Jun 11, 2020

Crude facts about banking in Switzerland

About one third of the world capital is kept in Switzerland. This shows that a great number of people, organizations, and national governments trust Swiss bankers. Offshore Pro Group cooperates closely with several Swiss banks and we would be happy to assist you in setting up a bank account that is going to provide for the maximum achievable level of your financial assets security.

Banking in Switzerland: facts about the country

All national states are suffering from the COVID-19 pandemic that is still raging around the globe. But have you heard much news about the coronavirus-related problems that Switzerland is going through? Probably, not. The country is handling the situation quite successfully.

Switzerland is at the top or near the top of various economic ratings. These include the country’s GDP, the revenue per capita, the quality of life, the human development, and so on and so forth. It would probably be safe to claim that Switzerland is the most stable country in the world.

All national states experience periods of economic hardships from time to time while Switzerland has always been doing fine since the moment when the Swiss Confederation was formed back in the 13th century AD. Ever since its formation, the country has applied the policy of armed neutrality, and it has directly participated in a military conflict only once in its whole history. This happened when Switzerland was dragged into Napoleonic wars.

The adherence to the principles of direct democracy and political neutrality as well as the amalgamation of Germanic and Romance cultures that is found in this landlocked country are probably the main factors that have made Switzerland so successful. It is not a member of the European Union, nor Eurozone, nor European Economic Area. This is not surprising at all, as the Swiss franc is the most stable currency in the world. According to statistics, the franc exchange rate fluctuations have been smaller than those of any other national currency throughout history.

Banking in Switzerland: myths about Swiss banks

Having an account in a Swiss bank is everybody’s dream and this cannot be denied. However, many people think that setting up a bank account in Switzerland is an unattainable goal as the country is only for the super-rich. The following joke was in circulation some time ago: A nouveau riche comes into a Swiss bank and says to the teller “I would like to open an account and put…” he turns to whisper at this moment “three million dollars there”. To this, the teller responds as follows: “You don’t have to whisper, sir! We don’t consider poverty a vice here!”

This joke may be funny but it is not true: you do not have to be a multimillionaire to obtain services from a Swiss bank. Actually, some banks in the country accept initial deposits as small as 5,000 CHF (Swiss francs) while some others require no security deposits at all! Naturally, a High Net Worth Individual (HNWI) will have access to more banking services and opportunities in Switzerland but opening a bank account in the country is quite possible for most people.

Before we go on with the facts about banking in Switzerland, we would like to dispel a few other myths that some people may have about Swiss banks. These myths can keep you from even thinking of opening a bank account in Switzerland while setting one up would be a wise thing to do indeed.

First, you might believe that Swiss banks charge high service fees. This is also a false belief and we can help you set up the type of account that will involve no account maintenance costs at all. Of course, if you would like to make use of some special banking services such as investment opportunities or asset management, it would entail paying some fees but these are rather competitive if you compare them to the bank fees charged in other national states.

Second, the rumor may have it that it is difficult to close the account that you have with a Swiss bank. Again, this is contrary to the truth, as most banks in the country do not have any charges for closing an account nor do they apply any fines. Moreover, the account can be closed very fast. If the bank has made some investments on your behalf, of course, these investment positions need to be liquidated before the account can be closed but it usually takes only a couple of days. Banks in Switzerland do not limit your access to your capital in any way. When you have money in a Swiss bank, you can dispose of it in any way you like.

The third myth that some people may believe is that Swiss banks attract criminals and corrupt government officials who open ‘secret’ accounts there. This cannot be further from the truth once again. First of all, such a thing as a ‘secret bank account’ does not exist any longer. Yes, you can open a numbered account in Switzerland but it will only allow concealing your identity from the teller or some other unauthorized person. The bank managers will definitely know who the account owner is and they are obliged to reveal the identity of the account holder to the authorities in case criminal charges are laid against him or her.

Besides, it is almost impossible for a dishonest person to acquire services from a Swiss bank. All banks in the country conduct strict due diligence checks and if they have doubts about the legality of the sources of funds, they are going to deny service to the applicant without doubt.

The anti-money laundering and anti-terrorism financing policies are promoted very actively by the international financial authorities. Banks in all countries of the world have to abide by very stringent regulations these days and Switzerland is not an exception. What is quite unpleasant about this situation is that sometimes honest and law-abiding people have to face difficulties when setting up foreign bank accounts. Offshore Pro Group specialists know very well what proof of the legality of the origin of funds has to be supplied to the Swiss bank that you are opening an account with. We will gladly help you compile the application documents package in a way that will make the bank Compliance Department happy. If they are happy, they will approve your application for services.

Many people also believe that Swiss bank accounts pay no interest or that they pay very low interest. This statement is true only if taken literally. High interest rates is not the main selling point that banks in Switzerland have but this does not mean that you cannot earn anything if you keep money in a Swiss bank.

Swiss bankers are among the most successful and most trusted financers in the world. With their assistance, the money that you put in a Swiss bank can be invested into commodities, raw materials, securities, derivatives, precious metals, and so on and so forth.

Investing into the stock market via the account with a Swiss bank can be an especially attractive opportunity. As the bank is going to act as your broker, your identity will remain confidential when the transaction is made. What is more, you can give stock exchange instructions from wherever you are via the online banking application, a mobile application, or telephone. There is no capital gains tax in Switzerland. Only citizens of the United States trading in US securities have to pay this tax but it is their national administration that levies it.

