Swiss Bank Account
Switzerland, and Swiss bank accounts are famous for their secrecy. The Swiss bank secrecy act of 1934 and the country's "tax haven" status vaulted Switzerland to one of the most sought after "offshore" havens in the world. Although Switzerland is obviously landlocked, it's world-famous bank secrecy and the storied Swiss numbered bank accounts, made it one of the powerhouses in the private banking world and one of the premiere offshore financial centres in the 20th century.
Unfortunately, as the 21st century unfolds, Switzerland is finding itself in the cross-hairs of international pressures to eliminate or vastly weaken the very bank secrecy laws that made it draw in international banking circles.
The Swiss continue to evolve their bank accounts and banking practices, and as yet, it is unclear for how long or how well they be able to withstand the pressure of tax collectors from high tax regimes the world over. Detailed below are some of the disadvantages to opening a Swiss bank account:
Swiss bank accounts aren't "secret" anymore. Swiss banking giant UBS had Executives operating out of the headquarters of Swiss banking giant UBS were indicted by the US for assisting 17,000 non-resident account holders, high net worth US citizens, avoid taxes. In addition, it has been alleged that the US treasury department has been clandestinely tracking financial transactions between Swiss financial institutions. Using tools designed to combat terrorism, they have apparently tapped into 'remotegate', a system used for international financial transaction clearances.
Switzerland is part of the EU Savings Tax Directive. Why is this important? If you are a citizen of the European Union, and you hold open Swiss offshore bank account, the Swiss government will levy a 35% tax on interest you earn, or alternatively disclose your account details to your country's tax authorities.
Swiss banks, in spite of having a reputation for conservatisms, are incredibly over levered. In fact, their cash reserves are in many cases much lower than those of comparable sized US banks. So far, the surviving US banking institutions have been able to "muddle through" with financial assistance of their government and US bank account deposit insurance has been sufficient to escape losses by those depositors within the stated insurance limits. The relative size of the Swiss banking industry to the size of Switzerland's economy means that a similar government sponsored bailout may have considerably more difficulty in getting accomplished in Switzerland.
A Swiss bank account can be expensive. Minimum deposits for private banking services are usually 500,000 USD and up. And, the fees necessary to maintain such an account means that an account with less than one million USD doesn't make much sense. In addition, traditional banking services such as bank wire transfers, stock investment, currency conversions or currency trading, & gold, silver or metals investments are also quite expensive.
You can get a numbered bank accounts, however, in order to do so you are required to show up and identify yourself in person in Switzerland. At that point, the bank still has your name and details, and your details will be given to the authorities if you are pursued.
For these reasons, a little of the shine is coming off the Swiss banks, and some depositors are moving their money to cheaper, more confidential banks and countries with stronger bank secrecy laws.
It is however still possible to open a tax-neutral offshore bank account that will protect your privacy. However, some of the less well-known offshore havens are starting to replace Switzerland as good locations for opening accounts that will continue to protect your privacy.