Switzerland is known for its impressive banking system, including its legendary privacy policy. Disclosing customer personal information is a crime for a banker in Switzerland, this is a big advantage for anyone who wants to hide illicit money and valuables in the past. However, concerns about terrorism and smuggling activities are currently prompting the Swiss authorities to reject customers suspected of being involved in illegal activities. Some Swiss banks also generally reject current US customers, due to a major investigation conducted by the US Department of Justice. While Swiss banks are not as attractive as they are portrayed in spy or action movies, they are still very well run and confidentiality is guaranteed. Each bank has its own steps for opening an account, but knowing the basic information and required documents will help you set up a Swiss bank account.
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Part 1 of 4: Choosing a Bank and Its Services
Step 1. Learn if you qualify for a Swiss bank account
Today many banks, not least in Switzerland, are required to verify the identity of the account holder and all sources of income. This is done to prevent the depositing of money in Swiss bank accounts obtained through illegal activities. And in light of the United States Department of Justice's crackdown on tax evasion, some Swiss banks refuse to do business with American customers for fear of legal consequences. Where you live and work can affect whether you qualify for a checking or savings account with a Swiss bank.
- Citizens of certain countries are prohibited from opening an account with a Swiss bank. The reasons are various, one of which is official embargoes (for example countries such as Russia and Iraq) and other political exclusions.
- Your application to open an account with a Swiss bank may be rejected, regardless of your nationality, if you are considered a “politically exposed” person – a person involved in a scandal or whose reputation is publicly doubted. If such a person becomes a customer, the bank is concerned that there will be a big risk to the bank's reputation.
Step 2. Find a bank that meets your needs
There are approximately 400 banks in Switzerland, although the two main banks – UBS (Union Bank of Switzerland) and Credit Suisse Group – hold almost half of the total investment in Swiss banks. One of the biggest determining factors in choosing a bank is what you are looking for in a bank. Comparing the policies and investment opportunities of well-known banks can help you weigh the pros and cons of each and determine which bank is best for you.
- If privacy is the most important factor, consider choosing a bank that does not have branches in your home country. Most banks are governed by the laws of the country where the branch of the bank is located, not by the laws of the country where the bank's head office is located.
- Be aware that unless the bank has obtained qualified intermediary (QI) status, it may report the account holder, if the account holder is a United States citizen, and all money received from the United States to the IRS.
Step 3. Select the account type
There are various types of accounts available with Swiss banks. Some bank accounts require an initial deposit with a certain minimum amount, minimum balance, and other conditions. Compare the requirements of each account type you are interested in to determine which one is best for your financial needs.
- Some banks require customers to use Swiss Francs (CHF). Other banks allow the use of US Dollars, Euros and other currencies in the world. If currency exchange is an issue for you, check which currency your preferred bank accepts.
- One type of account that is known to be the most secret is the “numbered account”. In fact, these accounts are not “secret” or “anonymous” accounts. Some high-ranking bank employees will know the identity of the account holder, but these accounts still offer some level of confidentiality, such as the bank being required to only use the account number in all correspondence related to numbered accounts. However, these accounts tend to have a number of limitations, and maintaining them may require an annual fee of up to 2,000 Swiss Francs.
- It should be noted that some Swiss banks are reluctant to offer general savings accounts to foreign nationals. Instead, Swiss banks focus on providing foreign nationals with investment opportunities and specialization in wealth management.
Part 2 of 4: Opening an Investment Account
Step 1. Visit a bank branch or representative office
Customers who are interested in opening a Swiss bank account should visit the operational branch office, either in person or by representative. If using a representative, then he must complete documentation for both himself and the person he represents. Account opening cannot be done online due to strict banking guidelines, because the identity of potential customers and their source of income cannot be verified online.
Some banks may allow you to complete this process by mail. A photocopy of your official passport must be certified by the designated institution and sent back to the bank of your choice
Step 2. Prepare the required documents
Like most banks around the world, Swiss banks need to verify the identity and source of income of customers wishing to open new accounts. For this reason, most banks require prospective customers to meet face-to-face with bank representatives to complete the verification process.
- A valid customer passport may be required as a means of identification.
- Bank representatives may request documents to verify the authenticity of income. For example, a bank representative may ask for a copy of the home sale agreement for the money, or a receipt for securities, or a statement from a bank that you have worked with previously.
- The bank can verify the address listed by the prospective customer by sending several types of correspondence by mail.
Step 3. Fill in the required forms
There are forms and principals of the application that must be filled out by prospective customers as in other banks. The paperwork to be processed can be lengthy due to the security of Swiss banks and international pressure to account for tax evasion efforts. A Swiss banking expert informed that there is a document consisting of more than 100 pages that foreign investors need to open a Swiss bank account.
Step 4. Meet the minimum investment amount requirement
Each bank has different requirements for the minimum deposit/investment amount that must be met. Sometimes different types of accounts in one bank may have completely different requirements. Some banks (and account types) have minimum deposit/investment amounts starting from millions of dollars.
