Key Takeaways
- Switzerland’s lump-sum tax is a fixed CHF 250,000–1,000,000+ a year, set by canton, and bars Swiss gainful activity.
- Andorra taxes actual income at a maximum of 10% (effective rate usually below 8%) and allows a business.
- Below ~CHF 800k–1.2M of income, even ordinary tax in a low Swiss canton beats the forfait — and Andorra beats that.
- Switzerland has a cantonal wealth tax; Andorra has none.
- Switzerland wins on location, banking and prestige; Andorra on cost and the 0% wealth/inheritance treatment.
Switzerland’s lump-sum tax (forfait fiscal) charges wealthy foreigners a fixed amount — in practice CHF 250,000 to over CHF 1,000,000 a year depending on the canton — regardless of actual income, and you cannot work in Switzerland. Andorra taxes your actual income at a maximum of 10%, lets you run a business, and asks for a one-off €50,000 plus €1,000,000 invested (which you keep). Switzerland wins on prestige and location; Andorra is far cheaper for most people.
How each system works
| Andorra | Switzerland (lump-sum) | |
|---|---|---|
| Basis of tax | Actual income, capped at 10% | A fixed “deemed” amount, unrelated to real income |
| Typical annual tax | Effective rate usually below 8% | CHF 250,000–1,000,000+, set by canton |
| Federal / cantonal minimum | — | Federal deemed base CHF 435,000 for 2026; higher in Vaud, Geneva |
| Can you work locally? | Yes (active residency) | No — the forfait is only for people with no Swiss gainful activity |
| Wealth tax | 0% | Yes — cantonal wealth tax applies |
| Inheritance tax | 0% | Cantonal; 0% for direct descendants in many cantons, not all |
| Entry cost | €50,000 non-refundable + €1,000,000 invested (retained) | No fixed entry payment, but you must rent or buy suitable property |
| Availability | Nationwide | ~19 of 26 cantons; abolished in Zurich, Basel, Schaffhausen and others |
The cost comparison
The Swiss forfait is attractive precisely when your real income is very high — you pay a fixed sum and shelter the rest. Below roughly CHF 800,000–1,200,000 of worldwide income, even ordinary taxation in a low-tax Swiss canton (Zug, Nidwalden, Obwalden) is usually cheaper than the forfait — and Andorra’s 10% ceiling is cheaper still.
Put concretely: someone with €500,000 of income pays roughly €47,000 in Andorra. The same person on a Swiss forfait might pay CHF 300,000–500,000. Andorra only loses the comparison for people whose income runs into the many millions and who value what Switzerland offers beyond tax.
What Switzerland offers that Andorra doesn’t
- Location and connectivity — Zurich and Geneva are major international hubs; Andorra has no airport.
- Prestige and banking depth — the Swiss private-banking ecosystem is unmatched.
- Schengen and central Europe on the doorstep.
- Scale — cities, culture, an established international elite.
What Andorra offers that Switzerland doesn’t
- You can run a business — the forfait forbids Swiss gainful activity; Andorra’s active residency is built around it.
- 0% wealth and inheritance tax, nationwide and predictable.
- A far lower cost of living and lower entry cost for anyone not in the ultra-high-income bracket.
- Transparency of the deal — you know your rate is 10%, not a negotiated cantonal figure.
Who should choose which
Choose Switzerland if your income is very large, you will not work locally, and you want the location, banking and prestige — and you can absorb a six- or seven-figure annual bill. Choose Andorra if you are a business owner or an investor with strong but not stratospheric income, you want to keep working, and you value the 0% wealth and inheritance treatment and a far lower cost of living.
Frequently asked questions
Is Andorra or Switzerland cheaper for tax?
Andorra for almost everyone below the ultra-high-income level — its 10% ceiling beats the Swiss forfait’s fixed CHF 250,000–1,000,000+. Switzerland only wins on cost at very high incomes, and then mainly for the non-tax advantages.
Can I work under the Swiss lump-sum regime?
No. The forfait is only available to foreigners with no gainful activity in Switzerland. Andorra’s active residency is designed for people who work.
Does Switzerland have a wealth tax and Andorra doesn’t?
Correct. Swiss cantons levy a wealth tax; Andorra has none.
Is the Swiss forfait available everywhere?
No — it operates in about 19 of 26 cantons and has been abolished in Zurich, Basel-Stadt, Basel-Landschaft, Schaffhausen and Appenzell Ausserrhoden.
Last reviewed: 3 September 2026. General information, not legal or tax advice; Swiss cantonal rules and the forfait vary and change. Confirm figures with advisers in the relevant jurisdiction. Speak to our team.
