Swiss neutrality and national sovereignty, long recognized by foreign nations, have fostered a stable environment in which the banking sector has been able to develop and thrive. There is an important difference between bank accounts in the U.S. and those in Switzerland in terms of privacy. If your aim is asset protection and security, Switzerland has it all over the United States. In fact, people who live in countries with unstable governments and banks in particular often turn to Swiss banks because of their banking security and privacy laws. In Switzerland, if a banker divulges information about a bank account, even the existence of the account, without permission from the account holder, immediate prosecution is begun by the Swiss public attorney. Bankers face up to six months in prison and a fine of up to 50,000 Swiss francs. Additionally, you have the option of suing the bank for damages. Needless to say, Swiss banks are very careful about protecting your privacy.
Swiss bankers’ requirement of client confidentiality comes from a law that came into effect in 1934. It stipulates that "anyone acting in his/her capacity as a member of a banking body, as a bank employee, agent, liquidator or auditor, as an observer of the Swiss Federal Banking Commission (SFBC), or as a member of a body or an employee belonging to an accredited auditing institution, is not permitted to divulge information entrusted to him/her or of which he/she has been apprised because of his/her position."
Of course there are some noteworthy exceptions, such as drug trafficking, insider trading and organized crime. There must be a substantial criminal allegation before a governmental agency, especially a foreign one, can gain access to account information.
According to the Swiss Bankers’ Association Web site, there is a duty for bankers to provide information under the following circumstances:
Must you pay income taxes on your Swiss bank account?
Yes! Interest earned in a foreign account is taxable under present US Tax law. Switzerland has, in recent years, facilitated more effective tax information exchanges between the two countries. There are no capital gains taxes deducted at the source by Swiss banks in Switzerland, but account holders need to file tax returns in their country of residence and must include all capital gains/losses and income and expenses, even if earned offshore. So forget about trying to dupe the IRS.
Can creditors besides the IRS get information on your Swiss Bank Account?
If you are looking for a way to "protect' assets from snoopy investigators, a Swiss account can be the ideal place. The main reason for having such an account for most people has to do with keeping one’s financial status a secret, and protecting one’s assets from attack. No private citizen, or his or her legal representative can ever receive any type of information about anyone’s Swiss bank account. Unlike American law where law enforcement agencies, the judicial system and private citizens can gain access to all kinds of financial information, under Swiss law, except for extraordinary circumstances as outlined above, neither the bank’s officers or employees are allowed to reveal any information relative to any account to anyone, including the Swiss government. It is next to impossible for private investigators, attorneys, family members, business associates, etc., to find out anything about your financial affairs.
If a Swiss bank account is of interest to you, contact a financial expert who is well versed in setting up such accounts for assistance and advice.