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Moving to Switzerland will mean many changes to your everyday life. This overview will help you get to know the Swiss system step by step.
As soon as you arrive in Switzerland, the Swiss franc becomes part of your everyday life. Switzerland is not part of the Eurozone and has its own currency, whose monetary policy is independently managed by the Swiss National Bank (SNB).
Historically, the Swiss franc has been considered a relatively stable currency. This provides a reliable foundation for your medium and long-term financial planning. However, exchange rates do fluctuate. This is particularly relevant if you have income, savings or debts in other currencies, or if you regularly transfer money abroad.
Nevertheless, the Swiss banking sector is well-suited to expats. Swiss banks are well-regulated, adhere to high security standards and often have an international focus. Many also offer their services in multiple languages. This can make it easier for you to get started – for example when opening an account, making international payments or reorganizing your finances.
Domestic and international money transfers in Switzerland are processed through the globally standardized IBAN system. However, to make everyday transfers – such as rent, health insurance premiums or receiving a paycheck – expats in Switzerland usually need a local bank account.
It therefore makes sense to open a new account as soon as possible after arriving. It’s best to research in advance how to choose the right bank account and payment cards.
If you want to invest your savings or build wealth in Switzerland, you have several options. The right choice depends on your personal time horizon and individual goals.
If you’d like to deposit your short-term savings at minimum risk or build up a financial cushion, you can open a savings account at a Swiss bank. This is often a good idea, especially for expats who have only recently arrived in Switzerland. It allows you to build up an emergency fund – for example for unforeseen expenses or major purchases in your new environment. However, returns on savings accounts are generally low.
If you plan to stay in Switzerland for an extended period or are looking to build wealth over the medium to long term, you can easily invest in funds or ETFs via a custody account, for example. These often offer more attractive potential returns than savings accounts.
Digital platforms make it possible to start investing gradually. For example, as an expat, you can easily invest in the stock market via UBS key4 trading.
Important: All investments carry risk. Investors should consider their own investment horizon and understand their personal risk tolerance. Seeking advice from experts can be worthwhile in order to identify the right investment strategy.
The Swiss pension system is based on three pillars, which together help people save for retirement or other goals. The three pillars are:
Pillar 3a is of particular interest to expats who plan to stay in Switzerland for the long term. This is because contributions are deductible from taxable income up to an annual maximum amount. The downside is, the money is tied up long term and you can only withdraw it when you retire or in certain exceptional cases, such as to finance a home purchase or if you leave Switzerland permanently.
Once you’ve opened an account or custody account with your bank, you can make flexible deposits into your pillar 3a account via bank transfer.
Tip: You can easily set up UBS Fisca 3a, UBS’s digital solution for pillar 3, in our Mobile Banking App.
The Swiss rental market is tight in urban areas – vacant apartments are scarce and rents are high, particularly in Zurich, Geneva and Basel. However, rental prices vary greatly across the country. Just a few minutes outside the city center, rents are typically much lower.
Important: When signing a lease in Switzerland, you are usually required to pay a security deposit. You should clarify any unresolved issues in the lease with the landlord before signing it.
When purchasing real estate in Switzerland, certain restrictions under the Lex Koller apply to foreign nationals. Depending on their country of origin and residence permit status, expats may be required to obtain approval before purchasing a property.
In addition, you generally need at least 20 percent of the purchase price as a down payment to qualify for a mortgage. The bank will also review your income and assets to ensure that you can afford the mortgage over the long term.
Are you planning for the long term and interested in buying a property? If so, it’s best to seek advice from your bank.
The Swiss tax system may seem complex to expats at first. However, some basic knowledge will help you get your bearings more quickly.
Taxes are levied at three levels in Switzerland: federal, cantonal and municipal. As a result, the tax burden varies depending on where you live. It therefore makes sense to also consider the tax rate when choosing which municipality to live in.
If you are a foreign employee living in Switzerland, your income tax is generally deducted directly from your paycheck. Your employer remits this withholding tax to the tax authorities. However, there are exceptions, such as:
Under certain conditions, a subsequent assessment is also conducted. A subsequent assessment is conducted automatically for gross income subject to withholding tax of CHF 120,000 or more. However, you can also apply for one voluntarily if you are claiming deductible expenses. To do so, you must submit an application to the relevant tax authority by the deadline. For information on the exact deadlines and conditions regarding withholding tax, please contact the tax authority in your canton of residence.
Some types of insurance are mandatory in Switzerland, while others are recommended. For expats, it’s a good idea to get an overview early on.
Basic health insurance is one of the mandatory types of insurance. This generally applies to all individuals residing in Switzerland, regardless of nationality or employment status. Since premiums vary significantly depending on the canton, insurance model and age group, it’s advisable to compare different offers before making a decision.
Personal liability insurance, on the other hand, is not required by law. However, it is often recommended because of its broad coverage. By using a checklist for your move to Switzerland, you can ensure that you don’t overlook any important insurance coverage and that you’re fully protected.
The Swiss financial system offers solid structures and clear guidelines – including for newcomers.
You don’t have to do everything at once. Step by step, you can gain clarity about your financial situation in Switzerland.
Arrange an appointment for a non-binding consultation or if you have any questions, just give us a call.
Disclaimer
This publication is for personal information purposes only within Switzerland and is not to be understood as a recommendation, offer or solicitation of an offer for investment or other specific products and services. It is not intended to form investment, legal or tax advice and should not be used as the basis for financial decisions. Before making a decision, you should obtain professional advice.
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