Are Swiss Bank Accounts Illegal

Owing to the way Swiss banks have been portrayed in Hollywood films and literature, they are usually linked with a cloak of secrecy. This has led to the prompting of the question ‘are Swiss bank accounts Illegal?’ Men or women in black suits are depicted taking the ‘account holder’ to his safety vault or requesting information about their ‘numbered accounts.’

The government revealed the identities of seven Indians who had ‘black money accounts in Swiss banks, giving India a reality check on the banks’ operations. The Supreme Court has now ordered the government to reveal all 700 account holders’ names and information. Hopefully, by the end of this article, the question “Are Swiss bank accounts Illegal?” should be answered.

But before then, if the media coverage of people revealed to have a Swiss bank account has piqued your interest, here are six things you should know before planning your vacation to Switzerland.

Who is eligible to open an account?

A Swiss Bank account can be opened by anybody above the age of 18. The bank, on the other hand, has the power to refuse a ‘politically exposed person or if the money is suspected of coming from illicit activity. The bank has the right to deny an account if the money’s origin is suspect or if it violates Swiss legislation. Money laundering rules have made tracing the origins of money and subsequent deposits a top task.

Can an Indian citizen open a bank account in Switzerland?

An Indian can open a bank account under the new Liberalised Remittance Scheme, however, there is a yearly limit. However, the Foreign Exchange Management Act allows such an account to be used for business purposes (FEMA). Furthermore, an NRI who later becomes a resident Indian can keep his overseas bank account open indefinitely, and there is no limit to the amount of money that can be kept in such accounts. Pradeep Burman of Dabur, whose name was found on the black money list, claims that his Swiss bank account has been active since he was a non-resident Indian.

How do you choose the best Swiss bank?

In Switzerland, there are approximately 400 banks, with the top two – UBS and Credit Suisse Group – accounting for nearly half of all bank balance sheets. An individual can choose between a huge bank, a regional bank, or a private bank, depending on their requirement for secrecy and end purpose. Choose a bank that does not have a branch in your nation if you do not want to easily divulge your account information. Bank branches must abide by the laws of the country in which they are located, not the laws of the bank’s headquarters.

What kinds of accounts offer the most privacy?

If you merely want to open an account in Switzerland for the sake of privacy, go for a ‘numbered account.’ The account number is used for all interactions with the account. The name behind the numbered account will be unknown to the vast majority of bank employees. However, such accounts are difficult to come by. A person who wants a ‘numbered account’ must be physically present when the account is opened and supply personal information along with a minimum deposit of $100,000.

Getting access to your funds

Accepting a credit/debit card or a check facility on your account is not recommended unless you wish to be tracked. Bank transfers, such as those depicted in movies, can also be tracked because the recipient bank typically wants information about the source of funds. Traveler’s cheques are the easiest approach to manage the account.

Getting your Swiss bank account closed

You have the freedom to close your account at any moment and for no fee.

However, before you book your travel to Switzerland, you must first determine the color of your currency in accordance with Indian government regulations. Money used to be either white (accounted for and taxed) or black (unaccounted for and untaxed) (tax evaded). However, the Swiss government has designated a new color for money found in Swiss accounts: red. The source of red money is unknown; it could be bribes, foreign currency commissions, or drug or blood money.

While black money is often just a tax avoidance concern if the source or creation of revenue can be proven, red money is an entirely different story. It goes without saying that this is a major criminal offense.

Click here to know about Swiss banks in India

FREQUENTLY ASKED QUESTIONS

Are Swiss bank accounts illegal?

The question ‘are Swiss bank accounts illegal’ is one of the most frequently asked questions when it comes to Swiss banking.

It’s as if you’re wondering if it’s illegal to store money in HDFC Bank or the State Bank of India or Citibank in the USA. Depositing money in Swiss Bank is similar to any other regular which makes it NOT IN ANY WAY ILLEGAL. Because of the nature of their country’s regulations, Swiss banks have always been able to keep account holder information private, making them an ideal choice for hiding unaccounted for money.

Nothing is against the law. It’s merely that Swiss banks don’t share consumer data with any country’s government. As a result, no tax information or account holder information is shared with anyone other than Swiss banks. As a result, if you’re an Indian politician, you’ll get up every morning, look in the mirror, and smile wryly at yourself, knowing that you’re wealthier than Bill Gates, Mark Zuckerberg, or Steve Jobs!

You can also read about Swiss bank account security systems.

What documents are required to create a bank account in Switzerland?

Depending on the type of account, the exact collection of documents required to open an account may differ from bank to bank. You can anticipate being requested to produce the following documents:

  1. Identification—You’ll need a government-issued document to prove your identification (e.g., a national ID or passport)
  2. Proof of address—Utility bills (e.g., gas, electricity, internet, etc. ), bank statements, or other official communications will be required in this situation. These documents should be no more than three months old.
  3. Confirmation of employment or funds legitimacy—It is standard practice for Swiss banks to ask for documents verifying the origin of the funds you wish to deposit, as well as a letter from your employer as proof of solvency.

Is it possible to open a Swiss bank account through the internet?

Yes, in a word. Many Swiss banks allow you to open an account remotely or online, but keep in mind that without assistance from a live person, this can be a lengthy procedure. When you create an account with a typical Swiss bank online, you’ll be asked to request an application pack over the phone or via the bank’s website. Once you’ve received it, you’ll need to fill out all of the paperwork, sign it, and mail it back to the bank.

You’ll also need the normal paperwork listed above, such as proof of identity, proof of address, and verification of the source of the monies you want to deposit. All of these documents must be authenticated by a third party (with a notarized copy or an Apostille stamp).

Conclusion

Now that the question ‘are Swiss bank accounts illegal’ is undoubtedly answered, we need to know that Money placed in Swiss banks tends to remain safe and impervious to most worldwide disasters due to the solid nature of the Swiss economy. Consider Swiss bank accounts to be similar to government provident funds; they don’t necessarily provide high returns, but they do ensure that your money is safe.