All You Need to Know About Swiss Banking
There is a common
misconception that people who cannot store their unaccounted wealth in
their own country open accounts in Swiss banks. Even though this may be
true to an extent, Swiss banks are well known for their sophisticated and
discreet banking services.
Many of the rich and famous
like film stars, business entrepreneurs, top government officials,
presidents, etc, are reputed to have Swiss bank accounts. Then again, it
is also said one need not be a multi-millionaire to open a Swiss bank
account.
Brief Background of the
Swiss Banking System
One of the most prosperous
and economically advanced nations, Switzerland has the world’s largest
gross domestic product (GDP). There are nearly 400 banks in Switzerland,
which range from the “Two Big Banks”, to smaller banks, serving single
communities or selective clients. Considered as the world’s largest
offshore financial center, the Swiss banking sector is renowned for its
privacy, stability and protection of their customer’s information and
assets. The Federal Banking Commission (FBC) regulates these banks.
Opening a Swiss Account
Often freely available, a
Swiss bank account provides total confidentiality, strict privacy, and is
tax-free. However, certain documents are required as proof to open a Swiss
account. For example, people who are not residents of Switzerland need to
furnish their passports, along with a passport size photograph. Depending
on the profession, a current bank statement would be required to determine
the client’s current financial condition. Along with this, certain
personal information, like the date of birth, country of origin, etc., is
also required.
A useful feature of Swiss
banking is that it can also be done via correspondence as long as the
customers follow bank rules and regulations. The bank and customer could
interact through the Internet, telephone or snail mail.
However, a drawback of
Swiss banking is that non-residents are expected to pay a hefty amount as
deposit, and, the smaller accounts are more expensive to maintain. There
is a clause especially for US citizens wherein they are expected to
refrain from making any business transaction through their Swiss accounts,
to keep their account privacy intact.
Deposit
A security deposit is
needed in case the customer wants to obtain a credit card. Approximately
1.5 to 2 times the monthly credit limit is demanded, depending on the bank
the customer chooses. This deposit is returned when the customer decides
to discontinue the credit card, and has paid all outstanding bills.
Confidentiality
There are legends about
mysterious numbered accounts in Swiss banks. Some high security bank
accounts are given pseudonyms or special names instead of issuing them in
the name of the customer, to preserve the anonymity of the customer. This
number or name is used wherever the customer is referred. Moreover, even
bank employees are expected to respect the customer’s privacy, the failure
of which could land them in prison for several months.
However, Swiss banks, being
very particular about preventing money laundering, crosscheck the
authenticity of the information provided by the customer. If, during the
scrutiny, the bank finds the information of a potential or existing
customer connected to some criminal activity, a Swiss judge or prosecutor
issues a lifting order. These investigations could include international
criminal investigation for tax fraud, insider trading, or the infamous
terrorist financing of recent times.
Closing of an Account
Despite a few negative
notions about Swiss banking, closing an account is said to be easier than
expected. No financial penalty is demanded, and neither is the money held
hostage, like it is done in other off shore banking.
To conclude, the secrecy
and discreet nature of Swiss banking makes them convenient and dependable.
This not only helps customers to save money, but also is a viable means of
attaining economic superiority in the business world and society as a
whole.
