For many Swiss citizens, Thailand is an attractive place for retirement. The climate, the cost of living, family relationships or a personal connection to the country can be good reasons for wanting to spend one’s later years in Thailand.
Anyone who emigrates to Thailand at retirement age should, however, prepare the move carefully. The main issues are AHV, pension fund, health insurance, taxes, banking relationships and long-term financial security.
Deregistration in Switzerland and Registration with the Swiss Representation
Anyone who definitively leaves Switzerland must deregister with their last municipality of residence. Swiss citizens who have deregistered in Switzerland should register with the competent Swiss representation abroad within 90 days. For Thailand, this is the Swiss Embassy in Bangkok. This registration is free of charge and facilitates contact in emergencies as well as formalities relating to identity documents, marriage, birth or death.
At the same time, it should be clarified before the move which visa allows long-term residence in Thailand. A reliable address in Thailand is also important, as it may be required by Thai authorities, banks, insurance companies and for registration with the Swiss representation.
Receiving an AHV Pension in Thailand
A central concern when leaving Switzerland is the AHV. Swiss citizens can also receive their Swiss AHV pension while resident in Thailand. Anyone who already receives an AHV pension and emigrates to Thailand must report the move and the new address. For insured persons abroad, the competent authority is then no longer a cantonal compensation office, but the Central Compensation Office (CCO); within the CCO, the Swiss Compensation Office (SCO) is responsible for retirees abroad.
Changes of address, civil status or bank details must also be reported. The CCO provides online services for this purpose.
Anyone who is not yet retired at the time of emigration but is close to retirement age should apply for the AHV pension in good time. The AHV pension is not paid out automatically.
Supplementary Benefits and Helplessness Allowance
It is important to know that supplementary benefits to AHV or IV are not paid out further if the person is resident in Thailand. Helplessness allowances and certain cost contributions are also tied to residence in Switzerland. The CCO expressly states that such benefits are lost if a person settles abroad.
Anyone who depends on supplementary benefits during retirement should therefore carefully check before deregistration whether their livelihood in Thailand is secured without these benefits.
Pension Fund: Pension or Capital
Alongside the AHV, occupational pension provision is central for financial security in old age. Anyone who already receives a pension fund pension should inform the pension fund of the move, the new address, the bank details and any tax-relevant information.
Anyone who is shortly before retirement must decide whether the pension fund assets should be taken as a pension, as capital or as a combination of both. This decision is particularly important because it cannot simply be reversed after retirement. Before making the decision, liquidity needs, life expectancy, protection of the spouse, tax consequences and residence in Thailand should be examined.
For Thailand, retirements benefits should be carefully distinguished. According to the Federal Tax Administration (FTA) overview, ongoing pensions from private-law pension funds are not subject to Swiss withholding tax. In the case of lump-sum benefits from the 2nd pillar, withholding tax is initially deducted, but according to the FTA overview it can be reclaimed for Thailand.
For lump-sum benefits from the pension fund or from vested benefits assets, Switzerland levies withholding tax if the person is resident abroad. The tax is levied in the canton where the pension or vested benefits institution has its registered office. Pensions may also be subject to Swiss withholding tax, insofar as the applicable double taxation agreement does not allocate the right of taxation to the state of residence.
Pillar 3a
Pillar 3a assets can also generally be withdrawn in the event of definitive departure from Switzerland. As a rule, this requires that deregistration from Switzerland has taken place and that the new residence abroad can be proven.
The withdrawal of pillar 3a assets has tax consequences. Therefore, it should not only be checked whether a withdrawal is possible, but also when and how it should be made. If there are several pillar 3a accounts, staggered planning may, under certain circumstances, be advantageous from a tax perspective.
According to the FTA overview, pensions from pillar 3a are subject to Swiss withholding tax; for lump-sum benefits from pillar 3a, no refund is provided for Thailand. Before a withdrawal, it should therefore be checked from which pension institution the benefit originates and whether it is a pension or capital. For Thailand, the tax treatment must be examined individually.
Health Insurance During Retirement
In the event of a definitive move to Thailand, Swiss basic health insurance ends. Anyone moving to Thailand should therefore organise a new health insurance solution at an early stage.
Especially at retirement age, private or international health insurance can be expensive, contain age limits or exclude existing illnesses. Particularly important are coverage in old age, choice of hospital, pre-existing conditions, deductibles, emergency treatments and repatriation.
Anyone with health problems should arrange the insurance solution before deregistration. After moving away, it may become more difficult to obtain suitable and affordable coverage.
Taxes
Anyone who transfers their centre of life to Thailand is only subject to limited tax liability in Switzerland. The centre of life must effectively be in Thailand; this means that if a person continues to spend a lot of time in Switzerland, a tax authority may possibly question this.
Even after moving away, Swiss tax consequences may continue to arise, particularly in relation to real estate in Switzerland, pension withdrawals, pensions or other income from Swiss sources.
Withholding tax on pension benefits is particularly important. If pension fund assets, vested benefits or pillar 3a assets are paid out after the move, Switzerland generally levies withholding tax. The amount is not determined by Thai law, but by the canton in which the pension or vested benefits institution has its registered office. The extent to which such income is taxed twice in Thailand must be examined individually in each case.
