An Update on Swiss BankingJacob Stein Esq.
March 21, 2009 — 1,239 views
Last week I travelled to Zurich to meet with several Swiss private banks. We do a lot of business with Swiss banks, and the past few months have brought about many changes.
All of the recent changes in the Swiss banking regime are due to the scandal at UBS and the economic downturn.
UBS has forced the United States Treasury to step up its pressure on the Swiss banks to disclose information on US clients who have Swiss bank accounts. The Swiss government has already bowed down to the pressure from the United States and has agreed that the Swiss banks will cooperate with US tax investigations. This means that at least in some respects the vaunted Swiss bank privacy is gone.
The recent economic downturn has put pressure on many countries to seek new revenue sources. The EU is now also exerting pressure on Swiss banks to cooperate with their tax investigations. The so-called Judgment Day will take place on April 2, when EU holds a meeting on what to do with Swiss banking.
The conduct of the US and EU tax authorities is understandable. They are entrusted to collect revenues, and if taxpayers use Swiss banking privacy laws to evade the payment of taxes, the Swiss should cooperate. What I find appalling is the conduct of the Swiss government, which completely caved to the pressure. Banking is a huge part of the Swiss economy. The vast majority of Swiss bank accounts are not owned by tax cheats. By significantly reducing the privacy of these accounts, the Swiss government has effectively cut the branch it is sitting on. Stupid and shameful.
These new changes have a limited impact on our clients who seek Swiss bank accounts for asset protection purposes.
All Swiss banks who do business with US clients will require a W-9. Our clients fully report their foreign bank accounts to the US tax authorities and this new requirement does not worry us.
The bigger worry is that many Swiss private banks are now getting out of the US market. Many banks are actively kicking out their US clients, and it is getting more and more difficult to find Swiss banks willing to do business with US investors.
Fortunately, on my latest trip I was able to get assurances from our existing banking contacts that they will continue to do business with us and was able to secure several new relationships.
The most interesting new relationship comes from a Cantonal bank. Depositors holding cash or equities with a Cantonal bank are granted an unlimited deposit guaranty by the Canton that owns the bank. No more worries about FDIC insurance limits.
For more information on Swiss banking, log on to www.maximumassetprotection.com.
Jacob Stein Esq.
Mr. Stein is a partner with the law firm Boldra, Klueger and Stein, LLP, in Los Angeles, California. The firm's practice is limited to asset protection, domestic and international tax planning, and structuring complex business transactions. The firm's goal is to provide the highest quality legal work that is usually associated with only the biggest law firms, in a boutique firm setting. Jacob received his law degree from the University of Southern California, and his Master's of Law in Taxation from Georgetown University. Mr. Stein has been accredited by the State Bar of California as a Certified Tax Law Specialist and is AV-rated (highest possible rating) by Martindale-Hubbell.