Banking, Money and Taxes in Switzerland
While Swiss banks may not be as clandestine as often depicted by movies and media, banking in Switzerland is certainly defined by secrecy, and driven by sophistication and order. Expats need not be intimidated by this reputation for discreetness though, engaging in basic banking is extremely straight-forward, albeit, slightly more expensive for non-residents.
For those foreigners planning to become more permanent or to start a business, there is also an assortment of investment banking and private banking options available.
Though landlocked by member-states of the European Union, Switzerland is not part of the organisation, and thus retains its own monetary system. The colourful Swiss Franc (CHF) is the official currency of the country, which is divided into 100 rappen,
or centimes (for the French speaking parts of the nation).
Credit cards are widely accepted, though, expats should be aware that international cards will levy transaction charges. ATMs are everywhere, and are available 24 hours a day, 7 days a week. Traveller's cheques and foreign currency can be exchanged at banks (usually offer the best exchange rate), airports and bureaux de changes, some railway stations and some hotels.
Banking in Switzerland is serious business, and expats can absolutely entrust their money to local bankers, individuals best-known for their prudent and conservative financial management. Furthermore, customer service levels are high and bank charges, once you've opened the account, are low.
Non-residents may need to maintain a larger minimum balance in their accounts than locals, but otherwise, there's little difference between the process Swiss citizens and foreigners must go through to open a bank account.
There's a surprising assortment of banks in Switzerland (over 400 in total), but expats will most likely merely need to acquaint themselves with the “big” banks and the cantonal banks.
The two “big” banks are UBS and Credit Suisse. They both have a sizeable presence throughout the nation – as well as internationally, and offer almost every service that an expat would be interested in. Though they may be a bit more expensive than other banks, they are the best option for English speaking expats.
Those who speak one of the local Swiss languages may want to also consider cantonal banks. These institutions have small representations in particular cantons, and also offer basic banking services ideal for individuals and corporate clients. Wealthy clients often prefer the personal touch associated with cantonal banks.
Types of accounts of interest to expats:
While you can't walk into a Swiss bank with your passport and a smile and expect to walk out with an ATM card and an account, it is fairly easy to get started. It's not even necessary to have a Swiss residence permit if you have an employment contract.
First you should contact your employer and ask if they have any special agreements with a specific bank, this can often simplify the procedure.
Next, contact the bank with which you'd like to open an account and enquire about their requirements. In addition to what can be hefty minimum deposits, many banks require personal interviews prior to allowing you to open an account. Small banks, especially, prefer when a client is recommended or introduced by a trusted source.
After that, dress nicely and head to the bank with the following:
Usually, eBanking and the opportunity to sign-up for credit cards are included in listed bank services.
Expats living in Switzerland for more than 180 days per year are subject to personal income tax on their worldwide income. However, thanks to double taxation treaties with over 50 countries, tax paid in one country can be deducted from the other. Tax rates are low and seldom exceed 30 percent. Foreign workers who are not residents will have their tax deducted from the salaries by their employers.
Expats retiring to Switzerland, and not engaging in income producing work, can opt for lump-sum taxation, the amount of which is negotiated based on one’s standard of living.
For those foreigners planning to become more permanent or to start a business, there is also an assortment of investment banking and private banking options available.
Money in Switzerland
Though landlocked by member-states of the European Union, Switzerland is not part of the organisation, and thus retains its own monetary system. The colourful Swiss Franc (CHF) is the official currency of the country, which is divided into 100 rappen,
or centimes (for the French speaking parts of the nation).
- Notes: denominations of CHF 1000, 500, 200, 100, 50, 20 and 10
- Coins: denominations of CHF 5, 2, 1 AND 50, 20, 10 and 5 centimes
Credit cards are widely accepted, though, expats should be aware that international cards will levy transaction charges. ATMs are everywhere, and are available 24 hours a day, 7 days a week. Traveller's cheques and foreign currency can be exchanged at banks (usually offer the best exchange rate), airports and bureaux de changes, some railway stations and some hotels.
Banking in Switzerland
Banking in Switzerland is serious business, and expats can absolutely entrust their money to local bankers, individuals best-known for their prudent and conservative financial management. Furthermore, customer service levels are high and bank charges, once you've opened the account, are low.
Non-residents may need to maintain a larger minimum balance in their accounts than locals, but otherwise, there's little difference between the process Swiss citizens and foreigners must go through to open a bank account.
There's a surprising assortment of banks in Switzerland (over 400 in total), but expats will most likely merely need to acquaint themselves with the “big” banks and the cantonal banks.
The two “big” banks are UBS and Credit Suisse. They both have a sizeable presence throughout the nation – as well as internationally, and offer almost every service that an expat would be interested in. Though they may be a bit more expensive than other banks, they are the best option for English speaking expats.
Those who speak one of the local Swiss languages may want to also consider cantonal banks. These institutions have small representations in particular cantons, and also offer basic banking services ideal for individuals and corporate clients. Wealthy clients often prefer the personal touch associated with cantonal banks.
Types of accounts of interest to expats:
- Personal (CHF or Euro): best for daily, basic banking and receiving wages
- Saving (CHF or Euro): Similar to a personal account, but interest rates on offer are higher in exchange for more limited withdrawal capabilities
- Foreign currency : Accounts open to deposits in any currency; usually interest free
Opening a bank account in Switzerland
While you can't walk into a Swiss bank with your passport and a smile and expect to walk out with an ATM card and an account, it is fairly easy to get started. It's not even necessary to have a Swiss residence permit if you have an employment contract.
First you should contact your employer and ask if they have any special agreements with a specific bank, this can often simplify the procedure.Next, contact the bank with which you'd like to open an account and enquire about their requirements. In addition to what can be hefty minimum deposits, many banks require personal interviews prior to allowing you to open an account. Small banks, especially, prefer when a client is recommended or introduced by a trusted source.
After that, dress nicely and head to the bank with the following:
- Passport
- A recent utility bill (water, gas, electricity but not telephone) to validate your legal address.
- Any documents necessary to substantiate your economic background. These documents will depend on your profession and the source of your funds (copy of your employment contract, diploma, bill of sale, etc.).
- Minimum Deposit required
Usually, eBanking and the opportunity to sign-up for credit cards are included in listed bank services.
Taxes in Switzerland
Expats living in Switzerland for more than 180 days per year are subject to personal income tax on their worldwide income. However, thanks to double taxation treaties with over 50 countries, tax paid in one country can be deducted from the other. Tax rates are low and seldom exceed 30 percent. Foreign workers who are not residents will have their tax deducted from the salaries by their employers.
Expats retiring to Switzerland, and not engaging in income producing work, can opt for lump-sum taxation, the amount of which is negotiated based on one’s standard of living.
