Swiss banking is a red flag.
If you are considering having a secret Swiss bank account, I highly recommend you think again. It is the biggest red flag in the whole world. It is crazy to even think of having an account there. There is one modern alternative to a Swiss bank account, it is called Anonymous Internet banking. I mention it only as a theoretical discussion point, and certainly not as a recommendation, in fact just the opposite. I believe if money flows can be made transparent, a lot of illegal activities in the world would stop, including terrorist funding.
- Swiss banking gives you no secrecy. In fact it will draw attention to you. If you have a Swiss bank account the US tax office works with people in Switzerland and they know about you. Even if the Swiss have privacy laws dating to 1934, it does not matter. For example, USB handed to the US government all the names of US citizens with bank accounts. A total of 4,450 accounts. Is that safe for you? They are now in big trouble with the law. The US has special agents in Europe probing more. Credit Suisse could be next. If you have deposits in a small unknown shop, not a brand name than I think probabilities of being noticed are less. Between the OECD and the 2001 Patriot act, the world of banking has changed. Look at Assange, with alleged US government influence they shut his bank account down in a day.
- Offshore banking does not protect you from taxes. I am a US and EU citizen. I must report and pay taxes on all my worldwide income to the USA, even if I am a citizen of another country and live on the other side of the world and do my banking and business somewhere else. If someone has a Swiss bank account, you can report them under these guidelines for offshore banking. I even report my pittance I make teaching English. It does not matter where you live or citizenship you hold, US financial law applies to you. The US is one of the few countries to do this by the way.
- Assets in foreigner countries – Your financial capital is not safe either. If you have a bank account that exceeded 10,000 USD at any point in the year, and you do not report it to the USA, you can go to prison. So if you think you can hide money in some Alpine village, it is true only if you bury it in a hole.
- Swiss investing has not had a good return on money, in fact it is well below the market return on investments.
- The Swiss franc has been fundamentally overvalued for a while, although you can keep your saving it in other currencies of course. Many people in business I know have been burned by this. They took out loans and did business in the Swiss franc and lost when currency rates changed. The investment banks win.
- Swiss bankers have hidden terrorist money and criminal assets – Do you want to do business with unethical people? I do not.
Financiers from Switzerland might be good if you need private banking and are a high new worthy client who need money management. But in comparison to other global investments, it is not anything special. There are plenty of firms in the US that offer these services. The idea of Swiss banking is as outdated as investing in a typewriter manufacturer. They are also expensive.
Offshore and online banking alternatives
- Where do people put their capital overseas? If you know of a place to stash money chances are others do too, so there are no secrets anymore. There are only temporary havens. Right now there is a lot of money flowing into Asian banks. People are doing things in Malaysia and Singapore. In Europe, Cyprus and Malta is where the money is flowing. People also set up money in developing countries like Ukraine or even Russia where the US and EU does not have an influence. The Channel and Cayman islands as well as Luxembourg are being opened up, but not as fast as Switzerland. Whenever things are remote or disorganized the is more opportunity for creative accountants.
- Delaware better than Switzerland – With a creative accountants bad guys are using US banks for their illegal activities as it gives an air of legitimacy.
- Best alternative to Swiss banking is anonymous Internet banking – With modern financial cryptography, that is the mathematics of public key cryptography and blind signature algorithms there is almost no way, even with military computers your secrecy can be uncovered. This is a good article on the basis of anonymous Internet banking. Interesting stuff. I am not recommending it, rather this is more a discourse about world events.
- legitimate business that are cash rich – Tanning salons, Car washes anything that is hard to monitor. I am amazed at all the tanning salons that never had customers in my neighborhood. In fact, just to check it, I went in to asked the price, they looked at me all confused, like they did not expect a client. I am sure it is all money laundering, and highly illegal. I was tempted to call the police but I am sure they know about it.
- Me? I am open. I have a simple US credit union (the same one I have had for over 30 years) and a discount brokerage Scottrade account. To be honest, my brokerage account is where all the action happens and where I have my money. A brokerage account acts like a bank, with insurance, money markets and a debit card, but an added feature of trading stocks. A traditional savings accounts give me nothing. Maybe someday I will simply things to one Scottrade brokerage account, so my financial reporting is easier, but I like the folks at my credit union and they are not for profit. I also have a small amount of money in a Polish checking account.
I prefer to use my talents creating something and not scheming avoidance. I know tax avoidance is in vogue, but I highly recommend you obey the law and do not do anything illegal. This post is just about the world of secret money in the world not recommendations about money laundering in anyway shape or form.
So in conclusion I see no reason whatsoever to put your money in a Swiss bank account. The world has changed and Switzerland is not a great country for investing or secrecy.