Swiss Private Banking

Private Banking in Switzerland For Foreigners

Swiss private banks have an excellent reputation for confidentiality, and Switzerland itself is a money haven home to a quarter of the world's managed wealth. Bank Secrecy was codified into Swiss law by the 1934 Swiss Banking Act.

Switzerland is an attractive jurisdiction for private banking because of its low taxes and tradition of strict financial privacy. Taxes are fairly high for the Swiss (up to 35%), but wealthy foreigners worth more than U$S2million can negotiate residency while paying very little tax. However, in order to benefit from this deal affluent immigrants cannot work in Switzerland or run a business from there.

Switzerland taxes residents on their worldwide income - the tax rate will depend on which canton (state) you live in. The cantons with the most modest tax rates are Zug, Schwyz, Nidwalden and Zurich.

Swiss Companies & Incorporation

Even if you are not intent on living in Switzerland you can still incorporate. Switzerland is viewed as having one of the most friendly corporate tax rates in Europe, and some of the largest companies in the world use Swiss holding companies.

Swiss Bank Accounts

The famous Swiss bank accounts are extremely elusive. To get a private banking service at a Swiss private bank a balance of around U$S1Million is the minimum. For a high-end wealth management service where bankers take care of investment decisions the figure may be something more like U$S5-10Million. Some Swiss banks will have minimum deposits that are even higher.

Bank Secrecy Law and Swiss Private Banks

Whereas the Swiss traditionally do not view tax evasion as a crime, high profile investigations into Swiss banks have led to the secrecy laws being relaxed where a Swiss private bank has foreign operations. Big global banks like Credit Suisse and UBS have been obliged to hand over client records since they opened US branches. Private Swiss banks with no foreign operations are a better option for those seeking bank secrecy. Further, some banks are now no longer accepting US citizens as clients, deeming them to be overly risky.

Even so, Swiss bank secrecy is not set in stone, and Switzerland's laws can change like any country's. One of the principal advantages of a Capital Conservator private bank account alternative is that your records are kept secret regardless of changes in bank secrecy laws because you hold your account with a Capital Conservator Group trust company. Even if bank secrecy is pierced, your financial identity is shielded by Trust Company Law, which prohibits Capital Conservator from handing over information on its clients.

Savings Tax Directive

Europeans who want to open Swiss bank accounts also face privacy issues from the EU Savings Tax Directive, which was implemented in July 2005. The directive means that if you live in one EU country and hold a savings account in another, your details and the interest you earn on that account will be automatically exchanged with your home country.

Although Switzerland is not part of the EU it still falls under the directive - but with the proviso that banks charge their clients a withholding tax at source, and then pass it on to tax authorities, without revealing who their clients are. Other tax havens that are part of the directive like Liechtenstein, the Channel Islands and BVI handle the tax in a similar manner. From 2011 the withholding tax is set at a steep 35%.

Only individuals pay the savings tax - incorporated companies pay the domestic Swiss tax rate. Capital Conservator accounts do not oblige you to pay any tax on savings interest when you invest through one of the Capital Conservator Group Trust Companies, although it's your responsibility to ensure that you are complying with tax laws at home.

Why not chat to one of our specialist account managers today and arrange a holistic evaluation of your financial position, specifically tailored to let you safely grow your assets? Please call +598 2 6963186, or email marcha_kuypers@capitalconservator.com. Our friendly, helpful staff is standing by to assist you.