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Swiss Bank Accounts
Old 12-07-2013, 04:29 PM   #1
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Swiss Bank Accounts

My wife and are running into some stiff headwinds establishing a domicile with all the necessary accoutrements (like bank accounts, mortgage) in Switzerland as a direct result of the UBS tax evasion scandal.

Our situation:
  • ME: US Citizen, retired USMC with military pension (50k/yr)
  • DW: Swiss Citizen with US Green Card (for 6.5 years) with an I131 paid for and being processed for extended stay out of US.
  • TDF90221 up to date with Swiss Accounts = 300k, about 100k in savings and 200k in pension products that my wife has had for decades and won't mature until mid 2030's.
  • I'll ER in 2016 but won't need to make a withdrawal for several years as DW wants to work several more years. When we do withdraw CHF/$ it will be in the 2% range, so have no fear of the future.
We have a nice little flat in Switzerland now, DW is working full time as a secondary school teacher and pulling down high 5 figures. I have two more years of work in the US and have just reestablished residency in our rental house for these two years to reopen the 2 in 5 capital gains exclusion (about 200k). Intention is to sell the house after 2 and before 5 years and relo to CH in mid 2016.
Living comfortably, paying taxes both in the CH and US isn't an issue for us, but Switzerland is doing everything possible to make being a US expat impossible, and nearly so even for my Swiss wife. Separation not great, but my job requires extensive long duration travel, so even together we are apart often and this separation is deemed worthwhile for the big payoff of retiring in the Swiss Alps.

Here is the rub:
On the off chance someone on this forum is familiar with Swiss banking, what in the heck in going on?? With a legal residence, a Swiss passport, and proper paperwork on file and no one wants to have ANYTHING to do with ANYONE associated with the USA.

Doing a "Tina Turner" and giving up my US citizenship, besides sucking for me emotionally, would cost me my military pension, so that is a non-starter.

I am quite familiar with the (old) Swiss banking rules, but the rules seem to be changing fast, and not actually laws, but just a philosophy to avoid fiscal contact with anyone with a US connection.
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Old 12-07-2013, 05:12 PM   #2
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I've read quite a bit about this lately.
It seems that the vast majority of Swiss banks will have nothing to do with you. It's essentially impossible today for a US citizen to open a Swiss bank account, and those with long standing accounts are starting to be told they will be closed. It's not just tax issues, but a whole range of financial regulations from the US government that they don't want any part of.

There may be a few small Swiss banks that will deal with you, since you have a Swiss passport, but I would say just forget about any of the major banks there.

The fact is, it's beginning to get a little more difficult for US citizens to deal with banking issues all over the Euro zone as well. Switzerland just happens to be a severe case of this problem, due to their unique situation.
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Old 12-07-2013, 05:41 PM   #3
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One of the problems is FATCA compliance which makes US clients very unappealing for many foreign banks, not only Swiss. I would suggest trying your luck with smaller banks or credit unions.
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Old 12-07-2013, 05:52 PM   #4
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FACTA makes USA persons (citizens or residents) toxic for any foreign bank or financial institution.

FACTA basically forces non-USA financial institutions to act like tax agents for the USA Treasury Dept.

Lots of foreign banks have come to the conclusion that it's not worth dealing with USA persons. Especially with the NSA scandal.
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Old 12-07-2013, 06:07 PM   #5
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The previous comments echo what I've heard elsewhere.
Is it a big deal for you from a practical level? Couldn't you just keep your US accounts (there are a lot of advantages to that--many foreign nationals would love to have access to Vanguard MFs and the ERs they have). You can withdraw cash from ATMs for daily use, find a US credit card with no/nominal foreign transaction fees, and let your wife write any necessary checks/drafts from her account (reimbursed by you, r whatever you guys work out) when necessary for local bills, etc?

I'd think making contact with US expats in Switzerland would offer a lot of ideas for practical ways ahead. Good luck, and sorry you are being made to pay for the misdeeds of others (ain't that always the way!).
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Old 12-07-2013, 06:21 PM   #6
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The idea of using ATM's for withdrawing makes sense and establish a residency in a state that has no state income taxes first. At some point, cash is going to be king once more with all these new rules.

