Numbered bank accounts don’t just exist in the movies. Discreet private banks are opening secret numbered bank accounts for their privacy-conscious wealthy clients more than ever before. Secret numbered accounts don’t just exist in Switzerland, but also in the best offshore banks in other European private banking havens including Austria, Singapore, Monaco and Andorra.

The main reason for this is probably recent high-profile data thefts by corrupt bank employees, hoping to turn a quick penny by turning over stolen data to foreign governments. A numbered bank account offers protection against the theft of data by corrupt bank employees. Although the holder’s identity is known to the bank, the files are kept in a safe using a paper based system accessible only to a few highly-trusted private bankers – typically the relationship manager and the branch manager. Anyone who may have access to the bank’s computer records only gets to see an account number – not a name.

Private bankers don’t, however, like to talk about these accounts!

“These accounts are subject to exactly the same duty of diligence as any other banking relationship,” UBS spokesman Dominique Gerster told swissinfo.ch. “We are obliged to know the origin of the funds and the identity of the beneficiary. If we receive a legal request, we can supply the authorities with information, just as we can for any other account,” he is reported as saying.

“We always know the identity of our clients, whether the account is a numbered one or not,” commented Jan Vonder Mühll, head of media relations at private bank Julius Bär in Zurich, in the same article.

“A colleague from another branch of our bank couldn’t discover the identity of a client who has an account with us,” an asset manager at the Ticino branch of a  Swiss co-operative bank told the swissinfo reporter. “Foreigners are now going for numbered accounts as a precaution…”

Apparently, smaller banks, particularly the independent co-operatives such as Raiffeisen banks, and the state-owned Swiss Cantonal banks which are both seen as bastions of strength, are profiting from the huge capital outflows at big international Swiss banks like UBS and Credit Suisse. Depositors feel safer dealing with smaller, more personal banks that better reflect the Swiss banking traditions of yesteryear.

“There’s no doubt that given the attacks by the Italian government in particular, or to ensure that their details do not fall into the hands of some untrustworthy bank employee, our customers are becoming more and more demanding as far as confidentiality is concerned. And there is nothing better than a numbered account to respond to their expectations,” he explained.

Fortunately, the article also points out that it  is not only for tax reasons that clients of private banks are looking for numbered accounts:

In cases of divorce, inheritance or even blackmail it gives the holder additional protection. If there is a court case, the plaintiff has to name the bank where he believes the funds in question are held before proceedings can go ahead. And that is a major advantage for potential victims of blackmail, such as politicians or celebrities.

Most bank orders pass through several hands within a bank and any bank slip normally includes the client’s name and address, but a numbered account avoids these risks.

Who can open a numbered bank account? Almost anyone with a private bank account in one of the European offshore banking centres can qualify for this type of account. Like anything else, it’s a service that costs money and the banks will charge extra for the additional administrative burden involved. But it’s not a service that is advertised in flashy brochures at the counter. It’s a matter of knowing who to ask.

More information on numbered bank accounts can be found in the Practical Offshore Banking Guide, available free to members of Q Wealth. Not yet a member? Click here to see what you are missing!

by Peter Macfarlane

There’s a lot of misconceptions out there about offshore banking and investing. Newer readers especially may believe a few of the myths exploded below! Even if you’re an old hand at offshore banking, I thought you might enjoy this brief list of some of the most common offshore banking myths…

1. Offshore banking is illegal. The Facts: Granted there are a few countries in the world that outright prohibit their citizens from holding accounts abroad. But very few – even those with strict controls like South Africa, Venezuela and Russia don’t ban their citizens outright from holding offshore bank accounts. Most countries do however have laws insisting that you report your offshore bank accounts to the tax authorities. You can easily verify these requirements with a local professional.  For sure there are some illicit funds deposited in offshore banking havens, but they constitute a small percentage of total criminal proceeds held in banks within high-tax jurisdictions. Bank secrecy laws these days definitely do not protect criminals. The idea of associating offshore banking with crime is all about trying to persuade people to leave their funds where their governments can get their hands on them!
2. Offshore banking is only for tax evasion. The facts: Recent campaigns by major governments and left-wing think tanks try to tar everybody with the same brush. Most people who bank offshore these days are not evading taxes. They are looking for legal tax planning and asset protection strategies – for example: currency diversification, and protection against political risk factors.
3. To have a bank account offshore you need lots of money. The facts: Yes, there are many obscure but very good private banks that won’t be interested in a relationship under a million or two. But there are also plenty of banks, large and small, that are still interested in the regular middle class customer.  At some of the best offshore banks in the best offshore banking countries, you can easily open a bank account with a deposit of $500 or less. There are plenty of options and you will find details in the Q Wealth Practical Offshore Banking Guide.
4. Offshore banks are situated in remote corners of the world or obscure islands, thereby making it difficult to manage the account. The facts: While many offshore jurisdictions are indeed small islands, they are all connected by fiber optic cables! Today, the physical location of the bank is not really important. You can deposit funds electronically and manage them over a secure internet connection. For withdrawals you can wire money out using the internet banking, or you can have an internationally recognised debit or credit card like Visa, Mastercard or American Express.
5. You have to travel to the bank personally to open an account. The facts: The best offshore banks do not require this. They have procedures in place to open accounts either entirely by mail, using copies of documents certified locally, or you can open accounts through other representatives or offices that may be closer to you. Often, if you pay the travel expenses or you are investing a larger amount, you can even have a bank officer travel to visit you.
6. Offshore banking is tax-free. The facts: In most cases you don’t have to pay taxes in the bank’s jurisdiction. The notable exception is Switzerland, which does charge Swiss withholding taxes on the income of foreign account holders. What you do have to remember is that many high tax countries tax the worldwide income of their residents, and one – the United States of America – taxes the worldwide income of their citizens even if they are not resident.
7. Offshore banks open anonymous numbered accounts. The facts: It is still possible in some banks to open numbered bank accounts. Most Swiss banks, for example, offer this facility for a small annual charge. A numbered account is where your name does not appear on the title of the account. However, they are not technically anonymous, since the bank will still need to know who you are. Normally your real identity will only be accessible to a few high-ranking bank officers, and your passport copy will be held in a paper file in the bank’s vault, rather than on a computer where a data or identity thief could potentially download it. So whatever account name or number you are assigned, you will not remain fully anonymous to the bank. It is also no longer permitted to send or receive wire transfers without fully identifying the legal account holder.

