Open a bank account in Switzerland - BankIntroductions.com

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OPEN A BANK ACCOUNT
IN
SWITZERLAND

SWITZERLAND
BI.C does not support tax evasion. What you file for taxes in your home country is up to you, not BI.C. It is your responsibility to comply with your own specific country laws. BI.C does not support any illegal activity and we do not wish to refer any clients who are involved with any illegal activities of any kind. BI.C are not tax consultants, but we are an independent research firm and bank introductions company. Our goal is to help guide you to safe banks and diversify your wealth within sound banking regions.

Today, Switzerland is considered a safe money haven as the Swiss financial sector is now the seventh largest banking centre in the world as measured by banks’ external assets. This country is a magnet for international money as it beholds a long tradition of stability that is reflected in a sound banking system and currency. The Swiss franc is considered one of the world’s premiere currencies as it is backed by a large percentage of gold reserves relative to other advanced rich nations. With a population of approximately 7.5 million of which 1.57 million are foreigners, this very mountainous and scenic nation is home to many of the world’s wealthiest citizens and their bank accounts.

Zurich is the international finance and banking centre of Switzerland as well providing to be a major trade centre for gold along with the Zurich Stock Exchange considered to be one of the most important in all of Europe. Majority language is German and Swiss-German with French and Italian also spoken. Geneva is the largest city in the French speaking part of Switzerland. Geneva is also home to the World Trade Organization, World Health Organization, International Committee of the Red Cross, etc. The community of Davos holds the World Economic Forum.

The Swiss enjoy a very high standard of living as the economy is well managed. Switzerland has little in terms of economic natural resources, but the economy is sound and wealthy. Some of these major industries include machines, chemical products, pharmaceuticals, watches, banking & insurance, defense – military supplier, chocolates, tourism, etc. Well known Swiss corporations include Nestle`, Oerlikon-Buhrle Group and Credit Suisse.

Politically, the country is very stable with efficient and responsible government. The country achieved independence in year 1291 with the founding of the Swiss Confederation. Last war Switzerland fought was in the 15th century, foreign policy and history of neutrality. The country is made up of 26 Cantons each with their own powers for taxation, this decentralized direct democracy has helped keep Switzerland a stable country thus sustaining its multi-cultural and multi-lingual character.

The aura with Switzerland is in large part derived from the philosophy of strictly limited government that is also reflected in the way the Swiss conduct their lives. For example, the right to privacy in one’s financial affairs has long been a mainstay of Swiss freedom. Naturally, foreigners who wish to partake of this right in Switzerland are not excluded, provided they observe the law.

The history of the country is rich and powerful. Their banking laws are unique. The act of bank accounts designated with numbers only came about from time in history of Nazi Germany. Several German citizens in the 1930’s were executed for having Swiss bank accounts. Since then, no longer could just anyone walk into a bank and ask for an account holder’s name. If you wish, you can open a numbered bank account as they remain available for individuals and corporations. Numbered accounts help to better maintain and protect the financial privacy of the client. Names of the customer are not shown anywhere on bank statements but rather a number and/or code name for convenience will be attached. A copy of valid identification is also required for each signer of the account. Numbered accounts are treated just like name accounts under Swiss banking rules.

The attraction of Swiss Banking is enhanced from the landmark Swiss Banking Law in 1934 which codified the Swiss custom of banking secrecy into law. Basic position in Swiss civil law is that the information concerning a customer and the customer’s financial dealings is protected as part of the individual’s legal right to privacy. Banking law makes it a criminal offence in Switzerland for a banker to divulge information about a customer in violation of the law. The right of secrecy is a right belonging to the customer, not the bank. It is the customer’s privacy that is protected by law.

Swiss bank secrecy will cover most normal uses for a foreign bank account. Swiss law does not consider administrative offences such as tax evasion outside of Switzerland as a criminal offence, and bank secrecy will remain. However, Swiss laws allow the banking secret to be broken if it is proven that a given bank account or person is connected to a criminal offence and/or convicted of a crime such as money laundering, etc. The Swiss have some of the toughest money laundering laws within Europe and the world. Swiss law punishes with prison bankers who reveal details about their customers. Bank employees have to sign the secrecy portion of the banking act as a condition of employment. Swiss financial privacy is the pillar of their finance industry.

Of interest, in September 2007, Swiss authorities froze $1.4 billion USD equivalent of former prime minister of Thailand, Mr. Thaksin. There is no tax treaty between Switzerland and Thailand, one has to be aware of bank privacy risks. If financial privacy is high on your list, it is recommended not to open a bank account with a Swiss bank that has branch offices in your home country.