If she has an account on her name, why you can not just make a deposit from bank to bank
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Old 12-07-2013, 11:30 PM   #7
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Based on responses so far, here is a little more info.

Not having an account at all and just using dollars with an ATM works for me, but:
My wife works and has a salary. No one is going to pay in cash or cut a check. I need a place to receive CHF and deposit CHF.
Other in country services, like phone, internet, cable etc are paid for by ACH (equivalent) in CH, so an account is needed.
Mortgage? Currently not possible. I could pay cash, but there are significant CH tax advantages to having a mortgage of 60-70% LTV.

we have accounts now, all at the smaller banks and Post Finance, a quasi-banking entity we actually prefer, but any interface now comes with the inevitable questions about green card holding. Those answers are conversation killers.
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Old 12-07-2013, 11:43 PM   #8
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under a rock? No advice for your situation with the Swiss setup.


Bahamian account and pickup by boat.
I cannot confirm nor deny would I be able
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Old 12-07-2013, 11:56 PM   #9
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The idea of using ATM's for withdrawing makes sense and establish a residency in a state that has no state income taxes first.
Not necessary to "establish residency in a no-income-tax state" before moving abroad and could be detrimental unless you are leaving VA. All you have to do is conform to the tax domicile rules of the state you are leaving. The rules vary considerably from state to state. CA is very aggressive and considers factors such as having friends or using professional services in CA as evidence of an intent to return in the future thereby establishing your tax domicile as CA now. NY is willing to consider you to have terminated your tax domicile in NY state even though you retain property there as long as you do not spend more than 180 days of a year in the state. Attempting to "establish tax domicile" quickly in another state could be considered fraudulent if you have no intent to reside there. VA alone, as far as I know, considers a resident to continue to have a tax liability to VA until such time as he establishes domicile in another state. Apparently a territory will not suffice.

The important point is that the question of state tax liability has to be resolved with reference to the specific requirements of the state in question, not someone's idea of common sense.
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Old 12-08-2013, 12:15 AM   #10
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Hit up the expats.

I won't post details of how to keep your US status in a non tax state due to well this is the internet and never know who's following. Call it being paranoids but it's completely possible an pretty easy.

also see the thread about bluebird cards for living off the grid
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Old 12-08-2013, 02:22 AM   #11
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Have you tried the Swiss branches of US banks? I imagine Citibank has a retail presence in Switzerland.
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Old 12-08-2013, 03:00 AM   #12
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As I have moved around the world, I have found Citi and Hsbc the easiest to work with. I have now consolidated with hsbc - establish an account in the US at premier level (100k deposits or investments) and they will help you do the paper work in other countries to open accounts and credit cards
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Old 12-08-2013, 05:40 AM   #13
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Galeno is 100% correct.

The largest problem is FATCA (although there are others) - it imposes a level of compliance costs on banks and other financial intermediaries for clients who are US persons which not only renders most accounts uneconomic but exposes the banks to real and substantial regulatory risk. The only non-US financial institutions that I have acted for that will accept US persons as clients for banking, investments or other financial services are those which already have a large US client base.
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Old 12-08-2013, 05:47 AM   #14
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As I have moved around the world, I have found Citi and Hsbc the easiest to work with. I have now consolidated with hsbc - establish an account in the US at premier level (100k deposits or investments) and they will help you do the paper work in other countries to open accounts and credit cards
I know you didn't claim this, but I just wanted to mention that I don't think this will work everywhere. For instance, my expat buddy in Hong Kong told me he can't open an account with HSBC there due to being a USA citizen. Here in the Philippines, Citibank is being bought out by a bigger competitor (plus, having a Citibank USA account got you practically nothing with them, anyway). In fact, the bank managers at the local Citibank branch here said it was partly because of FATCA compliance issues (as they are a small player in the Philippines), although I personally am not sure that's really true.

Despite the fact that FATCA is a horrible, overreaching and arrogant law, I don't see it having a big effect here in the Philippines. The banks here are too intertwined with the USA and USA citizen customers and their domestic business is too weak to not comply. In fact, I plan to open another US dollar and Philippines peso account here at a local bank in the next week or so and I don't expect any problems.

