What You Need to Know About Relocate to Switzerland
Hollywood may have painted a romanticized, spy-filled scenario regarding Swiss banks, but the reality is somewhat different. However, the premium placed on anonymity when requested is true enough and Swiss banks are indeed sworn to protect the identities of the account holders with “numbered accounts.” To help you navigate through your pre-conceived notions and on-ground realities, it is best to hire the services of relocation experts who can help you transition smoothly into your new life in Switzerland.
Banks and Taxes
Hollywood may have painted a romanticized, spy-filled scenario regarding opening a Swiss bank account, but the reality is somewhat different. The premium placed on anonymity upon request is true however, and Swiss banks are indeed sworn to protect the identities of the account holders with “numbered accounts.”
To help you navigate through your expectations versus reality, it is best to hire the services of relocation experts who can help with a smoother transition to a new life in Switzerland. As a new resident of Switzerland, it is important to familiarize yourself with the banking and tax system.
While it is true that banks will protect the secrecy of “numbered accounts,” Swiss banks do conduct a thorough identity check to ensure that there is no illegal activity going on.
The tax system is just as straight forward. The main principle being that all 26 cantons in the country and 2,250 municipalities can impose their own taxes on income, wealth, properties, and other incomes. Make sure you check the laws in your specific location.
How to Open a Swiss Bank Account
Switzerland is almost as famous for its secretive banking system as it is for its chocolate—and some of it may be true. For one, you can indeed open a bank account in Switzerland before you even arrive in the country.
The most important requirement in opening a bank account in Switzerland is having the right documents to show your identity. While you had to be personally present to submit them prior to 2016, today, you can just simply mail them.
There is one very important benefit in opening a Swiss bank account before setting foot in the country. That is, to avoid the eternal loop of providing the bank with a present Swiss mailing address when in fact, you also need a bank to sign on your apartment lease. Thankfully, this can all be avoided, but do remember that the activation of an account may range from one week to one month.
Required Documents to Open a Bank Account
The requirements are straightforward so be sure to prepare the following documents:
- Proof that you are 18 years old or older
- Proof of residence
- Proof of where your money is coming from (previous bank statements, employee contract, and/or pay slips).
Switzerland has strict anti-money laundering laws so you will be required to express in writing were your money is coming from. It is also routine to ask you for additional information such as a copy of your utility bill, visa status, tax fillings and even a housing contract. All these documents will be required to have an apostille seal.
What Is a Numbered Account?
This is probably what the Swiss banking system is most known for. It is a seemingly anonymous bank account that is referred to only by a number series and not a name. Do note that these accounts have the highest maintaining fees which average over 1,000 CHF (1,020 USD) per year and you will still have to go to the bank in person to open the account.
- Most banks do not require a minimum deposit but you will be expected to keep a minimum balance. Standard monthly banking fees will also be charged. This is generally a small amount, and often not more than 5 CHF (5 USD).
- While certain banks claim zero charges for transactions, they normally charge a monthly or annual service fee. These vary from bank to bank and it is best to check before deciding to commit.
- When personally opening a Swiss bank account, they might try to convince you to get a numbered account. Take notice that it has the highest maintenance fee, so be sure that you really need it.
Best Banks in Switzerland
Here’s a list of what have been touted as the best banks in Switzerland. (Insider tip: If you are looking for lower rates for savings accounts, turn to your local cantonal banks instead of those with a national customer base)
- Post Finance
- Credit Suisse
- Swiss Raiffeisen
Best Online Banks in Switzerland
- Zürcher Kantonalbank
- Swiss Raiffeisen
- CIM Banque
What is the Tax System in Switzerland?
If you are planning to stay in Switzerland for more than 90 days, then it would be beneficial to learn about the tax system as you are required to start paying your dues within the first 30 days of working in the country.
Each of the 26 cantons and 2,250 municipalities can impose their own taxes so it is best to check which applies to you. Not to worry, as each Canton has a website with all the information you need. CLICK HERE to learn more.
Switzerland has four levels of taxation:
- Federal: These taxes are governed by the Federal Constitution.
- Canton: These taxes are governed by the specific canton.
- Municipal: These taxes are governed by the city or town where you live.
- Church: Taxes levied on members of the three national churches, Christian Catholic, Roman Catholic, and Protestant.
What is the Income Tax in Switzerland?
Foreign workers are required to pay income tax in Switzerland, and this is deducted directly from your salary. The exact amount though varies from canton to canton but the 2010 average income tax for foreigners was at 40%.
However, the swiss government does take into consideration other factors to lower your taxes such as your income, rent, educational costs and childcare. Immigrants on the other hand are taxed based on households—this makes it not only simpler but brings the total amount due lower. There are exceptions to the rule, so make sure that you hire a relocation expert who can provide you with the expert tax advice you may need. As mentioned previously, the income tax rate varies from canton to canton but for reference here is a sample Income Tax table:
|Taxable Income Bracket CHF||Taxable Income Bracket USD||Tax Rate|
This tax rate continues to climb until it hits 895,901 CHF (914,490 USD). Anything above this amount is taxed at 11.5%.
- Swiss VAT
- Stamp duties
- Withholding tax
- Custom duties
- Special consumption taxes
Self-employed people pay taxes based on the requirements of their canton but generally they pay federal, canton, and municipal taxes.
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