Swiss Retirement and Expatriation (Portugal, Spain): Steps and Consequences

1. How to export your pension (AVS and LPP) abroad?

Transferring your retirement rights to an EU/EFTA country follows precise rules dictated by the bilateral agreements between Switzerland and the European Union. In concrete terms, your 1st pillar follows you everywhere, while your 2nd pillar is subject to strict blocking conditions.

The 1st pillar (AVS): a pension that follows you

If you settle in Portugal or Spain, your AVS pension goes with you without condition. You must inform your cantonal compensation fund of your departure, then the Swiss Compensation Office (CSC) in Geneva takes over to pay your pension abroad. In 2026, the AVS pension ranges from CHF 1,225 (minimum) to CHF 2,450 (maximum) per month for a single person: a baseline income that is essential to preserve during the conversion into euros.

The 2nd pillar (LPP): pension or capital

• As a pension: it is paid to you monthly, wherever you reside within the EU/EFTA.
• As capital: if you leave Switzerland permanently for an EU country, you can withdraw the extra-mandatory portion of your LPP. The mandatory portion must, in principle, remain blocked on a vested benefits account in Switzerland until the legal retirement age (65 in 2026, men and women), unless you finance the purchase of your primary residence.

To understand in detail how your capital works and is calculated, see our guide Swiss LPP: simulator, taxation and expert withdrawal, as well as our overview of the Swiss three-pillar retirement system.

2. How is the 2nd pillar withdrawal taxed from abroad?

This is the number one financial point of vigilance for future expats. When you withdraw your LPP capital as a foreign resident, your Swiss pension fund levies a withholding tax even before the funds leave Switzerland.

The Swiss withholding tax

If you are already settled in Spain or Portugal at the time of withdrawal, the withholding tax depends on the canton where the pension institution is headquartered (and not on your former canton of residence). The rates vary significantly: a canton such as Schwyz applies a gentler scale than others, which can represent several thousand francs of difference on a capital of CHF 300,000.

Reclaiming the tax

Thanks to the double taxation treaties (DTTs) signed between Switzerland, Spain and Portugal, you can request a refund of this Swiss withholding tax. The condition: prove that this capital has indeed been declared and taxed with the tax authority of your new country of residence. The process is similar to the one described in our guide on withdrawing the 2nd pillar to buy property abroad.

3. What taxation for Swiss retirees in Portugal and Spain in 2026?

It is crucial to let go of preconceived ideas: the absolute tax eldorado has become rare. In 2026, the taxation of your Swiss pensions depends on your host country and, above all, on the disappearance of the former favourable regimes.

In Portugal: the end of the RNH status

The former Non-Habitual Resident (RNH) status, which allowed retirees to benefit from a flat 10% tax on their Swiss pensions for 10 years, was abolished at the end of 2023 / beginning of 2024 for new entrants. In 2026, except in specific transitional cases, a retiree settling in Portugal is subject to the standard progressive scale of the Portuguese IRS.

In Spain: progressive scale and wealth tax

Swiss pensions are taxed according to the progressive scale of the Spanish IRPF. In addition, Spain applies a wealth tax (Impuesto sobre el Patrimonio) that varies depending on the autonomous communities: Andalusia or Valencia have their own allowances. This requires a careful declaration of your retained Swiss accounts and real estate.

4. Should you keep LAMal when settling in the EU?

A Swiss retiree who settles in an EU country (Spain, Portugal) and who receives exclusively a Swiss pension remains subject to the obligation to be insured in Switzerland (LAMal). This is a direct consequence of the European social security coordination rules.

The right of option

Spain and Portugal do, however, grant a right of option. You can apply to be exempted from LAMal in order to join the local healthcare system (Seguridad Social in Spain, SNS in Portugal). This choice must be made within 3 months of settling in and is irrevocable.

The S1 form

If you keep your Swiss LAMal, you must request the European S1 form from your health insurer. Submitted to the Spanish or Portuguese health authorities, it allows you to receive care on site under the same conditions as local insured persons, with the bill being settled in the background by Switzerland. The detailed operation of the S1 is described in our guide What does LAMal cover abroad (S1 form).

5. How to receive your pensions in euros without losing money?

Expatriating with a Swiss pension means receiving income in Swiss francs (CHF) while living in a euro economy (EUR). This is where the financial losses can be massive if you use the traditional banking channel.

• The monthly pension: if you have your AVS (e.g. CHF 2,000) and your LPP pension (e.g. CHF 1,500) transferred to a Spanish or Portuguese account, the receiving bank applies a marked-up exchange rate and international SWIFT transfer fees, every month, for life.
• The transfer of the LPP capital: repatriating a pension capital of CHF 300,000 via the traditional banking channel can cost you thousands of francs in hidden exchange margins.

The same logic applies to the one-off transfer of your LPP capital: routing the funds through a currency specialist like ibani rather than letting a receiving bank apply its counter rate can save the equivalent of several months of retirement.