There are many reasons why you may leave Switzerland and move abroad: business or employment opportunities, more affordable retirement, social life, educational opportunities and sheer wanderlust are just some of these.
But relocating comes with its own set of questions that need answering. What will your tax obligations be? Will you still be covered by your Swiss health insurance? Can you continue to save for retirement?
Here, the moneyland.ch team answers 7 of the biggest financial questions related to leaving Switzerland.
1. Can I keep my Swiss bank account?
If you receive part of your income in Switzerland (by renting out your home, for example), keeping your Swiss private account open after your move is very convenient. Additionally, you may have savings which you would prefer to keep in your Swiss savings account rather than transfer to a weak-currency account elsewhere.
Unfortunately, many Swiss banks are no longer keen on providing bank accounts to people living outside of Switzerland. The same holds true for Swiss citizens who move abroad. Depending on your bank, you may have to pay high “non-resident” fees. These extra fees can be as high as 720 francs per year at some banks, with the average non-resident fee being around 300 francs. In the worst case, your bank may decide to end their relationship with you, meaning you will have to find another bank to work with.
Some banks will not terminate your accounts, but will limit the services you can access. PostFinance, for example, does not provide credit cards to customers who do not live in Switzerland.
However, there are some Swiss banks that provide a level playing field for customers residing both in Switzerland and abroad. For example, BancaStato does not charge non-resident fees. Swissquote does not charge Swiss customers living abroad a foreign resident fee in most cases. Crédit Agricole Financements Suisse delivers banking services at no additional fee to residents of some countries. PostFinance does not charge non-resident fees for savings accounts, but does charge these for private accounts.
In every case, you should apply for the account which you plan to hold while you are still resident in Switzerland, as your chances of being accepted by a Swiss bank after leaving are very poor.
2. Can I continue to make Swiss social security contributions?
Unless you are already retired, very wealthy or fiercely independent, you might want to continue contributing to your Swiss social security old age and survivors' insurance scheme (OASI) in order to receive your full government pension when you retire. Additionally, you may want to continue receiving disability insurance (DI) through the social security scheme after you leave Switzerland.
Fortunately, you will be able to continue making OASI/DI contributions after you relocate as long as the country you are moving to is not a member of the European Union (EU) or the European Free Trade Association (EFTA).
In order to be eligible to voluntarily participate in the scheme, you will need to either be a Swiss citizen or the citizen of an EU or EFTA country. You will need to have been registered with the Swiss social security scheme for at least 5 years without interruption before you leave Switzerland in order to be eligible to make voluntary contributions after leaving the country.
The amount of social security contributions you are required to make after registering for voluntary contributions is set annually (9.8% of your income in 2019). You also pay an administrative fee equal to 5% of contributions.
During times when you are unemployed, your contribution will be based on your wealth and the pension you hope to receive. Contribution minimums and maximums are set annually (minimum 922 francs per year or maximum 23,050 francs per year in 2019).
Another option is to make up for gaps in contributions after you return to Switzerland (if you do). However, this can only be done if you remain insured in Switzerland for the length of your stay abroad. Only gaps in contributions which occurred within five years prior to your return to Switzerland are eligible for retrospective contributions.
Keeping your social security coverage is a good idea if you move to a country which does not provide a secure social security scheme, or if the local scheme is difficult to access as a foreigner. Swiss social security benefits and pension payments are also much more generous than those of many other countries.
However, you should note that in many countries, contributing to the local social security scheme is compulsory. Your voluntary Swiss social security contributions have to be paid in addition to any local social security contributions. It’s also worth knowing that 5% per annum penalty interest charge applies to contributions which are not paid on time.
Take time to consider the taxes and social security contributions you will have to pay in your new country of residence to determine whether or not you can afford to continue participating in the Swiss OASI/DI scheme.
3. What will happen to my Swiss retirement savings?
Your pillar 2 occupational pension fund savings or vested benefits (if you are self-employed or unemployed) can be cashed out when you leave Switzerland, provided the country you move to is not a member of the EU or EFTA. In this case, a withholding tax is levied on your assets by your canton of residence. This withholding tax can be reclaimed in full or in part when the assets are taxed by your new country of residence, if the country has a double-taxation treaty with Switzerland.
If you move to an EU or EFTA member country, your compulsory occupational pension fund contributions must be transferred to a Swiss vested benefits foundation. The foundation will hold your pillar 2 assets in escrow until you reach retirement age. Voluntary pension fund contributions you which have made above the compulsory contributions – such as additional contributions paid to fill gaps when your salary increases – can be cashed out even if you move to an EU or EFTA member country. The compulsory portion of your 2a assets can be withdrawn under certain circumstances (for the purpose of buying a primary residence, for example), even after you have left Switzerland.
You can choose which vested benefits foundation you want to use. In additional to vested benefits savings accounts, you can also invest these assets in a vested benefits retirement fund or take out vested benefits whole life insurance. Vested benefits can also be divided between a maximum of two different vested benefits solutions. Note: Most Swiss banks do not charge non-resident fees for vested benefits accounts.
Important: Your vested benefits are taxed when they are cashed out. If you cash them out while you are still a tax resident in Switzerland, they will be taxed by your canton of residence. If you only cash out vested benefits after leaving Switzerland (when you move to an EU or EFTA country, for example), your vested benefits are taxed by the canton in which the vested benefits foundation is located. For this reason, entrusting your assets to a vested benefits foundation located in a low-tax canton can save you money when it comes time to cash out your assets.
Pillar 3a private retirement savings can be cashed out when you leave Switzerland, regardless of which country you move to.
