There are many reasons why Swiss citizens and long-term residents move abroad: business or employment opportunities, more affordable retirement, higher living standards, 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 fee sitting at 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 will 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.
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 government pension scheme (AHV/AVS) in order to receive your full government pension when you retire. Additionally, you may want to continue receiving invalidity (IV/AI) and survivors insurance coverage through the social security scheme after you leave Switzerland.
Fortunately, you will be able to continue making AHV/IV contributions after you relocate as long as the country you are moving to is not a member of the European Union (EU) or European Free Trade Association (EFTA).
In order to be eligible for these voluntary social security contributions, 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 are set annually (9.8% of your income in 2017). You also pay an administrative fee equal to 5% of the full payment.
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 914 francs per year or maximum 22,850 francs per year in 2017).
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, for as long as you are registered for voluntary Swiss social security contributions, a 5% annual interest charge will apply if you do not make your contribution 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 maintain your Swiss social security benefits.
3. What will happen to my Swiss retirement savings?
Your assets held in a pillar 3a (private) retirement savings account or pension fund (second pillar) are yours and can be withdrawn when you relocate from Switzerland, no matter which country you move to. However, a tax will be levied on assets before they are paid out.
If you choose not to cash out your Swiss retirement savings, you can normally choose to maintain your Swiss 3a account and withdraw retirement savings when you reach legal retirement age. Swiss banks generally do not charge non-resident fees for 3a retirement accounts.
The funds which you and your employer have contributed to pillar 2 (occupational) retirement funds can be withdrawn after you register at the Swiss embassy in your new country of residence, provided the country you move to is not a member of the EU or EFTA.
They can also be place in a Swiss vested benefits account (this is required if you move to an EU or EFTA member country) and withdrawn when you reach legal retirement age. Swiss banks do not normally charge non-resident fees for vested benefits accounts.
If you do move to an EU or EFTA country, you will still be able to cash out supplemental contributions you have made above the obligatory contributions. The obligatory portion of 2a savings can be withdrawn under certain circumstances (when you use assets towards buying a home, for example).
If you have already left Switzerland at the time of withdrawing your assets, the amount of tax you pay will depend on the tax regime of the canton in which the bank or vested benefits foundation which operates your account is located. Consider moving your assets to a 3a account (or vested benefits account) in a low-tax canton before leaving Switzerland. The tax you pay corresponds to approximately one year’s income tax on your assets, so you still pay much less than the standard income tax rate.
4. Can I keep my Swiss health insurance?
If 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 the world rather than settle in another country, you can take your health insurance coverage with you.
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 health 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?
Unlike citizens of certain other countries, Swiss citizens are not required to pay Swiss income tax if they are not actually living in Switzerland.
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, the returns you earn on rentals may also be taxable in Switzerland. Property sales will also be subject to Swiss taxes.
6. Do I have to cancel compulsory insurance policies myself? (Health, car, household/liability)
The onus rests on you to cancel your insurance policies, including your compulsory health insurance, liability car insurance, and (where applicable) household insurance policies. Just upping and going without taking time to sort out your affairs can make you liable for payments and could even damage your debt collection register report and credit history. This could make your life difficult if you ever return to Switzerland (many Swiss emigres do).
Aside from insurance policies, take time to terminate any pending contracts (phone, car sharing, broadband, cable TV, 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, and they will bill you accordingly.
7. Can I continue to receive social security (AHV/IV) payments after I leave?
Disability pension (IV/AI). If you receive a disability pension, 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 (AHV/AVS). As a pensioner receiving social security retirement benefits (AHV), 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.