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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.


Ultimate Secrecy

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.


 

Credit Cards

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.

2. Which credit card is the most confidential?

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 on card?
 - Name of bank on back of card?
 - Cardholder's name on card?
 - Swiss telephone number on card?
 - Credit card issued by another institution so that the bank cannot be identified by the first  four digits of the card number?

VISA or MASTERCARD - You choose!


 

How do I use a credit card discreetly?

  • Use their credit card exclusively at ATMs.
  • Avoid using their card in stores, restaurants and abroad.
  • Never pay for services in their country of residence:
    the credit card slip issued during transactions contains information about your account: identification of the bank (or at least the country), first name, last name.

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:

Exception 1 : Swiss withholding tax

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.

Exception 2 : US persons

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.

Let us say it once again : Switzerland does not levy any taxes on Swiss bank accounts and in practice the two exceptions to this general rule described above are not problematic. We speak about Swiss taxes only and we advise you to check with your local fiscal laws to see if you would be liable for taxes in your country upon accounts held in Switzerland.

 

Investing From Your Swiss Bank Account


Your Swiss bank account offers you a practically boundless investment horizon. Swiss banks are on the cutting edge in this area, offering you a wide selection of financial products that increases every day.

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
Swiss or foreign bonds
Investment funds
Derivatives
Precious metals (gold, silver, platinum, palladium)

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:

Return is tied to risk
Risk is tied to investment horizon
Risk is reduced through diversification

 

 

 

      

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