Banks in Geneva
Geneva – world capital of private banking
Geneva is the birthplace and the capital of the world’s private banking industry. The dynamism and influence of Geneva as a financial centre is reflected in the density and diversity of the financial institutions present in the city which offers an exceptionally developed financial infrastructure to support Geneva-based corporations in their global activities. Building on its centuries' old banking expertise, Geneva offers all the services that private, corporate and institutional clients may need covering international law, accountancy, auditing, consultancy, insurance, reinsurance, inspection and arbitration. Geneva was the birthplace of private banking and is the heart of the Swiss asset management sector.
Seventy-five banks (including 49 foreign-owned institutions) are headquartered in Geneva while a further 45 international banks have branches here. Industry specialists estimate that approximately 55% of the 3,000 billion CHF in assets managed in Switzerland are directly or indirectly controlled from Geneva. Another criterion is the volume of Geneva-based fiduciary transactions and assets under management. According to a recent study, foreign and Swiss banks based in Geneva account for 30% of the overall volume of fiduciary transactions in Switzerland. Private and institutional assets managed by banks operating in Geneva can be estimated at CHF 1,200 billion. Since Switzerland manages some 35% of global transnational assets, it can be estimated that about 14% of these are managed in Geneva, thus making Geneva the world capital of asset management.
Swiss bankers are under obligation to keep any information about you or your account strictly confidential.
This bank secrecy is among the strictest in the world and stems from an age-old historical tradition. It is established in Swiss law. Any banker who reveals information about you without your consent risks several months in prison.
The only exceptions to this rule concern serious crimes such as gun smuggling and drug trafficking.
Bank secrecy is not lifted for tax evasion. This is because failure to report income or assets is not considered a crime in Switzerland. As such, neither the Swiss government, nor any other government, can obtain information about your bank account. They must first convince a Swiss judge that you have committed a serious crime punishable by the Swiss Penal Code.
Bank secrecy will not be lifted for private matters such as inheritance or divorce if you have kept your banking information strictly confidential. It is up to plaintiffs to prove that the account exists if they wish the judge to pursue the case. In this respect, the numbered account provides the maximum degree of confidentiality.
1. Can I obtain a credit card?
You can obtain a credit card if you make
a security deposit. Swiss banks will not verify your past credit
ratings: the security deposit is considered to be enough coverage.
Most banks offer credit cards without the bank logo. An expert can nevertheless identify your bank using the first four digits of your card number.
However, if you wish to avoid any ties with the bank whatsoever, in some cases you can have a card issued by an institution other than the bank.
Credit card companies (Visa, Mastercard
and American Express) are prohibited from providing any information on
cardholders (banking relations, address, etc.). They are bound by Swiss
professional secrecy, just like the banks.
Checklist for credit card confidentiality:
- Bank logo
VISA or MASTERCARD - You choose!
How do I use a credit card discreetly?
No Taxes On Swiss Accounts
There are no taxes on the money you invest in Switzerland - not on capital gains, and not on interest.
There are only 2
exceptions to this rule:
There is a 35% withholding tax on the
basic interest earned on your account. "Withholding" means that the bank
will keep 35% and send it to the Swiss tax authorities (on a no-name
basis), and pay you only 65% of the interest earned. To avoid this tax,
your banker will propose you to invest the funds in a money market fund
which will be exempt from this whitholding tax.
If you are a US person you should
abstain from investing in US securities from your Swiss bank account if
you want to retain privacy. When you open your account, the bank will
ask you whether you are a US person, that is, whether you are a US
citizen, green card holder or US taxpayer for other reasons. If you
answer yes, you will have to either instruct the bank NOT to invest in
any US securities, or to accept that the bank forwards information about
your US investments to the IRS.
Investing From Your Swiss Bank Account
A risk-free investment yields interest (see rates). To exceed this basic rate, you can invest in a variety of products:
Swiss or foreign stocks
Either you decide to manage your investments on your own by choosing your stock transactions, or you hand the reigns over to your banker, who will manage your investments according to your terms.
Regardless of the method you choose, it is a good idea to know the 3 basic rules for any investment strategy:
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