People who plan to emigrate or already live abroad face many questions. How much money do I need for my living expenses? What insurance coverage do I have if I have an accident abroad? This article provides insight into key topics that should be considered.
Finances
When it comes to finances, crucial questions must be addressed to set the course for a successful adventure abroad. Consider the following points:
- Moving from Switzerland entails new living costs in the new country of residence. It is therefore advisable to calculate the initial capital needed and create a financial plan that includes a buffer for unforeseen additional expenses.
- Many Swiss expatriates continue to require a Swiss bank account even after relocating abroad; this may be necessary for mortgage payments or pension withdrawals. It is essential to clarify in advance which financial institutions provide the required services in your new country of residence.
- In some countries, proof of assets or income is required before a local bank account can be opened. Switzerland’s stable economy and strong currency are also reasons why maintaining a Swiss bank account after emigration may be beneficial.
- If real estate is owned, it is advisable to review mortgage terms and any impact on affordability assessments, especially if the property is to be rented out after emigration.
- For existing bank accounts, it is recommended to check the account structure and powers of attorney before emigrating. Granting power of attorney provides flexibility and can be particularly helpful in handling administrative matters in unexpected situations.
- Pension schemes and taxation vary widely by destination country. It is advisable to seek professional advice to clarify obligations early.
Leave nothing to chance when it comes to insurance
Insurance is closely linked to financial security and must be carefully considered before emigrating. Upon relocating abroad, the legal obligation for health and accident insurance in Switzerland generally ceases. Emigrants should therefore research their options with Swiss or international health insurers and familiarize themselves with the healthcare system in their new country of residence.
Health insurance requirements are individual, therefore additional coverage should be considered where necessary. If the new country of residence mandates compulsory health insurance, a temporary solution may be required until coverage takes effect, and the standard of the mandatory insurance should be assessed.
Some Swiss health insurers offer international services, while global providers are also an option. It is important to check whether international policies include coverage typically provided in Switzerland, such as maternity coverage. Additionally, Swiss health insurance policies must be arranged before deregistering from the local municipality.
Swiss expats always remain a part of Switzerland
Before moving abroad, it is generally advisable to gain a thorough understanding of the local conditions. This will help to better grasp everyday challenges and find effective ways to navigate them. Swiss expatriates remain part of Switzerland and can continue to participate in elections and referendums. To do so, they must register with the Swiss representation abroad.
Zürcher Kantonalbank has compiled a checklist designed to support individuals for planning a successful move abroad.
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Reliable support for expats
Soliswiss, a cooperative specializing in advice and support for expatriates, helps many people navigate the complexities of emigration. Even after moving, Swiss citizens can turn to Soliswiss for guidance and practical solutions.
In an interview, Nicole Töpperwien, Managing Director of Soliswiss, shares the most common questions she receives from Swiss nationals living abroad.
Nicole Töpperwien, being financially and legally secure in an emergency is crucial. What aspects should individuals clarify in advance if they plan to live abroad?
There are many factors to consider. Some challenges will depend on individual circumstances. However, key areas for financial security include social insurance, particularly retirement planning and health insurance, as well as protection against financial risks such as disability or unemployment. Depending on the country of residence, it may also be advisable to take out liability insurance or even coverage for kidnapping incidents. Many financial aspects need to be addressed, including maintaining or changing a banking relationship with a Swiss institution if the current bank does not provide suitable services for expatriates. Estate planning and financial security for family members must also be reviewed when relocating abroad. It is essential to always consider the entire family’s situation.
How do financial considerations differ by country?
The differences can be significant. For instance, relocating to a politically unstable country with a weak currency presents different challenges compared to moving to an economically stable nation. Banking options also vary—while some countries make it relatively easy to maintain a Swiss bank account, invest in Swiss securities, or obtain a mortgage for property in Switzerland, others impose restrictions. Investing in the new country can be very attractive in some cases, in other cases it can also pose risks, especially if funds cannot be easily transferred out. Pension planning is another factor; some countries offer robust state-supported pension schemes, while others provide limited options, potentially leading to loss of entitlements when returning to Switzerland. Additionally, tax systems, expected tax burdens, and social security contributions differ widely, as do the costs of living between and within different countries.
What other issues do expats commonly face?
Health insurance is one of the most critical topics. It is perhaps the most essential coverage for individuals, as being uninsured can lead to severe financial and emotional stress. For those moving within the EU/EFTA region, health insurance is usually accessible, though regulatory complexities can arise. However, in other countries, eligibility for health insurance can become a major concern, depending on age and health conditions. This is why we always analyze every situation carefully. We also frequently receive inquiries from individuals with unconventional lifestyles, such as those residing in multiple countries or leading a nomadic existence. These cases present unique challenges in structuring financial and legal stability.
What challenges do expats often underestimate?
Setting and adapting into a new country takes time and patience. Understanding how things work and feeling at home in an unfamiliar environment is a process. Even in neighboring countries, government processes and regulations operate differently than in Switzerland – not essentially less efficient, just differently. Finding reliable information can be a challenge as each expat has its own story and may not fit into standard bureaucratic processes. For this reason, we strongly recommend seeking professional guidance, especially regarding tax matters. Here are some key aspects to consider:
- The year of departure or arrival must be carefully examined. In Switzerland, unlimited tax liability usually ends on the official departure date and begins anew on the date of return, whereas other countries assess tax obligations for the entire year based on the relocation date. Some impose even exit taxes.
- Withdrawing funds from the second or third pillar pension scheme can have significant tax implications depending on your new country of residence. It is advisable to clarify different options early in advance to avoid unexpected costs.
- Many countries have reporting obligations, even if no tax is due on certain assets. Failing to meet these requirements can lead to unpleasant consequences.
- Special attention should also be given to inheritance tax laws. In certain countries, the estate is taxed, while in others, the heir pays taxes on their respective share of the inheritance. Some countries tax the estate based on the deceased’s place of residence, whereas others tax at the residence of the respective heirs. These differences in systems can lead to double taxation. Thorough planning can help avoid unpleasant surprises. While not everything can be anticipated, proper preparation makes it easier to embrace the experience of living abroad.
About Nicole Töpperwien
Nicole Töpperwien has been the Managing Director of Soliswiss since 2018. She spent part of her youth as a Swiss expatriate in Germany before returning to Switzerland to study law. Her career has taken her around the world, first for a master’s program in the United States, then to North Macedonia for work, followed by business trips to more than fifty countries. Today, she is committed to helping others take the step abroad together with the Soliswiss team.