There is a double taxation agreement between Switzerland and Thailand. However, the double taxation agreement is not a general solution for all tax questions. It applies only to certain types of income and specific cases of application. It should therefore be examined in each individual case whether Swiss withholding tax remains definitively owed, whether a refund is possible and how Thailand treats the withdrawal or later pensions for tax purposes.
Swiss Bank Account and Financial Services
A functioning banking relationship is also important during retirement. AHV, pension fund, insurance policies, credit cards, securities accounts and standing orders are often linked to existing Swiss accounts.
If a person is resident in Thailand, banks may restrict services, charge additional fees or no longer offer certain products. In the worst case, they may even terminate the banking relationship.
Before moving away, it should be clarified whether existing accounts, credit cards, securities accounts, e-banking access and pension accounts can be maintained. SwissCommunity provides information on its website about the banking issue for Swiss citizens abroad and refers, among other things, to offers from Zürcher Kantonalbank and Banque Cantonale de Genève.
It is advisable not to clarify these questions only after deregistration. Once the change of residence has been completed, opening or adjusting a banking relationship can become significantly more difficult.
Estate Planning, Family and Assets in Thailand
Anyone who moves to Thailand permanently should also keep family and property law questions in mind. This concerns in particular marriage, partnership, joint assets, use of real estate and estate planning.
The legal rules in Thailand differ in some respects significantly from those in Switzerland. Further information on these topics can be found in separate articles on the NomadLaw blog page.
Conclusion
Anyone who, as a Swiss citizen, would like to spend retirement in Thailand should properly prepare the move before deregistration. Particularly important are AHV, pension fund, pillar 3a, health insurance, taxes, banking relationships and estate planning.
Many questions are easier to arrange while one is still registered in Switzerland. Early planning helps to avoid financial disadvantages and to enjoy retirement in Thailand with greater security.
This article is for general information only and does not replace individual legal, tax or financial advice.
FAQ
Can Swiss retirees emigrate to Thailand?
Yes. Swiss citizens can generally emigrate to Thailand and spend their retirement there. However, the move from Switzerland should be carefully prepared, especially regarding AHV, pension fund benefits, health insurance, taxes, banking relationships and estate planning.
Can I receive my Swiss AHV pension in Thailand?
Yes. Swiss citizens can generally receive their Swiss AHV pension while resident in Thailand. Anyone already receiving an AHV pension and moving to Thailand must report the move, the new address and any changes in bank details or civil status to the competent authority.
Do I have to apply for the AHV pension before emigrating?
Anyone who is not yet retired at the time of emigration but is close to retirement age should apply for the AHV pension in good time. The AHV pension is not paid out automatically.
Are Swiss supplementary benefits paid in Thailand?
No. Supplementary benefits to AHV or IV are not paid out if the person is resident in Thailand. Helplessness allowances and certain cost contributions are also linked to residence in Switzerland.
What happens to my Swiss pension fund if I move to Thailand?
Anyone already receiving a pension fund pension should inform the pension fund of the move, the new address and the bank details. Anyone shortly before retirement must decide whether to take the pension fund assets as a pension, as capital or as a combination.
Can I withdraw my Swiss pension fund as capital?
Yes, depending on the pension fund regulations and the personal situation, a lump-sum withdrawal may be possible. Before deciding, liquidity needs, protection of the spouse, tax consequences, life expectancy and residence in Thailand should be carefully reviewed.
What happens to my pillar 3a if I move to Thailand?
Pillar 3a assets can generally be withdrawn in the event of definitive departure from Switzerland. As a rule, deregistration from Switzerland and proof of the new residence abroad are required.
Will I remain covered by Swiss health insurance after moving to Thailand?
In the event of a definitive move to Thailand, Swiss basic health insurance generally ends. A new health insurance solution should therefore be arranged before deregistration, for example an international or local insurance policy.
Do Swiss retirees in Thailand still have to pay taxes in Switzerland?
Anyone who effectively transfers their centre of life to Thailand is generally only subject to limited tax liability in Switzerland. However, Swiss tax consequences may still arise, for example in relation to real estate in Switzerland, pension benefits, pensions or other income from Swiss sources.
Is there a double taxation agreement between Switzerland and Thailand?
Yes. Switzerland and Thailand have a double taxation agreement. However, it does not automatically solve all tax questions. Each case should be reviewed to determine whether Swiss withholding tax remains due, whether a refund is possible and how Thailand taxes pensions or lump-sum benefits.
Can I keep my Swiss bank account if I live in Thailand?
This depends on the respective bank. If a person is resident in Thailand, Swiss banks may restrict services, charge additional fees or no longer offer certain products. In some cases, the banking relationship may be terminated.
Should I review my estate planning before moving to Thailand?
Yes. Anyone moving permanently to Thailand should review marriage, partnership, joint assets, real estate use and estate planning at an early stage. Thai legal rules differ in some respects significantly from Swiss rules.