As with vested benefits, pillar 3a assets are taxed by your canton of residence if you withdraw them while still a Swiss tax resident. If you only cash out your pillar 3a assets after taking up residence outside of Switzerland, the assets are taxed by the canton in which the bank or insurance company which manages your 3a retirement account, 3a retirement fund or 3a whole life insurance policy. Transferring your pillar 3a assets to a service provider in a low-tax canton and only cashing them out once you have moved your tax residence can save you money. Swiss banks generally do not charge non-resident fees for 3a retirement accounts.
Pillar 3b retirement funds and whole life insurance policies can normally be maintained after you leave Switzerland. Some Swiss banks and insurers give you the option of migrating from pillar 2 and pillar 3a funds or policies to 3b solutions when you leave Switzerland.
4. Can I keep my Swiss health insurance?
Once you settle in another country, you will no longer be eligible for basic compulsory Swiss health insurance coverage. However, there are exceptions to this rule.
For example, you can keep your mandatory Swiss health insurance policy for up to 6 years if you work for a Swiss company or a Swiss government agency while abroad.
You can also keep your obligatory coverage after you leave Switzerland until you actually settle in another country. Technically speaking, settling involves living in the same country for at least 120 days. If you plan to travel between countries rather than settle in one country, you can keep your health insurance coverage until you settle in a country or return to Switzerland.
However, compulsory Swiss health insurance only covers medical emergencies outside of Switzerland, but does not cover routine checkups and healthcare. You can find detailed information on this subject in the guide to compulsory health insurance coverage outside of Switzerland.
Many Swiss health insurance companies offer private “international” health insurance and supplemental health insurance coverage for people living outside of Switzerland. Insurers which provide international health insurance coverage include Visana, SWICA and KPT, among others.
Unfortunately, the coverage which you get these offers is generally limited to an annual sum insured, which isn’t the case with basic obligatory Swiss health insurance. However, international policies may include a lot of benefits which you would normally only get from supplementary outpatient insurance or hospital insurance in Switzerland.
Because international insurance is private and non-compulsory, health insurance providers are not obligated to accept you as a customer.
5. Am I liable to pay Swiss taxes after I leave?
From the time you deregister in Switzerland, you are no longer a tax resident. This applies to Swiss citizens as well.
However, certain taxes continue to apply after you leave Switzerland. Primarily, you will be eligible to pay possible taxes on property in Switzerland owned by you. If you rent out your home in Switzerland, profits earned on rental income may also be taxable in Switzerland. Property sales may also be subject to Swiss taxes. Property taxes and tax laws vary between cantons and municipalities, so the location of your property will determine the taxes due.
6. Do I have to cancel insurance policies myself?
The onus rests on you to cancel your insurance policies. This applies to compulsory insurances like health insurance and liability car insurance as well as to voluntary insurances like supplementary health insurance, collision or comprehensive car insurance, personal liability insurance and household insurance.
Aside from insurance policies, take time to terminate any pending contracts (mobile plans, car sharing, broadband Internet, TV plans, newspaper subscriptions, food delivery, etc.) well ahead of your departure date. In Switzerland, many service providers will automatically extend your contract at the end of its term if you do not terminate it by the due date, and they will continue to bill you accordingly.
Just upping and going without taking time to terminate your contracts can leave you liable for payments in arrears and can even damage your credit history. This could make your life difficult if you ever return to Switzerland (many emigres do) or even in your new country of residence.
7. Can I continue to receive social security (OASI/DI) pensions after I leave?
Disability insurance (DI). If you receive a disability pension from social security, whether or not you can continue to receive your pension after you move will depend on several factors:
Swiss citizens with a disability level of 40%-49% can continue to receive their disability pension if they move to a country within the EU or EFTA. If you move to a country outside of the EU or EFTA, you will no longer receive your pension.
As the citizen of an EU country receiving a disability pension in Switzerland, you will be able to continue receiving your pension if you move to an EU country. If you are a citizen of an EFTA country, you will be eligible to keep receiving your pension if you move to an EFTA country. Citizens of all other countries will not continue to receive a disability pension after leaving Switzerland.
If your disability level is 50%-100%, you can continue to receive your disability pension no matter which country you move to, as long as you are a Swiss citizen, or an eligible citizen of an EU member country or an EFTA member country (Exception: Icelandic citizens only keep their pension if they move to an EFTA country). Israeli citizens can continue to receive their pension if they move to Israel. If you are a citizen of any other country, you will not be able to continue receiving Swiss disability benefits after you leave Switzerland.
Retirement pension (OASI). As a pensioner receiving a social security old age and survivors' insurance (OASI) pension, you can continue to receive your pension when you leave Switzerland as long as you are a Swiss citizen, an eligible citizen of an EU state, an EFTA member state, or another country with which Switzerland has a social security agreement. Countries with which Switzerland has social security agreements include EU and EFTA member countries plus Australia, Canada, Chile, Croatia, Philippines, Japan, Macedonia, United States, India, Uruguay and San Marino (different regulations may apply to each agreement).
If you receive supplemental benefits towards disability aids or services, you will no longer receive these after leaving Switzerland. Your surviving spouse is still entitled to a survivor’s pension even if they are not a Swiss citizen, nor a citizen of a country which has a social security agreement with Switzerland.
If you are a citizen of a country with which Switzerland does not have a social security agreement, you will not be able to continue receiving a pension fund after you leave Switzerland. However, you may be able to get the contributions you made, less what you have already received, refunded.
As an Israeli citizen you can also continue to receive your Swiss pension, but only if you move to Israel and continue to reside there.
More information:
Health insurance for Swiss living abroad explained
International health insurance explained
Banking fees for non-residents compared
Pillar 3a account comparison
Vested benefits account comparison
Swiss retirement fund comparison
