The Swiss Banking Act of 1934 made it criminal for Swiss banks todisclose the name of an account holder. Similar to the confidentiality protections between doctors and patients or lawyers and their clients, these protections are the primary reason that Swiss bank accounts are so popular with wealthy banking customers around the world.
Key Takeaways
- Swiss banks employ a strict level of scrutiny in evaluating official documentation of your identity.
- Nonresidents of Switzerland must be at least 18 years old to open a Swiss bank account, and that's about the only restriction.
- The main benefits of Swiss bank accounts include low levels of financial risk and high levels of privacy.
- Swiss law prevents the bank from disclosing any information regarding an account (even its existence) without the depositor's permission, except in cases where severe criminal activity is suspected.
Opening a Swiss Bank Account
Surprisingly, opening a Swiss bank account is not that much different from opening a standard bank account. You have to fill out forms and provide documentation that proves who you are and what you do. However, due to some special circ*mstances regarding privacy, the level of scrutiny over providing official documentation of your identity is more strict. For example, you may need to show your official passport to provide your identity, whereas a driver's license would probably suffice in the U.S.
There are also different minimum balance requirements depending on the type of account you want. These can range from a few thousand dollars to millions of dollars.
Swiss Bank Accounts and Nonresidents of Switzerland
Nonresidents of Switzerland must be at least 18 years old to open a Swiss bank account, and that's about the only restriction. Account holders can choose their currency—most hold their funds in Swiss francs, U.S. dollars,euros,or British Pound Sterling.
There's usually no minimum balance required to open an account, but once an account holder deposits funds, there is typically a minimum balance requirement, which varies according to the bank. If you don't have that much idle cash, you might be better off looking for the best savings accounts in your own country.
Swiss anti-money-laundering laws require a prospective Swiss bank account holder to provide several documents to open an account. These include authenticated copies of your passport and documents explaining your profession, such as tax returns, company documents, professional licenses, etc.; proof of the source of your funds; and other typical personal information.
$3.9 trillion
The total value of all assets in the Swiss banking sector, as of 2021. That's 520% of Switzerland's GDP.
Benefits of Swiss Bank Accounts
Some benefits of Swiss bank accounts are the low levels of financial risk and high levels of privacy. The Swiss economy has been known to be very stable, and the country has not been part of any major conflicts for some time. Furthermore, Swiss law requires that banks have high capital requirements and strong depositor protection, which protects deposits from financial crises and conflicts.
Accounts held in Swiss Francs will earn a small amount of interest, but they'll also have to pay the Swiss withholding tax. For this reason, most foreign account holders have their Swiss bank account in another currency.
Swiss law states that the bank can't disclose any information regarding an account (even its existence) without the depositor's permission. The only way information will be revealed is if a government agency says that a depositor is involved in a criminal act or some other financial issue (like bankruptcies, divorces, or inheritances). Furthermore, Swiss anti-money-laundering regulations also require depositors to provide proof regarding the origin of the funds they are placing in their accounts.
How Do You Open a Swiss Bank Account?
Non-residents of Switzerland must be over age 18 and will need to provide their passport and other identification documents when they open an account, along with documentation showing their profession and the source of their funds. These documents are closely scrutinized in order to prevent money-laundering.
Can You Hide Money in a Swiss Bank Account?
While Swiss banks were once synonymous with money laundering and tax evasion, the opportunity for illegal activity diminished after Switzerland began exchanging information about account holders with other OECD nations in 2018. While Swiss banking laws still afford a high degree of privacy, it is now much less practical to use them for illegal purposes.
How Much Does a Swiss Bank Account Cost?
Swiss banks may have a monthly charge for account holders, as well as minimum balance requirements. Requirements will vary from bank to bank.
The Bottom Line
Popular culture has made Swiss banks synonymous with espionage and hidden wealth. While the country's banking secrecy laws still afford a high degree of privacy, strict anti-money laundering laws make the country a much less practical haven for ill-gotten wealth. Anyone over 18 is free to open a Swiss bank account, provided that they can provide identity documents and demonstrate the source of their wealth.
FAQs
The minimum balance depends on the type of account and bank you open with. For example, most major Swiss banks require a minimum initial deposit of one million U.S. dollars for foreigners. However, some banks have no minimum balance.
