Editor’s note: This article was first published in July 2013; it was written before the automatic exchange of tax information (the OECD Common Reporting Standard, applied by Switzerland and Singapore from 2017 to 2018), so its premise that an account opened in person leaves no trace for tax authorities no longer holds.
If you want to move your money to a tax haven, whether by opening an account in Switzerland or Singapore or somewhere similar, there’s only one way to do it: pack a suitcase and turn up in Switzerland to open the account in person. There’s no other way. Some people have told me that, searching online, they came across advisers who claim that nowadays you can open a Swiss account over the internet. That’s not true, and here’s why.
There are three reasons someone might want to move a sum of money to a tax haven, which basically come down to: 1. to evade taxes, 2. to protect their capital for various reasons, such as fear of a bank freeze (a corralito) in their country, and 3. to take money out of the country that doesn’t exist, or shouldn’t exist.
In any of these three cases, if we open a Swiss or Singapore account online, we have to transfer the money, and money leaves a trail. So the authorities in our country (the tax agency) would know that the money had left and would ask us for an explanation.
We take it as a given that opening an account in a tax haven only makes sense for large sums (over €500,000), since the high cost of maintaining the account would make it a bad deal for our money. Some say it’s only worth it with a minimum of €1 million.
(Read: Singapore will replace Switzerland as a tax haven)
Switzerland, Singapore and the other places considered tax havens were for large fortunes, and they still are. That hasn’t changed. Bear in mind that if you’re not a millionaire, you can’t take €50,000 through customs. You have to fill in a form stating where you’re carrying the money from and where to, and in our country’s case this would probably require the consent and approval of the Bank of Spain. A millionaire obviously has a faster, more anonymous and more direct way of doing it, which is why the best thing is to put yourself in the hands of a professional adviser in “offshore asset protection“.
If, despite all this, someone with €50,000 wants to protect it from a possible bank freeze in their country and decides to open a Swiss account online, they should know that if the dreaded corralito does arrive, the government knows you’ve taken €50,000 out of the country and could act accordingly. It might not be able to touch that money, but it could come after you and the rest of your assets.
So, to the question of how to open an account in Switzerland, the answer is still the same: by going to Switzerland, and only if you have a large fortune. If not, Switzerland and Singapore are not for you.
Further reading
- What financial education really is, plus 8 habits of millionaires
- 5 steps to getting rich, by Charlie Munger, Warren Buffett’s right-hand man
Featured image: Andrew Nash, CC BY-SA 2.0, via Flickr.
