Swiss Financial Sector

Zurich is the biggest city in Switzerland and the capital of the canton of Zurich. It is regarded as Switzerland’s commercial center, where headquarters of world’s many largest banks are located. Offshore banking constitutes to 70% of country’s economy and most of the banking business is concentrated in Zurich.

Swiss offshore banking is extremely popular in the world since Switzerland has a long record of providing secure, safe and anonymous offshore banking services for decades. Swiss bank secrecy laws have proven to be very strong and highly enforceable that makes Switzerland as one of the major offshore banking centers in the world.

Switzerland’s economy is extremely strong that is ensured by country’s images of world’s leading offshore banking centers. Today assets held by Swiss banks amounts to 1.3 trillion pounds or 3 trillion Swiss Francs. Country’s currency has appreciated in value against world’s major currencies reflecting large capital inflows.

Offshore Banking Legislation

The banking sector is supervised by Federal Banking Commission, which acts according to the Banking Law of 1934. Although Banking Law is updated from time to time to ensure that supervisory framework is consistent with the best-known practices, the main principles remain unchanged: Swiss banks are subject to strict reserve requirements and reporting norms.

Offshore banking supervision is crucial to Switzerland to ensure good standing of its financial institutions and the entire banking sector. Swiss authorities are limited in utilizing lender-of-last-resort function due to the volume of deposits in banking institutions. The aim of the supervision is ensuring health and reliability of the banking sector and by all means avoiding banking problems.

Swiss offshore banking does not protect individuals or businesses from illegal practices and does not provide a room for money laundering. In 1998 authorities adopted Money Laundering Law, which describes rules that should govern bank’s activity towards suspicious accounts. Breaking these rules is subject to large fines.

Swiss offshore banking accounts are not only for rich people, government officials or criminals hiding their wealth. Nowadays such accounts are available to a lot of ordinary people willing to reap benefits of legal offshore banking. Swiss accounts provide a good place to keep savings if you live in a country with the unstable business environment and political turmoil. Swiss banks are favored due to the safety, security, and confidentiality.

Why Do Expats Need an Offshore Bank Account?

You are a resident of a foreign country, have property overseas, work abroad or you are retired abroad then, yes you might be a potential person who would choose/ need to have offshore banking. I know most probably the majority of people think or at least used to think that offshore banking is for rich people who have millions to manage. Indeed that is not fully a false statement offshore banking is definitely not for everyone. But, let me tell you that an offshore bank account may be opened by an average expat as well. Of course, the next logical question that may pop up in your head is why do I need an offshore bank account and how precisely I can benefit from it?

Let me start by shaking the general idea surrounding offshore banking: an offshore bank account is not exclusively about tax avoidance. No way. Mostly important offshore banking is a safe and modern method way of managing one’s financial means. This would be the first reason for an expat to bank offshore.

Let me now refer to some detailed characteristics of offshore banking, which in a way will reveal the motives of how can an expat benefit from offshore banking.

– Having an offshore bank account is a clear advantage when it comes to the flexibility that you get. Accessing your financial means is very easy to do wherever you are.

– Except for flexibility offshore bank accounts very often come in different currencies. This is very comfortable because for example you can earn your salary or have any other income in a certain currency but for spent money in a different one, especially taking into consideration that you are living abroad.

– Having an offshore bank account in multiple currencies you will save on currency transfer operations.

– Moreover, such accounts usually come with some very good benefits such as no fee for international ATMs card withdrawals.

– You also can get travel insurance which can cover any country in the world that comes hand in hand with your offshore bank account.

– Taking into account that offshore banking is really a modern system such advantages as having 24 hours assistance from an agent is a completely normal phenomenon. Thus, wherever you are and notwithstanding the time zones, an offshore bank account is designed in such a way that you will get support 24 hours and 7 days a week.

– In addition, having an offshore bank account gives you the possibility to have an account manager’s support who will understand your needs and will operate accordingly.

– There is also often the possibility to receive an international credit card if you have an offshore bank account.

– And of course the most important is that offshore banking gives you some taxation advantages.

– Another relevant benefit that comes with an offshore bank account is privacy. In case you make a lot of transactions and financial operations between different accounts, different currencies, different jurisdictions then definitely such an account will suit your needs.

All in all, these are the most evident benefits that come with an offshore bank account and can lure you in having one, of course, if your needs dictate that.

Singapore Financial Center

As a rule, offshore banking Singapore is operated by the Asian Currency Units. According to Article 77 paragraph 5 of the Banking Act, they represent operational units whose function is to conduct business in the Asia Dollar Market. According to Article 77 paragraph 1 of the Banking Act, the offshore banking units must be licensed by the central bank of Singapore which is called the Monetary Authority of Singapore.

Actually Asian Currency Units may also be operated by onshore commercial banks and merchant banks. In these cases, Asian Currency Units are distinct accounting entities but they are not distinct legal entities separately licensed by the Monetary Authority of Singapore.

Nearly all commercial banks and merchant banks in Singapore operate Asian Currency Units.

If talking about the offshore banking services delivered by the Asian Currency Units then it has to be mentioned that they accept deposits and make loans in foreign currencies and are not allowed to do business in Singapore dollars.

As any offshore banking centers in Singapore, there are also convenient fiscal regimes and regulatory frameworks that apply to offshore banking Singapore activities. Transactions conducted under the auspices of the Asian Currency Units qualify for tax incentives. Also, the Asian Currency Units are exempted from several prudential legal requirements. Most importantly the rule regarding the reserve requirements, the minimum liquid asset ratio, limitation in investments, limitation on acquisition of immovable property and some of the limitations on credit facilities are some of the legal rules that are applied in a flexible way to offshore banking. It is also important to mention that there is no withhold or income tax on nonresident Asian Currency Units’ depositors. The Asian Currency Units are taxed at a concessionary rate of 10 percent. The normal corporate tax rate in Singapore is 26 percent.

Except the fact that the Monetary Authority of Singapore grants the license for the offshore banking units, the Asian Currency Units have the legal obligation to present monthly detailed financial statements to the central bank. It is the Monetary Authority of Singapore which supervises offshore banking units’ activities.

The domestic legislation does not impose a formal insurance scheme for offshore banking units. The central bank has the power to act as the lender-of-last resort, but there is no such obligation.

In 1996 following an Amendment of the Banking Act, the foreign regulators were allowed to inspect the Singapore banks under their oversight.