Do Swiss bank accounts report to the IRS? ›
As of 2022, information about your Swiss bank account must be handed over to the IRS in the United States. The IRS is responsible for collecting taxes and assessing the wealth of Americans, even wealth held in Swiss bank accounts must be accounted for.
Do Swiss banks accept Americans? ›
Citizens Legally Open Swiss Bank Accounts? Yes, it's legal for U.S. citizens to open a bank account in Switzerland. However, setting up a Swiss bank account requires a identity verification and you might have to provide various official documents that serve as proof of address and income.
Can a normal person open a Swiss bank account? ›
In most swiss bank account, opening minimum balance could be low, however, in most of the over 200 Switzerland banks, a foreigner is allowed to open current accounts only if they have an investment account with the same bank with a minimum deposit of one million Swiss francs (CHF currency).
Why would someone open a Swiss bank account? ›
In fact, Swiss banks do offer very good economic security, asset protection, and confidentiality in a lot of cases. Swiss banks are highly capitalized, and they're very safe and secure. In addition, Swiss banks allow you to open accounts in practically every major currency.
Why do people put money in Swiss bank accounts? ›
Some benefits of Swiss bank accounts are the low levels of financial risk and high levels of privacy. The Swiss economy has been known to be very stable, and the country has not been part of any major conflicts for some time.
Can the IRS see foreign bank accounts? ›
Per the Bank Secrecy Act, every year you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts.
Are Swiss banks tax free? ›
Contrary to popular opinion, Switzerland does not allow foreign individuals to live and bank in its borders tax-free. However, wealthy individuals can pay a low, lump-sum option on the money they bank inside the country, and the government considers their taxes paid.
What US banks have branches in Switzerland? ›
United States
- Citibank, NA, Las Vegas, Succursale de Genève.
- Citibank, NA, Las Vegas, Zurich Branch.
- Goldman Sachs Bank AG.
- JPMorgan Chase Bank, National Association, Columbus, Succursale de Zurich.
- J.P. Morgan (Suisse) SA, Geneva.
- Merrill Lynch Capital Markets AG.
- Morgan Stanley AG.
The banks do not want to have to deal with the USA's bullying government or the consequences it might impose, resent the fact that the USA insists on trying to impose its own law on foreign jurisdictions which it has no business to do, and the easiest way to avoid it is to have no American customers.
It's quick and easy to send money to Switzerland with Xe.
- Sign in to your Xe account or sign up for a free account.
- Initiate a transfer to the Switzerland, and enter the currency you'd like to transfer and the amount.
- Enter your recipient's bank information.
- Provide your payment information.
The Paradigm Shift: Reporting to the U.S.
FATCA introduced a substantial paradigm shift, compelling foreign financial institutions, notably Swiss banks among others, to disclose detailed account information belonging to U.S. citizens directly to the U.S. IRS.
What is the minimum balance in a Swiss bank account? ›
Many Swiss banks ask for a bank account minimum deposit of 1,000,000 USD from foreigners. We help protect what you've earned. We've been advising people with asset protection and estate planning for over 30 years.
Which Swiss bank to choose? ›
Which Swiss bank is the best ?
- UBS Group AG UBS, based in Bahnhofstrasse 45, Zurich, was formed in 1862. ...
- Julius Baer This private banking group has locations in more than 20 countries with a head office in Zurich. ...
- Pictet , established in 1805, is a leading European independent wealth and asset manager.
Opening a Swiss bank account from abroad
Banks will ask for more extensive documentation from overseas applicants. You must prove your identity by providing a passport and residency card (if applicable) and your address. You will also be asked to provide details about your personal and employment history.
Is it worth having a Swiss bank account? ›
In the simplest terms, Swiss banking has a reputation for anonymity and the ability to safeguard substantial assets from public scrutiny. As an international banking leader, Swiss banks offer unprecedented professionalism.
Can foreigners open a bank account in Switzerland? ›
Foreigners can open bank accounts in Switzerland, although some require customers to visit a branch to complete the process. If you don't plan to travel to Switzerland soon, you must verify the details of any account you are considering before starting the application process online.
Are Swiss bank accounts still secret? ›
Banking secrecy remains in force for all residing in and taxable in Switzerland only. Disclosing client information has been considered a criminal offence since the early 1900s.
