Moving To Switzerland. Best Offshore Company To Open or Structure to use?

[Velar]

Hi Offshore Corp Talk members.

So in the next few years, I'll be moving to Switzerland and become a resident (by marrying my partner). I want to know what's the best way to go about opening an offshore business once I move.

I'm wondering:

1. Would it be a good idea to set up an offshore company and pay myself a salary (/income) from it? Then pay personal income tax in Switzerland?
2. Is it legal to operate an offshore business outside of Switzerland and be paid from it? - I don't want to start a Swiss business (too expensive/complex).
3. Is there a structure that would be legal and reduce my headache that you can think of?

Basically, I want to avoid the complexity of starting a Swiss business, but remain 100% legally compliant on the tax side of things.

I appreciate your responses in advance!

 

[CaptK]

Allow me to politely challenge you on the CFC adoption by Switzerland:
https://taxsummaries.pwc.com/Switzerland/Corporate/Group-taxation

I make you right with regards to CFC but basically the Swiss tax you the same regardless.
Branch office could be a way to minimise but whatever structure you choose must be set up before you move there. Therefore circumstances brought you to Switzerland.

 

[Helioscope]

I make you right with regards to CFC but basically the Swiss tax you the same regardless.
Branch office could be a way to minimise but whatever structure you choose must be set up before you move there. Therefore circumstances brought you to Switzerland.

Agree, in Switzerland you need to declare
a) sources of income (which will be taxed at rate x),
b) capital assets at home and abroad (which will be taxed at a rate much lower than x, in the range of 0.1%-0.3%)
c) "virtual" income on owned and used real estate ("Eigenmietwert"), essentially, the rent you don't have to pay because you live in your own home, will be accounted for as income (Swiss "specialty" to disicentivize real estate ownership and safeguard real estate business of banks and insurances)

With respect to b), there is no "in-country" CRS, so you can hide money in a Swiss bank account, the banks won't snitch on you. But the taxman will retroactively tax you for 10 years and make you pay some fine on top, once you want to bring them in the clear. You have in your lifetime only one time you can do such an asset emersion exercise. After that, you will be treated worse by the taxman and the judge.

Source: First-hand experience.

 

[Silvio]

Agree, in Switzerland you need to declare
a) sources of income (which will be taxed at rate x),
b) capital assets at home and abroad (which will be taxed at a rate much lower than x, in the range of 0.1%-0.3%)
c) "virtual" income on owned and used real estate ("Eigenmietwert"), essentially, the rent you don't have to pay because you live in your own home, will be accounted for as income (Swiss "specialty" to disicentivize real estate ownership and safeguard real estate business of banks and insurances)

With respect to b), there is no "in-country" CRS, so you can hide money in a Swiss bank account, the banks won't snitch on you. But the taxman will retroactively tax you for 10 years and make you pay some fine on top, once you want to bring them in the clear. You have in your lifetime only one time you can do such an asset emersion exercise. After that, you will be treated worse by the taxman and the judge.

Source: First-hand experience.

Sounds awful. Why would anybody willingly do that instead of just moving to a lot more lax countries? Apart from feeling of "safety" in Switzerland.

 

[JackAlabama]

Agree, in Switzerland you need to declare
a) sources of income (which will be taxed at rate x),
b) capital assets at home and abroad (which will be taxed at a rate much lower than x, in the range of 0.1%-0.3%)
c) "virtual" income on owned and used real estate ("Eigenmietwert"), essentially, the rent you don't have to pay because you live in your own home, will be accounted for as income (Swiss "specialty" to disicentivize real estate ownership and safeguard real estate business of banks and insurances)

With respect to b), there is no "in-country" CRS, so you can hide money in a Swiss bank account, the banks won't snitch on you. But the taxman will retroactively tax you for 10 years and make you pay some fine on top, once you want to bring them in the clear. You have in your lifetime only one time you can do such an asset emersion exercise. After that, you will be treated worse by the taxman and the judge.

Source: First-hand experience.

if you have no a), b) can become your a) and that can become very expensive I have been told.

Sounds awful. Why would anybody willingly do that instead of just moving to a lot more lax countries? Apart from feeling of "safety" in Switzerland.

Agreed. And the weather sucks most of the year as well.

 

[Helioscope]

Sounds awful. Why would anybody willingly do that instead of just moving to a lot more lax countries? Apart from feeling of "safety" in Switzerland.

Among Europe, income tax ratios (and taxes in general) are rather low, and you can easily stike deals with local fiscal authorities, as there is an open fiscal competition between cantons and even municipalities. Locations like Wollerau or Schindellegi are well-known to easily cater with low flat-rate taxes for rich people, to keep them in their territory.
In comparison, another example I know, in Italy the fiscal load is much higher, however you still have the option of not declaring a dime, as the administration is inefficient and/or corrupt and you may easily get away, as long as you don't get too close to an ambitious Guardia di Finanza officer.

if you have no a), b) can become your a) and that can become very expensive I have been told.

Depends on how much you consume from b), I guess. I'd need to ask my local tax office friend...

Agreed. And the weather sucks most of the year as well.

