But then, with all the governments in the world trying to make everything transparent and kill privacy, Switzerland has also been pressured to reduce its high degree of anonymity and adopt a different approach.
At this point, you probably ask yourself, is a Swiss account still worth it? How have the requirements and benefits changed over time? Here’s what you need to know before considering this option.
Is Switzerland Still a Tax Haven?
Located in the central part of Europe, Switzerland is still considered a tax haven for many, mainly because it has relatively low tax levels when compared to other countries. Privacy is still strong in Switzerland, and an official investigation is required for personal data to be released.While not part of the EU, Switzerland has numerous tax treaties with a series of other countries. The political system has been stable for decades already. Based on all these, the country is ideal for high-net-worth individuals, entrepreneurs and even independent companies.
However, it’s worth noting that Switzerland as a tax haven is an overstated concept. Most wealthy people can afford to work their way out of general taxes. Besides, privacy laws have changed a little over the past decade, with countries like the USA or from the EU putting pressure on Switzerland.
Getting a Swiss account isn’t that difficult and still makes a good option for a series of different reasons:
- Low tax rates when compared to other countries, including countries in the EU.
- The OECD minimum tax rate hasn’t affected the country’s profile, with most companies unaffected.
- Lots of favorable tax treaties with countries like the USA, as well as the EU.
- Strong privacy laws for the wealthy and not only.
- Stable political system that reduces fluctuations.
- Active wealth management network for large corporations and high-net-worth individuals.
Residents Vs. Non-Residents
Like in pretty much any other country out there, residents will find it much easier to get a Swiss account when compared to non-residents.Residents benefit from an easier process, as they only need to bring in a few documents only, such as identification or proof of address. They also benefit from more options to open an account online, without stepping foot into a branch.
Non-residents must bring in more documentation. They also have to bring proof of funds, as well as proof of residence, references or even certificates to prove their residence in another country.
Fees also vary from one Swiss account to another. Residents have access to no fees at all, as well as low maintenance fees. Such accounts are excellent for everyday banking. Non-resident accounts will normally have higher fees.
Moreover, like in other countries, non-residents may have to make initial deposits. They can be as low as $10,000, but they can also exceed $100,000. Such requirements vary from one bank to another.
Residents have access to standard services, loans, investment opportunities, mortgages and others. Non-residents have fewer options. Besides, not all banks accept online applications for non-residents.
Apart from all these restrictions, it’s worth noting that international or online banks can usually make a better choice than traditional banks, since they cater to online users and foreigners. Getting a Swiss account with such a bank is usually easier and more straightforward.
Laws and Regulations
The Federal Act on Banks and Savings Banks covers the laws regulating banking activities and procedures in Switzerland, while the FINMA is the financial market regulator, keeping an eye on all financial institutions.Banking secrecy is a top priority for banks in Switzerland, meaning that disclosing account details to third parties is strictly forbidden. It’s worth noting that Switzerland banks must comply with the AML (Anti Money Laundering) regulations, as well as CFT (Combating Terrorist Financing) laws.
Market or conduct rules are overseen by the FinSA and FinSO. On the same note, the FinMIA and FinMIO regulate the financial infrastructure.
Based on different treaties with other countries, Switzerland may disclose client information to authorities from these countries, but only under very specific circumstances, such as official criminal investigations.
Document Requirements
Opening a Swiss account will inevitably require some documentation.As a resident, you can usually do with proof of identification and address. Basically, you can use a passport or an official ID to prove your identity. As for your proof of address, a bill in your name or a current bank statement are usually enough. They need to be recent though, usually within the last three months.
Non-residents will be asked for more documentation to open offshore account, only because banks need to ensure they follow KYC (Know Your Customer) regulations. Here are a series of other documents you might be asked for:
- Proof of funds. Since many banks ask non-residents to make an initial deposit, you’ll usually need to prove where the money comes from.
- Proof of residence. If you’re a resident in another country, you’ll need to prove it. You’ll usually have to contact tax authorities in your country and obtain this document, which is usually a certificate.
- References. References are usually required from your current bank. You may need to obtain a document that proves your relationship with the respective bank.
Cantons & Rules
Generally speaking, opening a Swiss account in a random canton won’t make much of a difference. All cantons in Switzerland operate based on the banking law mentioned in the Federal Act on Banks and Savings Banks. It’s federal law.Cantons, however, can have their own laws. However, these laws don’t affect how banks operate. Instead, they mainly relate to the establishment of smaller local banks. Therefore, they have nothing to do with federal banking regulations.
Cantonal banks are local banks operating in certain cantons. They operate under cantonal law, but they must also respect federal law. All banks in the country (that includes cantonal banks too) are supervised by the Swiss Financial Market Supervisory Authority.
Taxes, on the other side, do vary from one canton to another. The maximum rate for the federal income rate is set at 11.5%, yet cantons have progressive rates, which add to the federal tax.
