Swiss banks accounts:
myth vs. reality
In David Mamet's 1997 movie The
Spanish Prisoner, a con man played by Steve Martin establishes
a numbered Swiss bank account with a few keystrokes on a laptop
computer in New York. The new account belongs not to him but to
his flattered victim.
"All of 15 Swiss francs in it," Martin's character
modestly tells his naive mark. "But you ever want to impress anybody,
they can find out you have a Swiss account -- but Swiss law prohibits
the bank from revealing the balance.
"Thus," he adds after a portentous pause, "are
all men created equal."
That bit of dialogue makes Francois Micheloud
laugh. "No, no, no," the Swiss account broker says. "You can't open
an account online." He shakes his head good-naturedly as he talks
from his office in Lausanne. He laments that movies give the impression
that Switzerland is a "no-questions-asked country."
"But it's not like this at all," he adds. "No,
no, no, not at all. The big motto of all banks here is, 'Know your
client.' They keep repeating it ad nauseam."
And in our popular culture, misinformation about
Swiss banks is repeated ad nauseam. A few points about the above-quoted
Doctor, dodger, consul, spy
- Fifteen Swiss francs is worth about $9. A
Swiss bank is about as likely as an American bank to accept such
a low opening deposit: not very.
- People will "find out you have a Swiss account"
only if you tell them. Swiss law prohibits
the bank not only from revealing your balance, but from acknowledging
that you're a customer or revealing when you made your last transaction.
Bankers can go to jail for violating Swiss privacy laws.
- Banking secrecy evaporates if a Swiss judge
is convinced that you have used a Swiss bank to commit a serious
crime such as financial fraud, embezzling, money laundering or
drug dealing. It has to be a major crime under Swiss law, even
if it was committed elsewhere.
- On the other hand, it's not a major crime
in Switzerland to hide money from an ex-spouse or the taxman,
so an American divorce attorney and the IRS can't pry information
from a Swiss bank.
- All men may be created equal, but not all
Swiss bank accounts are created equal. You'll find private banking,
retail banking, named accounts, numbered accounts.
By adulthood, we have absorbed lore about
Swiss bank accounts from movies, TV shows and spy novels. A lot of
that lore is inaccurate. Micheloud says he gets calls occasionally
from script writers. Still they take artistic license.
Who opens a Swiss account? Swiss citizens, mostly.
Nomadic consultants who hopscotch from Brussels to Lisbon to Berlin
for a few months at each job. People who live in countries with
unstable governments and shaky banks. And, yes, the occasional spy
or tax dodger or doctor who worries about malpractice suits.
Swiss banks prefer people to open accounts in
person, but they'll work with brokers such as Micheloud, who runs
& Cie., a company that helps foreigners open Swiss accounts
If you ask Micheloud to help you open an account,
he will send you a Matterhorn of paperwork to fill out, including
details about your life and job, and a letter of introduction from
a stateside banker. Your signature and identity have to be "authenticated"
-- by a notary public or consul or someone else, depending on circumstances
-- and you send the completed paperwork back.
Micheloud says he vets applicants as strictly
as Swiss banks do. His credibility is on the line. "It's a serious
business, so it means we don't help criminals," he says. "We don't
help drug dealers. The identity of the client and the whereabouts
of the client and the economic origin of the money have to be known."
When someone wants to open a Swiss account by
mail, bankers wonder why. They might understand why someone in India
or Japan might not want to pay air fare to Geneva, but generally,
Micheloud says, "someone who deposits money and doesn't want to
come and see it is strange, OK?"
Micheloud says his company rejects about half
of applicants. He has to feel comfortable with the applicant's motive
for getting a Swiss account, and he has to understand how the applicant
earns the money. And the applicant has to be from a country he understands.
For example, he's not interested in applicants from Kazakhstan.
Although it's better to do it in person, he
will even open a numbered account by mail for trustworthy people
-- ambassadors, for example.
Closed mouths, many tongues
The Swiss numbered account looms large in
the popular imagination. We think of spies and blackmailers and exiled
dictators who demand to have money deposited in numbered accounts.
If you believe that a numbered account confers anonymity, think again.
There's no such thing as an anonymous account. When you have a numbered
account, at least two bank employees know who you are: the manager
and the director and maybe a few other high-level employees.
Beyond those people, your identity is hidden.
Bank documents are printed with the account number, not a name.
You or a minion need not speak your name in dealings with the bank;
the number is enough.
Because the bank has to maintain numbered accounts
separately from other accounts, numbered accounts cost more. Micheloud
says an annual service charge of 200 francs (about $121) is common,
"whereas with any other account, you don't have to pay anything."
And a Swiss bank would be reluctant to open
a numbered account with a balance of less than $100,000. Any less
than that would be unprofitable, and bankers would wonder why you
want to go through the hassle.
Switzerland isn't the only place that touts
banking secrecy. Luxembourg and Liechtenstein prize secrecy, and
so do banks based in the Cook Islands (a Polynesian tax haven roughly
halfway between Hawaii and New Zealand) and in the Caribbean. The
Bahamas and Cayman Islands are popular offshore banking destinations
The Swiss boast that they have hundreds of years
of political stability and well-educated bankers who are able to
discuss financial matters in English, French, German and Italian.
If you need a banker who speaks Hindi or Cantonese, they'll produce
one. Caribbean bankers, they sniff, are not as well-educated and
are prone to rolling over when the IRS knocks on the door.
Opening the door
You can get a named account at a Swiss bank,
which means that your name appears on statements and in the bank's
internal documents. It might make sense to get such an account if
you work out of a corporate office in Europe. If you're a regular
Jane or Joe eking out a living in America on less than six figures
a year, there wouldn't be any point to it. Who's going to accept your
Say you wanted to open an account with $10,000.
It would be best to open it in person because a banker is unlikely
to return phone inquiries from a foreigner about opening such a
wimpy little account.
Banks raise the bar higher for private banking,
in which the bank manages clients' investments. There are 15 privately
owned Swiss banks -- some have been owned by a single family going
back generations -- that discreetly handle the financial affairs
of the rich. They might be willing to open an account if you have
a million francs to invest -- about $600,000. The private banking
departments of financial giants UBS and Credit Suisse might open
their doors to someone with $200,000 to invest.
Just make sure you walk through the correct
door when you visit the bank to open your account. If you're looking
for the retail banking lobby, don't walk into the private banking
office. A private banker will turn you away politely. Then, after
you leave, the bankers might share jokes at your expense -- in English,
German, French and Italian.