Moving to Switzerland raises many questions for expats. Which types of insurance are compulsory? How does retirement provision work in Switzerland? What do you need to consider when buying a home? This guide explains what you should bear in mind as an expat when it comes to insurance and pensions – so you can get off to a financially self-determined start with peace of mind from day one.
What insurance do expats need in Switzerland?
Not only do people moving to Switzerland face organisational challenges such as finding an apartment and visits to the authorities – insurance is also a key issue from the outset. Some types of cover, such as health insurance, are subject to strict deadlines and should therefore be taken care of first.
Mandatory insurance
- Health insurance: Within three months of arrival, everyone living in Switzerland must take out basic insurance with a Swiss health insurer.
- Motor vehicle liability: If you register a car or motorcycle when you move to Switzerland, you must have motor vehicle liability insurance. Without insurance, you cannot register the vehicle.
- Buildings insurance: Buildings insurance is mandatory in almost all cantons for homeowners. However, it only covers fire and natural hazards. In the cantons of Uri, Schwyz and Obwalden, it is even mandatory to take out buildings insurance with a private insurance company. However, in the cantons of Geneva, Ticino, Valais and Appenzell Innerrhoden, this type of insurance is not compulsory.
Recommended insurance policies
- Personal liability insurance: Although personal liability insurance is not mandatory in Switzerland, it is strongly recommended. It is virtually indispensable for tenants, and may even be stipulated as a requirement in the rental contract. This type of insurance covers damage that you unintentionally cause to others or their property.
- Household contents insurance: Household contents insurance is also optional but recommended. It covers your movable property, such as your TV or laptop, against damage caused by fire, water, theft or glass breakages.
Cover for illness, accidents and unemployment
- Gainfully employed persons are generally insured against accidents and unemployment via their employer. Accident and unemployment cover is mandatory for employees.
- Family members without their own income are not insured and need additional cover. They should take out separate accident cover with their health insurer.
- Expats in temporary employment can take out additional disability income insurance to cover their living expenses over the long term in the event of illness or accident.
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Retirement provision for expats: the 3-pillarsystem
The three-pillar system ensures financial stability in Switzerland and gives people the opportunity to lead a financially self-determined life in old age. It is based on a combination of state, occupational and private pensions:
1st pillar – AHV/AVS (state benefits)
In the case of state benefits, those in employment (including cross-border commuters) and employers pay monthly AHV/AVS contributions that finance the pensions of those who are currently retired. Later on, when you reach retirement age, you benefit from these payments yourself.
Note: you will only be entitled to a full AHV/AVS pension if you have paid your AHV/AVS contributions continuously without any breaks. The reference age is currently 64 for women and 65 for men; a single reference age of 65 will apply to everyone from 2028.
2nd pillar – occupational provisions (BVG/LPP)
The term “occupational provisions” refers the pension funds of employers. Together with the AHV/AVS benefits, they are intended to cover about 60% of your final salary. However, the actual level of benefits depends on the amount of your salary, the contribution period and the applicable pension fund regulations. In contrast to the first pillar, occupational pensions are a fully funded system, which means that individuals save and pay directly for their own benefits. The pension certificate provides information about the pension you will receive from your pension fund.
3rd pillar – private provisions (pillar 3a and 3b)
Private provisions are designed to close pension gaps and build wealth for retirement. A distinction is made between pillar 3a (tax-qualified provisions) and pillar 3b (non-tax-qualified provisions). Pillar 3a is capped at an annual maximum of abzug-3a (as at aktuelles-jahr) for people with a pension fund and subject to certain restrictions. You can deduct your annual pillar 3a contributions from your taxable income on your tax return. Pillar 3b is subject to fewer restrictions, but has no direct tax benefits.
Specific considerations for expats
If you only work in Switzerland for a limited period of time, you will often spend fewer years paying into the AHV/AVS and the 2nd pillar. For that reason, it is particularly worth starting with private provisions early in order to improve your financial security in old age or on returning to your home country. Depending on the destination country and any treaties in place with it, you may be able to withdraw assets from your pension fund or pillar 3a account when leaving Switzerland. Please also take note of the regulations in your destination country in this regard.
Buying ahouse in Switzerland as an expat
Expats often ask themselves whether it is even possible to buy a house in Switzerland.
House purchases for EU/EFTA citizens and people with a C permit
If you are an EU/EFTA national and can prove that you reside in Switzerland or have a category C settlement permit, you do not have to meet any special conditions to purchase a property. The conditions for buying a house or apartment are the same as for Swiss citizens.
Third-country nationals (from outside the EU/EFTA)
Third-country nationals (from outside the EU/EFTA) may purchase residential property as long as they have a valid residence permit (at least a B permit) and the property is at their current place of residence. Purchases are permitted for personal use only. Letting – even partially – is generally prohibited. The canton may grant a permit for this in exceptional cases. As cantonal regulations vary, it is worth asking the relevant authority directly.
Financing and affordability
In addition to the legal requirements, financing is also a key consideration. You will need a deposit of at least 20% to purchase residential property. At least 10% must come from “hard” equity, i.e. not from the 2nd pillar. Banks will finance a maximum of 80% of the purchase price in the form of a mortgage.
The deposit may come from savings, the sale of securities, funds from the 3rd pillar or an advancement of inheritance, for example. It is essential to examine what you can realistically afford, as many people underestimate the ongoing costs. These include mortgage interest, amortisation and maintenance and ancillary costs.
Rule of thumb: the total housing costs should not exceed one third of your annual gross income.
What happens to my retirement capital when Ileave Switzerland?