Swiss banks are considered among the safest in the world. Switzerland’s commercial banks have the highest equity to asset ratios of any large banks in the world. Further, they have capital and disclosed reserves that amount to well over 5 percent of the total amount that they have lent. That is, Swiss banks maintain a very high ratio of deposits to cash or gold reserves compared to any other country banking system. Swiss banks have very conservative balance sheets, they are well capitalized and bankruptcy among Swiss banks is very rare. Swiss banks have earned a reputation around the world for providing sophisticated and discreet banking services. There are 350 private banks (year 2006) with the trend towards further mergers and acquisitions. In addition, there are two large multi-national Swiss banks: UBS and Credit Suisse. UBS has the largest share of the private client market compared to any other bank or financial institution in the world with $1.3 trillion USD equivalent under management.

Swiss private banks are those banks that are not incorporated but rather rely on the assets of the partners involved to meet the liabilities of the bank. Quite simply, a bank introduction is usually required to invest with these smaller prestigious banks. It is difficult to walk in out of the blue and become a client. Swiss private banks tend to be focused on portfolio management services for wealthy individuals.

As in most of continental Europe, individuals usually buy and sell stocks & bonds through their banks. Swiss banks have had a long reputation for managing investment portfolios for their clients while providing other services such as estate planning, wealth management and trust company formation to name just a few. Swiss bankers offer online banking, credit cards, annuities and gold accounts. Gold accounts are very popular. Holding gold in Switzerland is very safe alternative to store your wealth. Gold is a hedge against changes in the world monetary system and foreign exchange risks.

Swiss banks are also at the leading edge of technology, and yes, they have Internet banking thus allowing you to monitor your banking activities from another country. Swiss bankers are there to serve you, they are world renown for providing first class service to their clients. For example, if you buy securities, it is done in the street name, never in the customer’s name – they take every precaution to protect your privacy. Swiss bankers are very competent and reliable, bank safety is considered very high, privacy & safety are paramount. Banking system stability is the backbone of Swiss prosperity. There is accordingly a record for company formations underway in Switzerland. Several cantons are very tax competitive including the Canton of Obwalden which slashed tax rates to 1% for those earning more than 300,000 CHF per year.

The Swiss franc (CHF) is a currency that should be part of everyone’s portfolio as it is backed by $70.48 billion USD equivalent (September 2007) in reserve assets by the Swiss National Bank. It is true that the Swiss authorities have sold 1300 tonnes of their gold bullion reserves from year 2000-05 leaving a net position of 1300 tonnes (2600 tonnes before gold sales). The authorities are rebalancing their portfolio with higher gold prices today ($800 USD/ounce range) compared to year 2000 when gold traded in the vicinity of only $250 USD/ounce. Even after the Swiss gold sales, there are 31.81 billion CHF (July 2007) in gold backing the Swiss franc which is very high considering the size of the float of the CHF currency. Food for thought, Canada has no gold backing the Canadian dollar, the Central Bank of Canada sold all of their gold as many other central banks have also been sellers.

The current exchange has one Swiss franc (CHF) equal to approximately 90 US cents (November 2007). For further detailed background information on the Swiss franc, please read the write-up on ‘SWITZERLAND’ listed in the currency index of this BankINTRO.com web site. Swiss bank accounts can be opened in any major currency (ie. euro, US-dollar, Swiss franc, UK pound sterling) as Switzerland has a multi-currency banking system unlike the United States for example where one can only open an account in US-dollars (USD). The Swiss franc has had a reputation of historical stability of which it remains although exchange valuation is expensive as measured by relative purchasing power parity. The stable Swiss franc is reflected in relatively low interest rates that are paid on bank account balances.

Although not a member of the European Union ‘EU”, Switzerland does abide by the ‘European Union withholding tax’ implemented in 2005 in order to safeguard their Swiss banking privacy that they rely on for prosperity. Tax is deducted from interest earned by European Union residents, the Swiss hold the tax at source and is accordingly passed on to the EU country of residence. The Swiss government does follow the European directive by deducting a 15% withholding tax on the interest from all bank accounts, regardless of currency. The withholding tax directive follows the following tax collection parameters, from July 1, 2005 onwards set at a tax of 15%, from July 1, 2008 onwards at 20%, from July 1, 2011 onwards at 35%. One idea is to consider Swiss money market funds as they maybe a smart move in order to avoid paying this withholding tax. There is no capital gains tax in Switzerland. No exchange controls presently exist.

WHAT’S REQUIRED TO OPEN A BANK ACCOUNT IN SWITZERLAND?

The majority of Swiss banks tend to be small in size with no multi-national presence or a branch network scattered throughout Switzerland for that matter. Many Swiss banks are family held and managed institutions. Several of these private banks are relatively small in size as one will need a bank introduction as they quite often cater to the super rich. Minimum deposits in order to establish an account with an elite private Swiss bank are in the area of $500,000 USD to $2.5 million USD coupled with personal recommendations/bank introductions. Swiss commercial banks are more middle of the road, they service all types of clients and they are multi-national. Minimum deposit amount usually required for a Swiss bank account for non-residents are 50,000 CHF equivalent to $45,000 USD (approximate figures – November 2007). Those foreigners who want extra discretion and money management services (managed accounts are popular) should have a net wealth in excess of $1 million USD and plan to deposit a minimum of $100,000 USD with a Swiss commercial bank.

