LEAVING SWITZERLAND

Closing A Chapter

Before bidding “Au revoir”, “Auf wiedersehen”, “Arrivederci”, we strongly encourage you to have a conversation with us to make sure you are not leaving anything behind in Switzerland if you have wondered about any of the questions below. As Financial Planners our job is simply to:

1. Look at the Pension Assets you have accumulated (1st, 2nd and 3rd pillar)
2. Understand your objectives (want to access the funds or invest them for retirement)
3. Explain to you the types of options available, with their pros and cons
4. Help you select the solutions of your choice
5. Keep you on track and assist with your questions on an ongoing basis.

Switzerland is one of the very few countries that gives you the opportunity to cash in your pension when leaving its borders; it very much depends on whether you are going back to an EFTA country or outside the EU. This is the main factor dictating how much of your pension you can access. Also, be aware of the fact you will have to pay an exit tax (when extracting your pension) which can be re-couped after having declared your pension (and paid taxes) in your new country of residence. Beware, some countries have no agreement with Switzerland, and you are therefore exposed to paying taxes in both Switzerland and your new country. International Professionals leaving Switzerland often do not know or understand their options which results in increased taxation and lost opportunities. Sometimes people forget to even extract their pension at all; hence why there is 5 billion CHF of unclaimed Vested Benefits with the “Institution Suppletive”. One thing is sure, speaking to the right professional can save you tens of thousands in taxes alone.
Find out exactly what all this means for you personally.

How many years have you contributed to the OASI? Have your contributions been paid by your employer? How much have you contributed? When do you wish to take your state pension? Have you divorced whilst in Switzerland? Are you expecting to be paid in a country that has a DTA (double tax agreement) with Switzerland or not? These are standard questions that must be answered to put a value to your Swiss pension. Every year thousands of people leave Switzerland; many of them will never consider claiming their Swiss state pension by the time they retire, possibly decades later. When leaving Switzerland, we will help you request the documents necessary, to make sure you get your pension when the time comes, from the authorities. It is your money, don’t abandon it!
Find out exactly what all this means for you personally.

Working in Switzerland is a privilege for all of us. You are leaving Switzerland, but you are not 100% sure that you won’t be back. You have just received your new B / C permit. You do not necessarily have to return your permit when leaving. Options are available to “pause” your permit for a period, allowing you to return to Switzerland in the future should you wish to.
Find out exactly what all this means for you personally.

As a non-Swiss tax resident, your third pillar A must be stopped or switched to a third pillar B. In fact, it is not allowed for contributions into a Third pillar A, to continue once the individual has departed from Switzerland. It would also be ill advised as you can no longer claim the tax benefits associated with this solution and you would be exposed to paying an exit tax on funds accumulated when withdrawing at maturity. These are the basics – but the following questions must also be answered before you can be suitably advised:

• Have you opened a bank third pillar or an insurance third pillar?
• Do you want to cash it in now or later?
• Is your money held in cash savings or invested?
• Is life insurance included or not?
• Do you have a premium disability cover option?
• Have you secured your income with an annuity payment in case of hardship?
• When did you start your third pillar?
• Which country is your next destination?
• Do you intend to come back to Switzerland?

The answer to every one of these questions will influence your personal case and the options available to you.
Find out exactly what all this means for you personally.

Depending on when you leave during the year and your overall tax burden, whether you are taxed at source or submit a tax return, we can help you leave Switzerland with an estimate of “overpaid” taxes. Good planning should entitle you to receive a cheque from the tax authorities to soften the upheaval of moving.
Find out exactly what all this means for you personally.

Like many International Professionals, you may well have accumulated some CHF-denominated savings in your Swiss bank account. You are now wondering what you should be doing. There is no right or wrong answer; it all depends on the following: Might you need CHF in the future? Do you intend to return to Switzerland in the future? Do you consider Switzerland a safe place to keep your money? What is the current FX rate between CHF and your currency of choice? Historically, is this a “good rate” or not? Is there anything in the news which could potentially significantly impact the conversion rate in the near future? You must also bear in mind the guarantee fund that secures your bank deposits up to a certain value per client per bank; you should consider whether it is wise to keep a deposit value above this amount. Also, is it a good idea to remain invested in CHF when you will have little need of the currency in the future other than as a potential exchange rate hedge?
Find out exactly what all this means for you personally.

You have decided to leave. In addition to setting yourself up in your new country, you must also “wrap up” your “Swiss life”. For every Swiss insurance policy, you terminate, you will have to replace it with an equivalent in your new host country: home insurance, fire insurance, contents insurance, third party liability insurance, valuables insurance, health insurance, car insurance, and so on. You can do it all yourself, or you can use professional help to make sure you are not leaving yourself exposed to unnecessary fees and that you are not left between policies and without cover for longer than you should be.
Find out exactly what all this means for you personally.

Most individuals we meet have, on average, worked in two or three different countries before arriving in Switzerland. The life of an International Professional has many benefits but unfortunately spending ten years in four countries often does not necessarily mean you will subsequently be financially secure in retirement. In fact, some countries do not provide any pension benefits to people who have worked less than ten years in the country. Others like Switzerland are seriously looking at reforming the 1st and 2nd pillar system (hottest topic in Switzerland for the past five years, still being debated). Financial Planning is essential for International Professionals to make sure there is always an end goal and a proper plan in place to achieve that goal. None of us want to have an exciting professional and personal life only to realise that we must choose between retiring where we want to retire or pay for our children’s university fees. Reality will always come knocking at your door sooner or later so make sure you are prepared for it. We can help you optimise your financial management throughout regular relocation moves and use them to your advantage.
Find out exactly what all this means for you personally.

Unfortunately, there is no black or white answer to this question. The relationship you have with your current advisor, the size of their company, its history, the management systems used by the company – none of these are a cast iron guarantee you will continue to be looked after in perpetuity by the same advisor. Unfortunately, advisors can come and go.

What is important is the management systems a firm has in place to manage the transition process diligently and smoothly to a new advisor, who will look after your affairs with the same dedication as your original advisor. Any successful business is built upon the cornerstone philosophy and system to ensure the practical reality matches it – that no process should be reliant upon any one individual.
Find out exactly what all this means for you personally at Swissential SA.