Learn something new every day
More Info... by email
Private banking is financial services that are available to consumers in the form of bank and investment products. Swiss private banking is simply a type of banking and investment account that is held at a Swiss bank. Switzerland has a long banking tradition, which places a high priority on confidentiality.
This high priority of confidentiality and privacy, however, has led to misunderstanding that foreigners can hide their money from the U.S. government and the Internal Revenue Service (IRS) in a Swiss bank. This is simply not true because there are regulations that foreign clients, including ones from the U.S., have to abide by in order to open and maintain a Swiss private banking account. For example, Switzerland is the financial center of the world because it has many corporate headquarters of premier banks in the country. Banking customers come from all over the world, including the U.S., Europe and Asia, to take advantage of the investment and money management advice of these professionals.
While a citizen of any country can open and maintain a Swiss private banking account, the taxation rules and the legal laws of the country of residence still apply. For example, if a U.S. citizen opens a Swiss private banking account and invests money in U.S. securities through the account, then these investments still have to be reported to the IRS in the U.S.
In return, the banking institution or financial institution that holds the account may ask the account holder to sign forms attesting to the fact that the account holder is responsible for reporting this to their country tax agency, and affirming they don't owe the IRS. Another major misconception of a Swiss bank account is that there is a heightened sense of secrecy and it is an account that can hide an identity, and hide a stash of money that is legally untouchable.
This too is not the case. If a U.S. citizen, for example, has a legal situation or case taking place in the U.S. that pertains to a financial matter, then the Swiss bank account may enter into the legal proceedings. For example, if a judge in the U.S. issues an order for the bank account holder’s name and address associated with a Swiss bank account to be revealed in divorce proceedings, then the Swiss government and bank must abide by the order.
In short, a Swiss private banking account is equivalent to having a private banking account in the U.S. The only differences are the country in which the bank is located and the fact that Switzerland is one of the major private banking centers in the world.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!