Campione: Unique Tax Haven

Campione is an Italian enclave in Switzerland and is entirely surrounded by Switzerland. Since there are no border controls, there is complete freedom to pass in and out of the district. Campione is located in the Swiss Canton Ticino on the lakeside of Lake Lugano, about 10 minutes from Lugano and 45 highway minutes from Milan. It is included in the European network of transportation by the Lugano railway station, a stop for international trains, and by the Milan airport. Campione offers a magnificent view of Lugano, the mountains behind, and wide parts of the lake. Its situation on sloping ground toward the lake makes this view unrestricted from most points.

Campione belongs economically to Switzerland, using Swiss banks, currency, duty, traffic, post, telephone, and telegraph. (Its Swiss postal code is CH-6911.) The telephone system is a part of the fully automatic Swiss system, in this respect an advance on the Italian system. Cars registered in Campione get the license numbers of the Swiss Canton Ticino (TI) and show the Swiss national sign (CH).

In contrast with the Swiss national territory, there is no problem for foreigners in obtaining residence rights in Campione if they can prove to have a house or apartment. It would even be sufficient to prove having rented an apartment or house, but in practice there is virtually no property available for rent. Registration procedures for residence are uncomplicated and speedy. On the other hand, it is no longer possible to have letter-box residences only. The local authorities attach great importance to the fact that registered residents live at least some time in Campione, and they control whether or not apartments or houses are furnished.

From Campione one has a clear and unrestricted operation space in all of Switzerland and Liechtenstein. Campione's interest as a tax haven arises from the fact that although its tax law is made within the framework of Italian tax law, there are special regulations for Campione. No personal income tax or communal taxes are levied—all Campione's income is derived from the municipal casino.

Since, according to the Swiss-Italian treaty, banks cannot be established in Campione it is necessary to use Swiss banks, preferably in Lugano. Thus Campione is a part of the Swiss currency area like Liechtenstein and all payments and investments are made in Swiss francs. The residents of Campione fully enjoy the advantage of the Swiss bank-secrecy provisions and Lugano is a well-developed banking center with international connections.

Campione residents—in contrast with foreigners in Switzerland—are not subject to Switzerland's double tax agreements with the United States, Germany, Sweden, and other countries. There are possibilities for every kind of business, and by using combinations of Swiss, Liechtenstein, and Italian companies, taxes can be minimized or sometimes eliminated. The personal tax exemption in Campione only applies, however, on the condition that the resident does not do business directly with Italy. (But business with Italy could be done through the medium of Swiss or Liechtenstein companies.)

In Campione a limited company (SRL—Societa a Responsabilita Limitata) can be established, the minimum capital being 600,000 lira, corresponding to about U.S. $900. The natural advantages of the SRL are the company's limited liability and the anonymity of the partners. The disadvantage is that orderly bookkeeping with a presentable balance is obligatory. This regulation does not apply to personal firms, but here, like elsewhere, owners are personally liable for all of the proprietorship's liabilities.

Formation charges depend upon the amount of the firm's capital, the minimum running around 3,000 Swiss francs. The establishment formalities take more time than for a Swiss corporation, but a firm should be able to operate after a couple of months. A company in Campione, in contrast with a Swiss company, can be entirely owned and directed by foreigners.

If no personnel are employed, taxes can be reduced to nearly zero—or at least to an irrelevant percentage—as long as the company in Campione is not doing business directly with Italy. The tax rate is, without consideration of profits, 3,000 Swiss francs per worker or employee yearly.

In Campione the Common Market regulations apply to business and independent professions. Profits from money, shares, bonds, real estate, and other transactions on a Swiss or international basis are not registered for tax purposes for Campione residents as long as they are passing through Swiss banks.

While this is not true of other parts of Ticino, foreigners can buy real estate in Campione without any restrictions. This applies to individuals and to companies. The purchase contract is usually concluded through a Swiss notary in Lugano, and the registration of the deal is made in Como, Italy, through an Italian lawyer. Demand for real estate in Campione has pushed prices well above the level in the Canton Ticino.

The language of Campione is Italian, but schooling of non-Italian speakers presents no problem. There is an excellent European school in Varese, Italy, which is not far from Campione. Many English-speaking schools exist in Switzerland.

The surrounding area offers excellent sports possibilities. Of course there are all kinds of water sports—sailing, motor boating, rowing, swimming, etc. Golfers have four golf links not far from Campione. A sports center is under construction in Campione with a tennis club, five tennis courts, a swimming pool, and a general sports court. The ski resorts of St. Moritz, Andermatt, and San Bernardino are all within easy reach of Campione.

Milan, of course, is an important center for expositions, music, opera (the famous "Scala"), and theater, but there are expositions and international festivals in Lugano and Locarno too.

All in all, Campione is one of the world's most unique, and least-known, tax havens.

Adam Starchild is an international business consultant specializing in publishing, banking, and tax havens. He is the author of "Tax Havens: What They Are and How They Work," and has interests in a number of companies.