For an American living abroad, life in Switzerland can be good but there can be many challenges. While English may be spoken by some Swiss, it’s important to be aware that there are four national languages spoken throughout Switzerland, not to mention the many cultural differences one needs to learn about.
The Swiss are dedicated to celebrating their cultural heritage and take their seasonal celebrations to heart. Dressing in national costumes during the holidays is important to them and they’ll carefully design and make costumes for these events. Daily food menus will be carefully thought out, and if you’re lucky enough, you’ll be invited to a real Swiss family dinner. Since the Swiss are a diverse people, you’ll also have the chance to experience Swiss life through a variety of different languages, customs, and food dishes.
Shopping in Zurich can be fun and you’ll find many shops that you won’t typically find in the USA. For example, you won’t find your usual humongous shopping malls and will likely do your shopping in a charming city street while having drinks at café’s along the way. And for those with a budget for shopping, there are many designer brand labels to be found here.
A life in Switzerland can be financially rewarding for US expats who choose to work here. It is a great country to raise a family in and many who are dedicated to outdoor activities will find a lot to occupy their time. Many Americans decide to retire here as well. However, there may also be some financial challenges when living in Switzerland.
One challenge for US expats is opening a Swiss bank account. While opening a bank account for an American living in the USA is a simple matter, many Americans may be surprised to find that trying to set up a bank account in Switzerland is far from ordinary. In fact, many Swiss banks don’t wish to do business with Americans, even when they are living in Switzerland.
Many US nationals are increasingly finding that they are being denied banking services. This is a result of Swiss banks trying to be compliant with US tax laws, and are held hostage to these US tax laws, as American-held bank accounts fall under the scrutiny of the IRS.
The USA has a complicated set of requirements for holding a foreign bank account. Failure to comply with these regulations can affect a Swiss bank’s ability to do business in the USA, even though an American may have lived in Switzerland for years. It can cost a Swiss bank a lot of money to be compliant and to report an American expat’s bank account back to the IRS. So many are deciding to close these accounts, or not allowing an American to set one up in the first place.
For a US taxpayer living abroad, whether in Switzerland, or another country, a US citizen may need a us tax accountant to help file taxes each year. Your worldwide income is subject to US tax, no matter where you live. One advantage is that you have two more months to file your taxes, giving you extra time to collect your information and file your taxes in the foreign country where you are residing so you can benefit from the foreign tax credit.
While it can be challenging to overcome these difficulties, it can also be a rewarding and exciting life for an American to live abroad in Switzerland.
Patrick Evans is a US tax accountant (CPA) and offers tax services to fellow US Tax Payers living in Switzerland. He has gone through all the motions of moving to Switzerland. So, if you have any questions about living or banking in Switzerland just get in touch!