If you open an investment account in Switzerland and put a considerable amount of money there, a Relationship manager will be assigned to you and he or she will manage your capital in accordance with your instructions. In addition to that, you can hire an external asset manager, which probably would be an even better idea as this manager’s services are going to be more personalized while bank Relationship managers usually have two or three hundred clients on their hands.

Thus, it is quite possible to increase your wealth when opening an account with a Swiss bank. Asset protection is highly important and Switzerland is world-famous for providing the best quality of it. However, enlarging your capital via secure investments is not less important and this goal can be achieved by setting up a Swiss bank account too. We will gladly tell you more about Relationship management available in Swiss banks as well as external asset management opportunities. Please write to us to [email protected] or use some other communication means such as WhatsApp or our live chat to apply for a consultation.

Banking in Switzerland: true facts about Swiss banks

When you have decided to set up a bank account in Switzerland, you have to learn some basic facts about banking in the country in order to know what to expect.

First, many Swiss banks require that you make an initial deposit when opening the account. Some banks will work only with those prospective clients who are ready to deposit at least 500,000 CHF with them. If you are prepared to open a seven-figure account, you will have the widest choice of banks in Switzerland. This said, however, there are some banks in the country that do not have any requirements as to the initial deposit. You can set up an account in a Swiss bank having zero francs in it and start using it whenever you want.

Besides, many banks also require that you keep a security deposit, that is, your account balance cannot go below a certain amount. The security deposit often equals the required initial deposit but not always. Once again, the banks that do not require any initial deposit normally do not have any minimum balance requirements either.

We are saying this in order to let you see that you can choose which Swiss bank you would like to apply to for services. Their sizes as well as their service conditions can be very different. The general rule is as follows: if you want to engage in small-scale banking in Switzerland, your possibilities will be limited even though you still can use some benefits that the country has to offer. If you go banking in Switzerland on a large scale though, your range of opportunities is going to be wide indeed.

Second, a Swiss bank cannot go bankrupt due to the country’s legislation. If a certain bank fails because of poor management or bad investments, another bank is going to buy it out. One more factor that provides for the security of Swiss banks is the tough regulation on the part of Swiss Banking Commission.

All Swiss bank deposits are insured for up to 100,000 CHF. If you have several accounts in one bank, your overall deposit insurance will amount to 100,000 CHF maximum. If you have accounts in several Swiss banks, however, your account in each bank is going to be insured for up to 100,000 CHF. Need we say that opening accounts with more than one bank would be a wiser decision? We also have to stress that the deposit insurance guarantee applies to both Swiss and foreign nationals who have bank accounts in Switzerland.

Third, you do not have to open an account in Swiss francs. This may be the most secure currency in the world but if you set up a US dollar account, a pound sterling account, or a euro account, you will have more opportunities to enlarge your wealth. Some banks will open accounts in a variety of other national currencies too. You can also set-up a multicurrency account with some banks. However, every bank will apply its own policies when it comes to the account currency (or currencies) so you had better inquire in advance if it is possible to set up an account in your preferable currency with each particular bank.

It is also possible to open a joint account with a Swiss bank. All you have to do is supply the personal data of the second account holder and there you go. However, if you would like your spouse or your business partner, for example, to be able to use your account as freely as you can yourself, you have to bear in mind that you cannot revoke this decision. In case you would like to give access to your Swiss bank account to somebody else, we recommend that you should issue a power of attorney while specifying the conditions on which this document can be annulled.

These days you do not have to travel to Switzerland if you would like to open a bank account in the country. You can submit all the application documents without leaving the comfort of your home. Some banks will want to videoconference with you while others will not. This said, however, remote account opening is not possible with all Swiss banks, as some of them will want to have the pleasure of meeting you in person.

As far as the application documents are concerned, their list is not very long at all. You will have to submit the following three key documents:

  • Your ID such as a copy of your foreign passport or ID card;
  • Proof of your residential address such as a recent utility bill that carries both the address and your personal name;
  • Proof of the legality of sources of funds.

Obviously, only the third document (or document set in some instances) may potentially cause some trouble even though the first two documents should also look neat and some banks require that all document copies be legalized and/ or apostilled.

You should realize that banks have to follow strict regulations and they have to conduct full-fledged KYC (Know Your Client) procedures. Especially when you are setting up a bank account remotely, the bank managers can judge about your reliability as a potential client only by the documents that you submit to them.

Long gone are the times when you could walk into the Swiss bank lobby with a million dollars in cash in your briefcase and put the money into an account there. Nowadays, the bank will not accept money from you unless it knows for certain that it originates from legal sources.

This is where our professional assistance is going to come in especially handy. We know exactly which documents each bank will accept as certifying the legality of your sources of funds and we will be happy to provide detailed consultations to you on this matter. Please write to our corporate email address [email protected] or get in touch with us by some other means of communication and we will schedule a virtual appointment with you.

We work closely with several Swiss banks and old private banks that have been run as partnerships for 200 years or so are our favorites. They provide the most personalized services to each client and cooperating with them is always a pleasure. However, depending on your purposes, we can also recommend a large Swiss bank to you with branches scattered all over the world. Please contact us and we will certainly find a bank for you in Switzerland that will come up to all your expectations.