Switzerland, situated in the heart of Europe, provides a stable and secure setting with an appealing legal and tax structure. Early planning and preparation are vital for a successful move, whether for personal or business purposes.

Moving to Switzerland demands meticulous planning to avoid unexpected issues at the border and after the relocation. The initial step involves an early evaluation of the legal and tax prerequisites. While your choice of residence should align with your personal preferences, seeking guidance from a knowledgeable Swiss advisor and a dependable moving company can ease the transition, particularly in dealings with customs authorities.

The Swiss Employer of Record specialises in aiding foreign companies in relocating and managing employment-related aspects, such as establishing employment contracts and ensuring adherence to Swiss tax and immigration laws. Our expertise enables you to concentrate on settling into your new home.

Tax considerations

Switzerland boasts a competitive tax environment for individuals and businesses. Federal, cantonal, and municipal levels of government shape its complex tax structure. Taxes are levied at these levels:

• Federal Taxes
• Cantonal and Municipal Taxes

Federal tax law is uniform across Switzerland, but each of the 26 cantons has its tax laws. Municipal taxes are calculated as a multiple of cantonal taxes. Tax rates vary widely among cantons and municipalities, making residence choice a critical element of tax planning. The maximum federal income tax rate is 11.5%, while cantonal and municipal rates can reach 36%. Learn more about the direct and indirect taxes in Switzerland below.

Direct taxes

Direct taxes, which make up about 70% of total tax revenue, include:

• Income Tax: Progressive rates for individuals.
• Corporate Tax: Rates between 11.7% and 21.6% on profits.
• Personal Wealth Tax: Progressive rates in most cantons.
• Inheritance tax is mainly levied at the cantonal level, with some exceptions. A federal withholding tax of 35% applies to bank interest and lottery winnings but can be reclaimed if the relevant assets and income are disclosed.

Indirect taxes

Indirect taxes account for approximately 30% of tax revenue. The leading indirect tax is the value-added tax (VAT), currently at 8.1%. The rates for accommodation services (3.8%) and necessities (2.6%) are reduced. Medical and educational services are exempt from VAT.

For more detailed tax information, visit the Swiss Service of Confederation website, as well as the cantons and communes.

Social Security and insurance

Switzerland’s social insurance system provides comprehensive protection for residents and dependents. This network helps cover financial risks that individuals might not be able to manage independently.

Switzerland’s social security system is divided into five main areas:

1. Old-age, Survivors’, and Invalidity Insurance (AHV/IV)
2. Health and Accident Insurance
3. Income Compensation for Military Service and Maternity Leave
4. Unemployment Insurance
5. Family Allowances

These insurances offer various benefits, such as pensions, unemployment benefits, family allowances, and medical and accident costs coverage. The benefits of Switzerland’s social insurance are mainly funded through contributions based on income. Here’s a breakdown of how different types of insurance are financed:

• Health Insurance: Each person pays a premium for their health insurance coverage.
• Old-age and Invalidity Insurance: Funded by contributions from the federal government, the cantons (regions), and individuals. 

The government also offers supplementary benefits and subsidies health insurance premiums for low-income people.

Switzerland’s network of social security agreements prevents double contributions and ensures comprehensive coverage. Health insurance is mandatory for all residents, including children. Foreign health insurance is valid only under limited circumstances, so it is crucial to arrange for Swiss health insurance promptly.

After applying for basic health insurance, you must select a general practitioner. You will receive a health insurance card, which should always be carried for hospital admissions and contains your AHV social security number. Supplemental health insurance is available for additional services.

Residence permits and housing

Residence and work permits are available for EU/EFTA citizens, while non-EU/EFTA citizens face stricter conditions, including quotas and qualification requirements. A well-prepared application is essential for obtaining a permit.

Foreigners with a Swiss residence permit can acquire real estate without limitations, subject to general requirements. Once you secure housing and health insurance, you must register at your local council (Gemeinde) or cantonal immigration office. This process involves providing a picture and biometric data for your residence permit.

Opening a Swiss bank account

Setting up a Swiss bank account requires proof of address, a residence permit, and identification, such as a passport. Some banks may also request your work contract. After approval, you will receive your bank cards by post, and you can provide your IBAN to your employer for salary payments.

Simplifying your move as an expat in Switzerland with Swiss Employer of Record

Moving to Switzerland involves careful planning, understanding the tax system, securing health insurance, obtaining necessary permits, and setting up a bank account. With the right support, your transition can be seamless and successful. Employer of Record in Switzerland eases the process by managing HR and payroll tasks, allowing you to focus on other aspects of your move. Our expertise ensures compliance with Swiss laws, making your transition smoother. Explore our services and contact us to discover how we can assist with your relocation needs.