Further resources:

For further reading you might enjoy learning about the best offshore banks. If you would like to know more about offshore banking and more generally how to protect assets through international investing, check out our free five part ‘Secrets of the Super Rich’ course. We will be happy to send it to you free and with no obligation whatsoever. We also guarantee not to spam you – we hate spam as much as you do. To receive your free course, sign up here right now: Free Secrets of the Super Rich course

by Peter Macfarlane, Offshore Banking Consultant for the Q Wealth Report

One recurring question we hear almost every day in the wealth management business is “How Can I Open a Swiss Bank account?” Whilst a minority of those asking the question might really be candidates for Swiss private banking, the majority seem to have watched too many Bond movies! This article is a brief introduction to Swiss banking to help you decide which of these categories you fit into.

First of all let me point out that if you are looking for a secret bank account, there are places that are much more discreet, much more under the radar than Switzerland. You’ll find, for example, nine alternatives to Swiss banks which also have that “private banking feel” listed in the Practical Offshore Banking Guide 2009, which is available free to Q Wealth members. This instantly-downloadable pdf guide also explains the truth behind some of the services associated with Swiss banking like anonymous numbered bank accounts (yes, it is still possible to open numbered bank accounts legally as of 2009! – details in the guide)

But what if you have your heart set on a real Swiss account? Opening a bank account in Switzerland is in theory not too difficult – but like all banks anywhere in the world, Swiss banks do reserve the right to refuse customers. Needless to say the recent hoo-hah from the G20 and the OECD has not made it any easier to open Swiss bank accounts. All banks are scared of being accused of money laundering and this has made it much harder, especially for non Swiss residents, to open bank accounts.

Then, you need to choose a Swiss bank according your requirements. If you want traditional private banking service and a free lunch each time you visit your banker, expect to invest at least a million as your opening deposit. Some of these real Swiss private banks are so discreet they don’t even have signs outside their offices, let alone websites.

You can, however, open accounts at more run-of-the-mill Swiss banks with a very low opening deposit or minimum figure to open accounts. Swiss banks like Migros or Swissquote Bank (which is really more of a discount brokerage, E-Trade style) have no minimum opening deposits whatsoever and you can start the process all by yourself – no need to pay an intermediary. The disadvantage is that, well, there is no particular advantage if you see what I mean… this is not traditional Swiss banking at all! There is nothing private about these banks. Swissquote, for example, will require you to waive bank secrecy before you can even open account!

If you have a Swiss work permit and wish to open a local Swiss bank account, that changes things significantly. In order to pay your salary in, your employer will probably require that you have a bank account. But Swiss working papers make all the difference.  Some of the documents you will need, according to expat website AngloInfo, are:

• Passport or identity card
• Recent utility bill (electricity is best)
• Residence permit
• A copy of your work contract
• Cross border workers from France or Germany, a copy of your permis frontalier (cross border work permit)

It is not necessary to make an appointment to open a current account, says Anglo Info. Opening an account can be done in a day and means of payments (like cash cards) will usually arrive within a week to ten days of the account being opened.

In general banks all over Switzerland are open from Monday to Friday from 08:30 to 16:30, and are closed at weekends and on public holidays.

You may, however, not need a Swiss bank account at all. Household bills and invoices are more commonly paid through the post office, with a so-called Bulletin de Versement (bill slip). Bill slips are attached to each bill that you receive by the post.

Below are some links to major Swiss retail banks. Remember these are not the same as Private Banks. If you are a non-resident looking to open a Swiss bank account, you need to be looking at Private Banks since they are the ones that accept non-resident business. To sign up for our free newsletter on Asset Protection and Private Offshore Banking, visit our Q Bytes page.

Major Swiss Banks

• Banque Coop
• Banque Migros
• Banque Raiffeisen
• Crédit Suisse
• UBS SA