Hedge fund Millennium seeks tax deal to boost Geneva presence
Swiss cantons locked in competition to woo high-net-worth individuals
Hedge fund Millennium Management is in discussions with Geneva authorities to strike a tax deal in the canton and expand its office there, amid fierce competition between the Swiss regions to lure high-net-worth individuals.
In Switzerland’s highly federalised system, cantons have considerable autonomy to set their own tax rates and routinely use them to compete for wealthy residents and companies.
Maximum personal income tax rates can hit about 45 per cent in Geneva, compared with 20 per cent in Zug, where Millennium also has an office.
New York-based Millennium is one of the world’s biggest hedge funds, with over $92bn in assets under management, and it employs about 6,900 people. Part of Millennium’s pitch to investment staff and portfolio managers is that they can have significant geographic flexibility.
A successful tax ruling would boost Geneva’s attractiveness for the hedge fund’s employees and aims to cater to traders and potential hires who prefer the French-speaking canton. Although Millennium already has offices in both cities, Zug is currently the larger of the two.
The hedge fund has a substantial presence in financial centres including London, New York and Singapore, and allows staff to work from more than 140 locations around the world.
It opened its Dubai office in 2020 in response to demand from traders, and its presence there has subsequently grown.
However, earlier this year, the FT reported Millennium was exploring ways to settle staff who did not want to return to Dubai in Jersey, with some employees seeking tax-favourable alternatives amid the war in the Middle East.
The rivalry between Swiss cantons was underscored last week by 102-year-old private bank Vontobel, which announced plans to move its headquarters and about 1,500 employees from Zurich to Zug, where it will develop a new campus.
Geneva, which has historically been one of Switzerland’s highest-tax cantons, has been trying to narrow the gap with its lower-tax rivals.
Negotiations with Geneva tax authorities can result in a tax ruling, which allows a binding agreement to be obtained for a company — such as a hedge fund — or individuals, potentially reducing the effective tax burden.
Geneva voters in November 2024 approved a substantial cut in cantonal and municipal personal income taxes, which took effect in 2025. The reform reduced income tax bills by an average of 8.7 per cent, with reductions ranging from 5.3 per cent to 11.4 per cent depending on income.
The Geneva government explicitly presented the reform as a way of improving the canton’s attractiveness relative to its Swiss competitors, although it remains comparatively expensive for the highest earners.
Geneva has previously said relief could be granted to an existing business moving into Geneva from another canton, although there are constraints designed to prevent endless canton shopping and account must be taken of relief already enjoyed elsewhere.
The size of the concession has in other cases been judged partly on jobs created, payroll, investment and the additional personal-income-tax revenue generated by the employees.
Although people familiar with the discussions said housing difficulties in Zug were one of the reasons why Geneva was in demand with traders, its property market is even tighter than in Zug. The residential vacancy rate in Geneva was just 0.34 per cent last year, compared with 0.42 per cent for Zug, federal data show.
Millennium declined to comment. Geneva’s finance department declined to comment on the hedge fund but said people moving to the canton from elsewhere in Switzerland were subject to its ordinary tax rules and received no preferential treatment because of their relocation.