularly may lose their commuter status.³ Advisers in Zurich encounter these questions routinely when their clients are employers, employees or companies that second staff across the border.

Networks and associations

Because a market of this kind depends on personal relationships, the DACH area has produced a range of associations in which lawyers, bankers and entrepreneurs meet. The Handelskammer Deutschland-Schweiz in Zurich, mentioned above, is the oldest and largest of the economic bodies. Legal networks exist as well. The Deutsch-Schweizerische Juristen-Vereinigung, founded in 1999, describes itself as a fixed institution in German–Swiss legal and economic relations. It addresses practically relevant legal and tax questions of cross-border business, supports scientific projects and organises regular events and conferences on German–Swiss legal and economic issues.⁴ Similar associations exist for other bilateral relationships, and professional bodies such as the Society of Trust and Estate Practitioners maintain branches in Zurich, Vaduz and the German and Austrian cities, in which practitioners from all DACH jurisdictions meet.

Such networks are rarely the object of scholarly attention, although they perform functions that matter for a financial centre. They transmit knowledge about legal developments in the neighbouring countries before it reaches the textbooks. They also create the trust between practitioners that allows a Zurich lawyer to refer a client to a colleague in Munich or Vienna. They also provide a forum in which the practical effects of legislation, such as a new German reporting obligation or a change in Liechtenstein foundation law, can be discussed with officials and academics. Geneva’s international character produces comparable networks in the French-speaking world and in the orbit of the international organisations. Zurich’s networks are more regional in character, which corresponds to the regional nature of its DACH business.

The Lake Constance region as a regional market

Within the DACH area, the region around Lake Constance forms a market of its own. The eastern Swiss cantons of St. Gallen, Thurgau and Appenzell, the Austrian Land of Vorarlberg, the principality of Liechtenstein and the German districts on the northern shore of the lake together constitute a densely populated industrial region with close economic ties. Cooperation between the governments of the region is institutionalised in the Internationale Bodensee-Konferenz, which brings together the German Länder Baden-Württemberg and Bavaria, the Austrian Land Vorarlberg, six cantons of eastern Switzerland including Zurich, and Liechtenstein, and which publishes statistics on the regional labour market.⁵

In financial terms, the natural centre of this region is St. Gallen. The canton is home to the St. Galler Kantonalbank and to Raiffeisen Switzerland, the country’s cooperative banking group, while its university has trained a large part of the German-speaking business elite. The branch of Hypo Vorarlberg described above operates from St. Gallen, and the Liechtenstein banks draw a significant share of their staff from the canton. At the same time, the region is oriented towards Zurich for the larger transactions, for the services of the big law firms and for the capital market. The railway and motorway connections from St. Gallen, Vaduz and Bregenz to Zurich make the city the natural destination for business that exceeds regional dimensions.

The Lake Constance region illustrates in miniature the relationship between Zurich and the DACH market as a whole. Local institutions serve local clients on both sides of the borders with an intimate knowledge of the regional economy. For complex structures, international portfolios and transactions involving several legal systems, the clients and their advisers turn to Zurich. The principality of Liechtenstein contributes its particular legal instruments and its EEA access, while the Austrian and German parts of the region supply entrepreneurs, clients and staff.

Notes

1. swissinfo.ch, “Über 400’000 Grenzgänger arbeiten nun in der Schweiz”, 2024, https://www.swissinfo.ch/ger/%c3%9cber-400%27000-grenzg%c3%a4nger-arbeiten-nun-in-der-schweiz/88038479, reporting the cross-border commuter statistics of the Federal Statistical Office. ↩
2. Grenzgängerzentrum, “Die wichtigsten Statistiken zu Grenzgängern in der Schweiz”, https://grenzgaengerzentrum.de/ratgeber/allgemein/statistiken-grenzgaenger-schweiz/, citing the figures of the Federal Statistical Office for the first quarter of 2024. ↩
3. Article 15a of the German–Swiss double taxation agreement: BDO Schweiz, “Steuerliche Unterscheidung zwischen Grenzgängern und internationalen Wochenaufenthalterinnen”, 17 November 2023, https://www.bdo.ch/de-ch/publikationen/steuerliche-unterscheidung (Swiss withholding tax of 4.5 per cent of gross remuneration credited against German income tax, loss of commuter status with more than 60 non-return days per calendar year). Chapter K.II treats German residents who move to Switzerland. ↩
4. Deutsch-Schweizerische Juristen-Vereinigung e.V. (DSJV), website, https://dsjv.de/, and the page “Veranstaltungen”, https://dsjv.de/veranstaltungen/. ↩
5. Internationale Bodensee-Konferenz, https://www.bodenseekonferenz.org/ (accessed September 2026), which lists Baden-Württemberg, Bavaria, Vorarlberg, Liechtenstein and the cantons of Schaffhausen, Zurich, Thurgau, St. Gallen, Appenzell Ausserrhoden and Appenzell Innerrhoden as members and names the working group Statistikplattform Bodensee. The founding year 1972 is given in Wikipedia, “Internationale Bodensee-Konferenz” (German edition), https://de.wikipedia.org/wiki/Internationale_Bodensee-Konferenz. ↩

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 September 2025.