When Boris Becker starts looking for accommodation in the Swiss tax haven Zug, he may be in for a surprise. Houses for sale have become a rarity in the Swiss canton, even if one is rich, famous and a former international tennis star. The district Zug, which lies between Zurich and Lucerne, has become a popular place to live, not just among wealthy Swiss from neighboring cantons.

Milder tax climate

Due to its extremely low tax rates, the district has attracted many wealthy Germans in addition to former Wimbledon champion Becker. Tour de France runner-up Jan Ulrich, party animal Gunter Sachs and pharmaceutical billionare Curt G. Engelhorn are among those who have abandoned their home country for a milder tax climate in Switzerland.

Günter Netzer, a former German soccer star and popular sports commentator, who already lives in Zurich, has registered his sports company Infront in Zug. And Becker, convicted of tax evasion last year, has announced plans to found a new company in the district together with business partner Hans-Dieter Cleven, one of Zug's 'oldest' German citizens, who, along with billionaire Otto Beisheim of the Metro group, registered in the canton more than twenty years ago.

Complaints over tax evaders

But not all Swiss are happy with the steady flow of German tax evaders, which according to the German-Swiss Chamber of Commerce, saw an apparent increase after the last German general election in September 2002.

Attempts by Formula One driver Michael Schumacher to set up camp in Lucerne were thwarted when locals discovered that the canton had offered the Schumachers special tax rates, exclusive landing rights for their private jet and support in finding an appropriate piece of land. "The extra attention given to a foreign billionaire by our authorities is scandalous," Swiss Social Democrat Odilo Abgottspon said. Following further complaints from locals and a row of protests from environmentalists, the Schumacher's eventually gave up their plans.

A similar fate awaited Uwe Holy, former owner and CEO of fashion house Boss. Holy was confronted with local protests after donating 360,000 Swiss francs ($274,000) to the local branch of the World Wildlife Fund, which allegedly helped to smother any complaints from the conservationists against the building of Holy's large residence on Lake Constance.

A further case involving Metro patriarch Otto Beisheim led to a dispute between Zug's local government and the district's tax office, after revelations came out that the office had been working too closely with Beisheim.

Low rates, high costs

Tax rates in Zug are almost half of those in Germany. Due to the thousands of letterbox companies, Zug is one of the richest cantons in Switzerland.

However, experts warn that moving abroad to a tax haven like Zug is only worth doing for the very wealthy. Tax rates may be low, but the cost of living, including rent and health care costs, is around 40 percent higher in the area than in other western industrial states.

That's may be why, as the German-Swiss Chamber of Commerce reported, the number of Germans moving to Switzerland has fallen in recent months.