If you leave the country after working in Switzerland as a non-Swiss citizen, different regulations apply depending on the pillar. Note: find out everything you need to know in plenty of time before you leave the country and report your departure to the responsible authority or fund.
1st pillar: AHV/AVS and IV/AI
EU/EFTA citizens and countries with social security agreements (e.g. Australia, Canada, the US and Turkey)
Your AHV/AVS contributions will be retained. On reaching the reference age, you will be entitled to a (partial) pension from Switzerland. Payment will also be made abroad if you have completed at least one full contribution year. Immediate reimbursement of the contributions is not possible.
For citizens of countries without social security agreements:
People from countries without such an agreement have the option of having their AHV/AVS contributions reimbursed – under the following conditions:
- You have paid AHV/AVS contributions for at least one year.
- You are leaving Switzerland permanently.
- You must not have any entitlements to a pension.
With this reimbursement, all future entitlements to AHV/AVS and IV/AI benefits lapse. Only the AHV/AVS contributions actually made are paid out (employer and employee components, excluding interest).
How to prepare:
- Apply for an individual account statement from the social security administration office in good time.
- Submit an application for reimbursement to the social security administration office.
2nd pillar: occupational provisions (pension fund)
Emigration to an EU/EFTA country
- If you move to an EU/EFTA country, your mandatory savings remain locked in a Swiss account. They are only paid out when you reach retirement age or if you become disabled.
- By contrast, the supplementary portion (voluntary provisions over and above the statutory minimum) can be paid out.
Emigration to a third country (non-EU/EFTA)
As a rule, you can withdraw your entire pension fund assets (withdrawal benefit) as a lump sum. Alternatively, you can leave it in a vested benefits institution in order to receive pension or survivors’ benefits later. Note: confirmation of deregistration and your spouse’s consent are required for the application.
How to prepare:
- Contact your last employee benefits institution (pension fund) or vested benefits institution.
- Submit the application for cash payment (incl. confirmation of deregistration from your municipality and consent from your spouse, if you are married).
3rd pillar: tax-qualified provisions (pillar 3a)
You can always withdraw your pillar 3a assets on leaving Switzerland permanently – regardless of which country you move to.
Payment is made via the bank or insurance company with which your 3a account is held. Please note that cash payment is subject to separate withholding tax in Switzerland. Depending on the double taxation agreement in place, you may also be subject to tax in your new country of residence.
How to prepare:
Apply for the payment at an early stage as the process can take some time depending on the institution.
Important information for early withdrawals ofretirement capital upon emigration from Switzerland
- Report all changes of address abroad to the AHV/AVS and IV/AI, your pension fund and the vested benefits institution.
- Check whether all withdrawal benefits were transferred to the current employee benefits institution in the case of past changes of job. If you are unsure about anything, please contact the Central Office for the 2nd Pillar (Substitute Occupational Benefit Institution).
- Note: supplementary benefits are only paid out in Switzerland; they are not transferred abroad.
FAQS for expats
If you move to Switzerland, you must take out insurance with a Swiss health insurer immediately, as basic health insurance is mandatory for all residents of Switzerland. You have three months to register after entering the country. If you do not register by the deadline, your local authority will allocate you a health insurer and the premiums will be charged retroactively, in some cases with a premium surcharge.
An expat (short for expatriate) is someone who lives and works abroad for an extended period without being naturalised. They are usually specialists or managers, but some are digital nomads and pensioners. Unlike immigrants, expats usually plan to return to their home country.
Like everyone else, expats with a C permit pay taxes at federal, cantonal and municipal levels. Those who do not have a C permit generally pay withholding tax, which is deducted directly from their salary. The tax burden varies greatly depending on the canton and municipality.
Expat salaries in Switzerland depend heavily on the industry the person is working in, their experience level and their location. A gross salary of over CHF 100 000 per year is considered good; according to the Swiss Federal Statistical Office, the median salary for a full-time position is CHF 81 456 per year.
Like Swiss citizens, expats with a C permit must declare their income and wealth in their annual tax return and pay income and wealth tax. People without a C permit are generally subject to withholding tax, unless they are married to a Swiss citizen or exceed the income threshold defined by the cantons. This is usually CHF 120 000, but varies from canton to canton.
To receive an AHV/AVS retirement pension in Switzerland, you must have paid AHV/AVS contributions for at least one year. Pension fund assets are not subject to a minimum period; even in the case of short periods of employment, you are still entitled to withdrawal or vested benefits.
If they leave Switzerland permanently to move to a country outside the EU/EFTA, expats can have their pension fund assets paid out. Otherwise, as a rule, only the supplementary portion can be paid out; the mandatory portion is transferred to a vested benefits account or a vested benefits custody account if the person in question submits an application.
If you move to an EU or EFTA country, you remain entitled to AHV/AVS benefits and will receive a partial pension on retirement. The same applies to countries with social security agreements. AHV/AVS contributions are only paid out – without interest – for countries that do not have such an agreement with Switzerland. The entitlement to a pension then lapses.
You will receive a full AHV/AVS pension if you pay AHV/AVS contributions without any breaks for 44 years. The contribution period was standardised for men and women as part of the AHV/AVS 21 reform and applies from 2028.
The AHV/AVS pension can be drawn from two years before the reference age at the earliest – currently from the age of 63 for men and 62 for women. Drawing it early results in a lifelong reduction in the pension. Following the AHV/AVS 21 reform (which came into effect in 2024), you can flexibly take your pension between the ages of 63 and 70. In occupational provisions (2nd pillar), depending on the pension fund regulations, the pension can be drawn early from the age of 58.
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We provide comprehensive advice tailored to your goals at a place of your choice.