Don't live too close to the Alps, or you'll get definitely some rain. The Lake of Konstanz region has an almost mediterranean climate on the other hand.

 

[Davis123]

Agree, in Switzerland you need to declare
a) sources of income (which will be taxed at rate x),
b) capital assets at home and abroad (which will be taxed at a rate much lower than x, in the range of 0.1%-0.3%)
c) "virtual" income on owned and used real estate ("Eigenmietwert"), essentially, the rent you don't have to pay because you live in your own home, will be accounted for as income (Swiss "specialty" to disicentivize real estate ownership and safeguard real estate business of banks and insurances)

With respect to b), there is no "in-country" CRS, so you can hide money in a Swiss bank account, the banks won't snitch on you. But the taxman will retroactively tax you for 10 years and make you pay some fine on top, once you want to bring them in the clear. You have in your lifetime only one time you can do such an asset emersion exercise. After that, you will be treated worse by the taxman and the judge.

Source: First-hand experience.

If you have a personal account in Swiss bank would that still be taxed especially if you are non Swiss and living in another country ?

 

[Helioscope]

If you have a personal account in Swiss bank would that still be taxed especially if you are non Swiss and living in another country ?

Let me break down your question:
If you are non-Swiss, you will face CRS issues.
If you live in another country, to be honest, I cannot give a definitive answer yet. Let me ask around if that poses any challenges in terms of opening and/or maintaining an account.

 

[no1d]

Great info here.

I wonder, EU citizens can open a bank account is Swiss for cashing out offshore dividends?

 

[Helioscope]

@Davis123
@no1d
I had a chat today with my Relationship Manager at PostFinance, one of the major retail banking organisations in Switzerland.
It is possible to open an account with them if your are a non-Swiss citizen living outside of Switzerland, but they will whip you through their KYC process (posing testicle-damaging questions such as origin of money, justification for bank account in Switzerland, and similar customer-friendly questions).
For a citizen of a neighbouring country in Switzerland, she mentioned that the degree of testicle damage caused by their KYC is not too bad, however, she was not able to exactly describe it, as this circus is run by the compliance officers. On the other hand, if friendly people like @Admin sitting in warm Belize or other cozy countries want to have a PostFinance account, the PITA levels will probably reach DEFCON 1 (sorry Admin ).

 

[Davis123]

@Davis123
@no1d
I had a chat today with my Relationship Manager at PostFinance, one of the major retail banking organisations in Switzerland.
It is possible to open an account with them if your are a non-Swiss citizen living outside of Switzerland, but they will whip you through their KYC process (posing testicle-damaging questions such as origin of money, justification for bank account in Switzerland, and similar customer-friendly questions).
For a citizen of a neighbouring country in Switzerland, she mentioned that the degree of testicle damage caused by their KYC is not too bad, however, she was not able to exactly describe it, as this circus is run by the compliance officers. On the other hand, if friendly people like @Admin sitting in warm Belize or other cozy countries want to have a PostFinance account, the PITA levels will probably reach DEFCON 1 (sorry Admin ).

Oh yes dealing with compliance is absolutely a nightmare these days in any country outside your country of residence. Globalists are making sure since FATCA/CRS that you don't run away and live in any other country.

 

[JackAlabama]

@Davis123
@no1d
I had a chat today with my Relationship Manager at PostFinance, one of the major retail banking organisations in Switzerland.
It is possible to open an account with them if your are a non-Swiss citizen living outside of Switzerland, but they will whip you through their KYC process (posing testicle-damaging questions such as origin of money, justification for bank account in Switzerland, and similar customer-friendly questions).
For a citizen of a neighbouring country in Switzerland, she mentioned that the degree of testicle damage caused by their KYC is not too bad, however, she was not able to exactly describe it, as this circus is run by the compliance officers. On the other hand, if friendly people like @Admin sitting in warm Belize or other cozy countries want to have a PostFinance account, the PITA levels will probably reach DEFCON 1 (sorry Admin ).

I would not pick this bank. It is not up to date to deal with foreigners.
Smaller regional banks can be more open to even Belize if you have clean funds and a larger deposit they can rape with fees and negative interest rate. You can get introductions to these by local lawyers or fiduciaries.

 

[Helioscope]

I would not pick this bank. It is not up to date to deal with foreigners.
Smaller regional banks can be more open to even Belize if you have clean funds and a larger deposit they can rape with fees and negative interest rate. You can get introductions to these by local lawyers or fiduciaries.

Agree - it was just to mention the first available source I could probe for such information, as an example for "big, rigid, risk-averse".
Zürcher Kantonalbank also rapes you with 300 CHF monthly fees and the usual KYC whipping, and yes, small regional banks are much more eager for business and may be more elastic in certain aspects.

 

[JackAlabama]

Agree - it was just to mention the first available source I could probe for such information, as an example for "big, rigid, risk-averse".
Zürcher Kantonalbank also rapes you with 300 CHF monthly fees and the usual KYC whipping, and yes, small regional banks are much more eager for business and may be more elastic in certain aspects.

Forget this bank. If they even smell crypto, you get the booth.