For decades, Switzerland has been the gold standard for offshore banking and asset protection. Although movies and books often portray Swiss banks as offshore havens for tax evaders, that’s not exactly true. In fact, the laws regarding Swiss banks have changed dramatically in the last decade. However, opening a Swiss bank account could be an excellent solution if you’re considering offshore banking to help protect your assets.
In this post, Blake Harris Law discusses the Swiss banking sector, including its history, basic information, the benefits of offshore banking, how to open an account as a foreigner, and all the essential details you need to know.
At our firm, we help clients all over the United States with effective asset management and protection, including offshore banking and trusts. Are you interested in learning more? Read on as we explain the fundamentals of the Swiss banking system and how you can use it to protect your assets.
A Brief History of Swiss Banks
The reputation of Swiss banks’ secrecy stretches back more than three centuries. In 1713, the Great Council of Geneva established a federal act requiring bankers to maintain a register of all their clients. It also forbade them from discussing that information with anyone other than the client. The only exception was if the City Council agreed that a significant need existed for the bankers to share the information.
Right before the Second World War, Switzerland signed the Banking Act of 1934, which made it a crime for any Swiss bankers to disclose the identity of their customers to any foreign government. During this time, Swiss law enabled strict bank secrecy, leading many people to open foreign accounts for tax evasion purposes.
However, since the Swiss Bank Wegelin & Co. pleaded guilty in 2013 to dining tax dodgers from the U.S., the Swiss government now requires the country’s banking system to disclose bank account details on U.S. account holders.
In 2010, the U.S. Congress enacted the Foreign Account Compliance Act, which requires major banks around the world to report account information on U.S. clients to the government. However, Swiss law has maintained and even strengthened (in 2015) its 1934 banking secrecy law.
One notable recent scandal has been the February 2022 leak of information, dubbed “Suisse Secrets,” from more than 18,000 Credit Suisse bank accounts that a whistleblower leaked to the Munich newspaper Süddeutsche Zeitung, which launched a global journalistic investigation.
So no longer are banks in Switzerland necessarily a place where secret accounts can be guaranteed to wealthy clients who want to avoid paying taxes. However, that doesn’t mean Swiss bank accounts don’t provide superior asset protection benefits for foreign clients.
Do Swiss Banks Disclose Information to Tax Authorities?
The first question people ask about offshore banking in European countries like Switzerland is always regarding secrecy laws. So, do most Swiss banks share information with foreign tax authorities? Well, it depends on the country of residence of the account holder. However, the Swiss Bankers Association has made the automatic exchange of information a commonplace regulation, essentially ending the era of Swiss banking secrecy for foreign customers.
Here is a summary of Swiss banking law regarding secrecy and disclosure of banking information for foreigners with Swiss bank accounts who are not tax residents:
For bank clients residing in a country that follows the automatic exchange of information agreement, Swiss banks will disclose details regarding the holders’ money and bank accounts to the Swiss Federal Tax Administration (SFTA). Then, the SFTA will submit the banking information to the tax authority in the country where the account holder is a legal tax resident.
Are There Exceptions to the Swiss Banking Secrecy Laws?
Yes, several exceptions do exist to the banking secrecy laws in Switzerland, including:
- When banks suspect a client is participating in money laundering
- When creditors seize assets and money to pay off debts, banks will relay information about the account holder’s available funds and balances
- When the Swiss court requires a bank to disclose a customer’s information to provide proof of wrongdoing as it relates to a case
The Benefits of Swiss Banking Services
Opening an account with a financial institution like Credit Suisse or Swiss National Bank (the central bank in Switzerland) can provide many benefits for foreigners, even if the country’s banking secrecy laws aren’t as bulletproof as they once were. For entrepreneurs, companies, wealthy individuals, and new businesses, private banking in Switzerland is an excellent strategy to protect their money and growing assets.
Consider these benefits of opening a Swiss bank account:
Identity Protection
Swiss bankers cannot disclose information about their clients without clear evidence of wrongdoing or strong legal reasons (like evidence of tax evasion or money laundering). Therefore, foreign banking clients have a much better chance of remaining anonymous and private than they would by opening a bank account in the U.S.
The Swiss Economy Is Strong
The Swiss Franc is one of the strongest forms of currency in the world, contributing to the financial stability of the country’s national economy. Furthermore, the Franc has almost no inflation and a 40% backing of gold reserves. As such, it entices many foreigners from both established and developing countries who want a stable place to grow their wealth.
Financial Protection
In terms of asset protection, Swiss bank accounts provide unparalleled advantages. Unlike many other big banks in the European Union and around the world, the Swiss require all accounts to have full insurance. Therefore, your money has comprehensive protection from events like tornadoes, fires, floods, etc. Should they occur, you would receive complete compensation for your missing assets.
How Can You Open a Swiss Bank Account?
Opening a bank account in Switzerland as a foreigner is a complex process. It requires more than just signing a legal form and depositing money. In fact, many foreign applicants are unsuccessful in their efforts.
First, you’ll have to decide which bank you want to use, like Credit Suisse, UBS Group, Alternative Bank Switzerland, etc., and then request an application package.
You’ll also need a lot of official documentation, including:
- Identity verification
- Income sources
- Address confirmation
- Valid passport
Next, the Swiss will want to perform a background check to determine your eligibility and verify if you have any criminal charges or convictions.