Of course, if I got married, my wife would have to report all kinds of personal details to the USA no matter whether she had any connection to there whatsoever.
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Old 12-08-2013, 06:20 AM   #15
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we have accounts now, all at the smaller banks and Post Finance, a quasi-banking entity we actually prefer, but any interface now comes with the inevitable questions about green card holding. Those answers are conversation killers.
I'm sorry to say, your experience in Switzerland is not unique but in fact, very common.

The following is a link to an expat site for Switzerland; there's many Americans commenting here:
Finance/banking/taxation - English Forum Switzerland

This is the section relating to banking and taxes, and you'll find many threads relating to banking problems experienced by US citizens, green card holders, and the problems for Swiss nationals married to an American. The general consensus is there are only 3 of the major banks now willing to open new accounts for Americans. Most Kantonal banks won't touch you unless you've had an account in existence for a number of years, and even then the account may be closed.

The Swiss have signed a Model 2 IGA (intergovernmental agreement) for FATCA which means the banks report directly to the IRS without the Swiss tax authorities being involved. There is a petition being circulated today asking for a national referendum repealing the agreement but it requires 50,000 signatures.
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Old 12-08-2013, 10:37 AM   #16
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I know you didn't claim this, but I just wanted to mention that I don't think this will work everywhere. For instance, my expat buddy in Hong Kong told me he can't open an account with HSBC there due to being a USA citizen. Here in the Philippines, Citibank is being bought out by a bigger competitor (plus, having a Citibank USA account got you practically nothing with them, anyway). In fact, the bank managers at the local Citibank branch here said it was partly because of FATCA compliance issues (as they are a small player in the Philippines), although I personally am not sure that's really true. Despite the fact that FATCA is a horrible, overreaching and arrogant law, I don't see it having a big effect here in the Philippines. The banks here are too intertwined with the USA and USA citizen customers and their domestic business is too weak to not comply. In fact, I plan to open another US dollar and Philippines peso account here at a local bank in the next week or so and I don't expect any problems. Of course, if I got married, my wife would have to report all kinds of personal details to the USA no matter whether she had any connection to there whatsoever.
I probably should have mentioned that i am HSBC Premier with accounts in several countries, including the EU. Unfortunately, Switzerland stands alone. None of the "big banks" are represented here, except for some serious HNW private banks. HSBC has a private banking service here, but you have to plop down 2mil to be eligible, and that was before this all started. I bet they have clamped down as well.
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Old 12-08-2013, 11:09 AM   #17
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TDF90221 up to date with Swiss Accounts = 300k,....
Glad to see TDF90221 is being filed (now FinCin 114). With the amounts you're discussing, Form 8938 may also be required whether filing married/separately or married/joint. It started with the 2012 US tax year, and the penalty for not filing is also $10,000.

HSBC decided to close certain "HNW personal banking accounts" about 18 months ago in the EU that had a 'US Person' tie.
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Old 12-09-2013, 11:39 AM   #18
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Galeno is 100% correct.

The largest problem is FATCA (although there are others) - it imposes a level of compliance costs on banks and other financial intermediaries for clients who are US persons which not only renders most accounts uneconomic but exposes the banks to real and substantial regulatory risk. The only non-US financial institutions that I have acted for that will accept US persons as clients for banking, investments or other financial services are those which already have a large US client base.

Just curious, but why would a bank that has no ties to any US bank etc. be concerned with FATCA

IOW, if I were a Swiss bank (or any other country) and had zero assets in the US, what can the US do to me in Switzerland
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Old 12-09-2013, 11:48 AM   #19
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Just curious, but why would a bank that has no ties to any US bank etc. be concerned with FATCA

IOW, if I were a Swiss bank (or any other country) and had zero assets in the US, what can the US do to me in Switzerland
It is rather what the US can do to the bank, i.e. cut it off from access to the US banking system, and thereby effectively kill it. This means that they would for example not be able to send or receive wire transfers from a US bank.
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Old 12-09-2013, 01:11 PM   #20
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USAmericans don't understand the level of control the USA has over the rest of the world.

E.g. USA treaties and financial regulations makes getting and keeping a local bank account for a CITIZEN of my country very difficult. To comply with USA anti-money laundering regulations, my wife and I have to have a CPA certify our financial life every year so we can use our bank accounts.
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