Many private banks will not accept new customers unless the customer is willing to invest a minimum of 250,000 Swiss Francs ($265,896, 64 US Dollars, or 230,704, 37 Euros). However, some banks, including UBS and Credit Suisse, can accept investments with an initial deposit of under 50,000 Swiss Francs ($53,179, 33 US Dollars or 46,140, 87 Euros). To find out the minimum initial deposit requirements, you can check with the bank you are interested in investing in
Part 3 of 4: Opening a Personal Account
Step 1. Visit a branch office or bank representative
Ordinary people who want to open a Swiss bank account need to see a bank representative. It is the best way to see a bank representative and then complete the account opening requirements as soon as possible. If possible, a visit to a Swiss bank branch before you close your old bank account from the country you are leaving will be very helpful. Some expats will find it difficult to find a place to live without a bank account, but they will also find it difficult to open an account at a bank without a clear address.
Prospective customers who live outside Switzerland and wish to open a Swiss bank account but cannot visit the branch office can submit an application package by mail. The documents prepared by the prospective customer must be approved in advance, either by a notary, a Swiss bank employee, or a correspondent bank employee who cooperates with the Swiss bank
Step 2. Assign an account manager
Most Swiss banks assign a personal account manager to work with each customer, remembering who your account manager is is important for future bank transactions. Ask for contact information about your account manager, including your email address and direct phone line at the bank.
Bank branches in big cities usually have at least one account manager who can speak foreign languages, including English. At a minimum, an account manager will be fluent in one of the four main Swiss languages: German, Italian, or Romanian. If you need an account manager who can speak a language other than these four, it's a good idea to call your bank in advance to make the necessary arrangements
Step 3. Provide the required documents
Like most banks and financial institutions around the world, new customers who wish to open a personal account must provide documents that prove their identity and source of income.
- New customers will be asked to verify their identity and address. If your ID does not include your local address in Switzerland, you can prepare a signed copy of the rental contract.
- Some banks will require new customers to verify their employment status. The bank will also require new customers to show an employment contract and a tax return as part of the job verification process. Showing proof of employment helps the bank know that the money deposited into the account did not come from illegal activity.
Step 4. Study the cantonal requirements
There are more than 20 Swiss banks that use the cantonal system, meaning they only serve residents of the canton/state where the bank is located. If you open a personal account at a cantonal bank and you move to another canton, you will be asked to transfer your account to the respective canton. This will not be a problem for customers who open accounts with Swiss national banks.
Step 5. Set aside funds to pay service fees and account opening fees
The majority of Swiss banks charge a monthly maintenance fee for personal accounts, and may charge additional fees for credit cards or Carte Maestro (debit cards).
- Monthly fees for personal accounts tend to range from 10 to 30 Swiss Francs (CHF), but usually customers can reduce or get rid of these fees by switching to an electronic passbook, taking out the bank's mortgage product, or depositing a certain amount of money into the account.
- Credit and debit cards usually have an annual fee that ranges up to 3 Swiss Francs.
Part 4 of 4: Accessing Money in Swiss Bank Accounts
Step 1. Study your tax requirements
This is especially important for citizens of the United States who open a Swiss bank account, but can also be applied to other countries. Regardless of the form of the account, United States citizens are required to:
- File Form 1040, schedule B, Part III, which states that you will open an account with a foreign bank.
- file Form TD F 90-22.1 by June 30 of each year to inform the IRS of the location of any foreign bank account that exceeds $10,000 at any point in the previous year.
Step 2. Ask for a Master Card
A Master Card is basically a debit card issued by your bank. This card can be used to withdraw a certain amount of money or as a means of payment at most shopping places, but merchants in small towns and villages may only accept cash.
Step 3. Apply for a credit card
The majority of Swiss banks issue credit cards to attract customers. However, customers may be required to provide the bank with a certain amount of security deposit, usually one to two times the maximum monthly credit limit, to prevent customers from defaulting. The security deposit will be returned to the customer after the revocation of the credit card, as long as the customer has paid the fees that have been used using the card.
Step 4. Use traveler's checks
Travelers' checks do not always provide the best exchange rates, but they are very useful for overseas customers because they are easy to replace if lost or stolen. In addition, traveler's checks enable customers to conduct business and transactions securely without compromising the privacy of their bank accounts.
Investors with personal accounts in Swiss banks may refuse to obtain credit cards or checkbooks due to privacy concerns. Whenever you write a check or use a debit card it leaves a trace that can be traced back to your account. If you want to maintain the confidentiality of your account, you should not use a debit card or checkbook
Step 5. Don't be afraid to close your account
Most Swiss banks allow at some point you have to close your account and withdraw all your investments without any restrictions or fees. This gives customers confidence that their investment is still available in the event of an emergency.