Finally, many Swiss banks have minimum balance requirements. For example, most require clients to deposit at least $9,000 within a month of opening an account, although it varies. UBS Group requires a minimum of five million!
Of course, there is no guarantee that the Swiss banks will approve your application to open an account. However, your chances of protecting your wealth through offshore banking are much higher with help from an experienced asset protection attorney like our team at Blake Harris Law. Our passion is helping families just like yours protect their wealth and ensure a stable financial future.
Trust Your Assets to Blake Harris Law
At Blake Harris Law, our services exclusively relate to asset protection and management, including offshore banking and estate planning. We help families nationwide protect their assets to ensure a future of financial wellness and stability.
If you’re considering opening a Swiss bank account, we will help you navigate the process from start to finish. Call us at Blake Harris Law today at (833) ASK-BLAKE and schedule your consultation with an asset protection lawyer.
Swiss Banking FAQs
What are the benefits of having a Swiss bank account?
- Privacy and Confidentiality: Swiss banks are known for their strict privacy laws, offering a high level of confidentiality.
- Financial Stability: Switzerland has a strong and stable economy, providing a safe place to hold assets.
- Asset Protection: Swiss accounts offer robust asset protection against potential political or economic instability in other countries.
- Currency Diversification: Accounts are available in multiple currencies, allowing for diversification of currency risk.
Is it legal to open a Swiss bank account?
Yes, it is legal for non-residents to open a Swiss bank account. However, account holders must comply with the tax laws of their home country and declare their accounts where required.
What types of accounts can I open with a Swiss bank?
- Personal Accounts: Standard checking and savings accounts for individual use.
- Corporate Accounts: For businesses and corporations, providing services tailored to corporate needs.
- Investment Accounts: Accounts specifically designed for investment purposes, offering a range of investment options.
What are the requirements to open a Swiss bank account?
- Identification: A valid passport or government-issued ID.
- Proof of Address: Utility bill or other documents showing your current address.
- Source of Funds: Documentation proving the origin of the funds to be deposited (e.g., tax returns, business contracts).
- Minimum Deposit: A minimum funding amount of at least USD 500,000 to 750,000 is generally required, depending on the bank and type of account.
- Background Check: Banks may conduct a thorough background check to ensure compliance with anti-money laundering (AML) regulations.
How do I open a Swiss bank account?
- Contact a Swiss Bank: Start by contacting a Swiss bank or a private banker.
- Provide Documentation: Submit the required documents, including ID, proof of address, and source of funds.
- Complete Application: Fill out the application forms, either in person or online.
- Due Diligence: The bank will perform due diligence checks to comply with Swiss regulations.
- Fund the Account: Transfer the required initial deposit to activate the account.
Are Swiss bank accounts completely anonymous?
No, Swiss bank accounts are not completely anonymous. While privacy is a hallmark of Swiss banking, the country has adopted international standards for transparency and cooperation with foreign tax authorities. Banks must disclose account information if requested through proper legal channels.
Can I access my Swiss bank account from abroad?
Yes, most Swiss banks offer online banking, allowing you to manage your account and make transactions from anywhere in the world. You can also access your account through international banking services.
What are the costs associated with a Swiss bank account?
- Account Maintenance Fees: Regular fees for maintaining the account, which can vary depending on the type of account.
- Transaction Fees: Fees for wire transfers, currency conversions, and other transactions.
- Investment Management Fees: If you have an investment account, there may be fees for managing your portfolio.
- Minimum Balance Requirements: Some accounts may require you to maintain a minimum balance, with penalties for falling below that threshold.
- Comparison to U.S. Banks: In general, the fees associated with Swiss bank accounts are comparable to those charged by U.S. banks or brokerage firms.
What happens if I fail to declare my Swiss bank account?
Failing to declare a Swiss bank account can lead to severe legal consequences, including fines and criminal charges, depending on the laws of your home country. Switzerland now participates in the Automatic Exchange of Information (AEOI) with many countries, sharing account information with tax authorities.
Can a Swiss bank account be seized by foreign governments?
While Swiss law provides strong protection against asset seizure, foreign governments can request the freezing or seizure of assets through legal proceedings if there is evidence of criminal activity or tax evasion.
Is it difficult to close a Swiss bank account?
No, closing a Swiss bank account is typically straightforward. You must notify the bank, settle any outstanding fees, and provide instructions for transferring the remaining balance. The process usually takes a few days to complete.
How secure are Swiss banks?
Swiss banks are among the most secure in the world, with stringent regulations and a strong emphasis on stability and risk management. The Swiss banking system is well-capitalized and operates under strict oversight by the Swiss Financial Market Supervisory Authority (FINMA).
Do Swiss banks offer services for U.S. citizens?
Yes, many Swiss banks offer services to U.S. citizens, but they must comply with the Foreign Account Tax Compliance Act (FATCA), which requires them to report U.S. account holders to the IRS. Some banks may have additional requirements or restrictions for U.S. citizens.
Are debit/credit cards available for trust accounts or personal accounts?
Debit/credit cards are generally available for personal accounts, though it depends on the specific bank and account setup. For trust accounts, it’s typically not recommended, although there are some cases where it might be possible. The bank would need to review the individual setup to provide a more accurate answer.
Which banks does Blake Harris Law recommend?
Blake Harris Law recommends several reputable Swiss banks, depending on your specific needs and circumstances. We work closely with banks that have a strong track record of providing excellent service and robust asset protection. For personalized recommendations, please contact us directly.