Switzerland is the world’s premiere money haven and international banking centre as the Swiss banking system is home to approximately one third of the world’s offshore assets. To open an account, verify precisely who you are, where exactly does your money come from, that is, is it from legal verified sources, and where you presently live. The bankers will ask for two photocopies of your passport, the authentication of your signature and you will be required to sign several documents, fill in applications, etc. Swiss bankers generally need to meet in person, follow proper customer identification procedures in order to open a bank account. Therefore, unless the Swiss bank that you are interested in has representative branch offices in your home country or nearby, you may wish to plan to take a ski vacation! If you are very wealthy, Swiss banks may send a bank representative to meet with you in person to open a banking relationship. Swiss bankers wish to develop a long term relationship, they want to get to know their customers very well ‘know your client’ rule.

FOR SWISS BANKING, BankINTRO.com RECOMMENDS:

UBS

UBS is currently the largest Swiss bank in Switzerland headquartered in Zurich and Basel with branch office operations in over 50 countries. UBS has garnered a world recognized reputation as one of the elite global financial services companies providing banking and other financial services to a diverse client base. Banking products and services include traditional retail banking to sophisticated secure Internet UBS e-banking to a wide array of sophisticated wealth management services. Today, UBS ranks right up there as one of the largest asset managers in the world and at the leading edge of banking technology. For non-Swiss residents, minimum accounts are available in the area of 50,000 CHF.

For more information:

CREDIT SUISSE

Along with UBS, Credit Suisse is the other half of the two large commercial Swiss banks headquartered in Zurich since company formation in year 1856. The Credit Suisse name is well known throughout the world as it presently has extensive branch banking operations in over 50 countries employing 47,000 people. Banking assets are in excess of $1.37 trillion CHF (September 2007) coupled with the banks sound credit ratings and solid financial statements. Credit Suisse provides global banking services that include a wide array of banking services including private banking, life & pensions, corporate & retail banking and insurance along with the banks investment banking arm that operate under the division of Credit Suisse First Boston. For foreigners and non-residents of Switzerland, minimum accounts are in the area of 50,000 CHF.

For more details:

BANK VONTOBEL AG

Headquartered in Zurich, Bank Vontobel has banking operations in 11 countries including offices in the Cayman Islands, United States, Canada and several European locations. Bank Vontobel is an asset management firm as core financial services include private banking, investment banking, institutional asset management and investment funds. Unlike the big two commercial Swiss banks that offer a diverse range of services including mortgages, credit cards, bank accounts, etc., Bank Vontobel AG is strictly into money management – so you will have no luck seeking a Swiss credit card with this bank. Bank Vontobel is an old family Swiss bank that was formed in 1936 when Jakob Vontobel took over control of the stock brokerage Haeberli & Cie and renamed the company to Bank J. Vontobel & Co. reigning in banking and financial management services. If you are at all interested, minimum account deposits are steeper in the 250,000 CHF range.

For more information:

ROTHSCHILD BANK AG

For over two centuries and seven generations, the Rothschild family has been an integral part of banking within Europe. Rothschild Bank established banking operations in Zurich in 1968. International Rothschild branch offices include locations in Guernsey, Frankfurt, Hong Kong, Singapore, London, Sydney, Moscow, Geneva, etc. to name just a few. Banking services provided are diverse such as private banking, asset wealth management, financial planning arrangements including trust services & other financial structures, etc. Banking at Rothschild Bank AG is catered truly to the wealthy as minimum deposit of 1,000,000 CHF is the general ballpark figure.

For further information:

JULIUS BAER

Julius Baer is a Swiss global private bank with offices scattered amongst 15 countries worldwide. They are a larger Swiss private bank with 3800 employees, Julius Baer is dedicated to asset wealth management with a portfolio of approximately $406 billion CHF (2007).

For further information:

EFG International

EFG International is the Swiss private banking arm of EFG Group which is headquartered in Geneva. EFG International is based out of Zurich, they are Switzerland’s largest private bank with offices in several major cities around the world. Please visit their website for further details..

For further information:

MIRABAUD & CIE

One of the oldest Swiss private banks specializing in wealth and asset management. Mirabaud & Cie based in Geneva, Switzerland is currently in expansion mode outside their native Switzerland, they have recently been granted approval from the Dubai International Finance Centre to open up an office in Dubai, U.A.E. Mirabaud & Cie has approximately 25 billion CHF in assets under management with 450 employees. Attached is the link to their website to obtain further details.

For further information: www.mirabaud.com

MICHELOUD & CIE

Another helpful web site dedicated to providing Swiss bank introductions for the global wealthy and other related personal and financial services, please visit Micheloud & Cie based out of Lausanne, Switzerland.

Additional information:

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