For the German version, please read here. >>
Facts
Maya Kapoor, age 34, is an Indian citizen and self-employed software developer. She runs a sole proprietorship based in Bangalore, developing web apps for international clients including two German start-ups and one US-based company. As a child-free, location-independent professional, she has lived as a digital nomad for two years, working in Thailand, Georgia, Dubai, and Portugal.
In 2025, Maya decides to work in Switzerland for several months. She enters in March 2025 on a Schengen tourist visa (valid for 90 days within 180 days), rents a furnished unit in a co-living space in Zurich, and plans to work remotely for about 70 days before traveling to France. She believes her stay is legal, as she does not intend to be employed by a Swiss firm nor serve clients in Switzerland. She maintains her residence, health, and social insurance in India and consciously avoids registering with local or migration authorities, assuming she's only "privately" staying and working in Switzerland.
In May 2025, during a routine check in several co-living spaces, the cantonal migration office interviews Maya. She openly states she is self-employed and working remotely for foreign clients. As a result, she receives a ruling that she violated the Federal Act on Foreign Nationals and Integration (AIG). She is accused of conducting a permit-required activity without the proper authorization. She is also informed of a potential tax liability in Switzerland, and the AHV compensation office is notified.
Legal Questions
- Was Maya's stay in Switzerland legal under foreign national law?
- Did Maya engage in an activity requiring a permit under the AIG, even though she worked for foreign clients?
- Is Maya liable for taxes in Switzerland despite having no Swiss clients and only a temporary stay?
- Is Maya subject to Swiss AHV/IV/EO contributions?
Legal Opinion
1. Foreign National Law
Under Art. 5 AIG, third-country nationals may only stay in Switzerland without a residence permit if within the visa-free period (typically 90 days per half-year).
But duration alone is not decisive—if employment is performed, a permit may be required under Art. 11 ff. AIG.
A Schengen visa for tourism does not allow employment, including self-employment, even if it's solely online for foreign clients. Swiss practice (BAG, SEM) considers self-employment with profit motive as economic activity, regardless of where clients are located.
Conclusion: Maya's stay was not legal. She engaged in a permit-requiring activity without a permit, violating Art. 115(1)(b) AIG. This can lead to expulsion or an entry ban.
2. Employment and Permit Requirement
Art. 11(1) AIG states that all gainful employment (dependent or independent) requires a permit. Maya's work qualifies as self-employment, carried out at her own risk with customer acquisition and financial independence.
Because her work is physically carried out in Switzerland, she is subject to AIG and should have applied for a permit before starting (usually an L permit for self-employment under Art. 19 VZAE).
Conclusion: Maya carried out a permit-requiring activity without permission—therefore her activity was unlawful.
3. Tax Liability
Under Art. 3(1) DBG, individuals are liable to tax in Switzerland if they reside or stay there. Since Maya stays under 183 days and has no permanent establishment in Switzerland, she remains fully tax-resident in India (Art. 14 DTA India).
4. Social Security
Under Art. 1a AHVG, anyone working in Switzerland is generally subject to AHV contributions. However, since Switzerland and India have a social security agreement, Maya remains subject to social security in India while self-employed in Switzerland (Art. 5 of the agreement).
Conclusion
Maya Kapoor unlawfully engaged in self-employment from within Switzerland without a permit. She should have applied for residence and work authorization in advance. However, her stay did not create a Swiss tax or social security obligation. She continues to owe tax and contributions in India. The actions taken by authorities—including expulsion and reporting—are legally valid and justified.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
