Opening a bank account in Switzerland. How does the Swiss banking system work?

Switzerland is a unique country, both in terms of its history and culture, as well as when looking at it from a purely financial point of view. It is a small country with the bordering states providing an influence of three large cultural circles, i.e. France, Germany and Italy. It is neither a member of the European Union nor the European Economic Area, and yet it is one of the richest countries in Europe. All thanks to its highly developed banking system. How to open a bank account in Switzerland? Can anyone do it?


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How does the Swiss banking system work?

The current banking system in Switzerland is a consequence of its geographic location. After all, it is a small country situated in an alpine landscape with little agricultural potential. Additionally, there are no natural resources and no access to the sea. Inevitably, such circumstances forced the Swiss to be extremely thrifty and serious about money-saving. These are cultural factors that have a direct impact on the current nature of Switzerland.

The beginnings of banking in Switzerland

Hard work combined with a small internal market meant that this country quickly opened up to trade and financial cooperation with other states. The tendency of Swiss people to save contributed to the fact that as early as in the 16th century they began to lend money to foreign governments.

It should be mentioned, however, that the banking system in terms of organisation began to develop there only in the 18th century and is closely linked with the city of Geneva. It was local bankers who lent money to European rulers, including the kings of France and England.

Over time, other cities also began to gain importance in the financial environment. Basel became the most important financial centre in the 19th century. The 20th was a period when Zurich gained the greatest importance and this has not changed to this day.

How is capital created in Switzerland?

The process of capital formation in Switzerland is a separate issue. It is closely associated with the fact that the inhabitants of this country are extremely hard-working and this also affects the great precision of Swiss employees, as well as great sensitivity to ethical and moral standards. For this reason, over the years, Switzerland has developed niche industries in which it quickly became the world leader. Classic examples are, for example, Swiss watches, chocolate or, recently, medical devices.

The success achieved in market niches resulted in an inflow of cash to this country. However, as numerous examples from around the world show, the inflow of funds is not always associated with the accumulation of capital. In the case of the Swiss, it would not be possible without the above-mentioned tendency to save money, which is expressed in the savings ratio, which amounts to over 20% being a phenomenon on a global scale.

Modern-day banking system

Precision, hard-work, willingness to save as well as compliance with the applicable standards and procedures are the qualities that characterise the best financial institutions. The Swiss display these features and therefore enjoy the great trust of foreign investors who willingly invest their capital there. It is not surprising that over the centuries, the banking system has developed so strongly in Switzerland, and to this day it is one of the best-organised systems of this type in the world.

The banking model in Switzerland

The entire banking system in Switzerland is based on the universal bank model. In practice, this simply means that any Swiss financial institution can offer a full range of banking services. However, as it happens in every area of ​​activity, institutions specialising in various types of products and market segments have also appeared in the Swiss financial sector. At the moment, the banking system in this country can be divided into the following categories of banks:

● Cantonal banks,      

● Large banks,      

● Regional banks and savings banks,      

● Raiffeisen banks,      

● Other banks,      

● Branches of foreign banks,      

● Private bankers,      

● Banks performing special tasks.      

It is interesting to note that as much as 67% of shares in this sector are owned by only two banking groups: UBS AG and Credit Suisse Group. The great importance in the Swiss banking system is also associated with a huge impact it has on the global market. The largest banking groups in Switzerland have an extensive network of banking branches all over the world. They provide services primarily to foreign entities, in the area of investment banking, private banking, securities trading, foreign exchange transactions, precious metals transactions, etc.

Swiss banks have a slightly different scope of competence when it comes to their domestic market. Their activities are limited to mobilising savings, granting loans to large enterprises and state institutions, real estate financing and asset management. The very nature of the banking sector works in the same way to the Swiss mentality. Colloquially speaking – the Swiss do business outside the country, and accumulate and invest the acquired capital at home.

The biggest Swiss banks

It is also worth noting the largest Swiss banks. Apart from the two groups mentioned above, UBS AG and Credit Suisse Group, the third powerful bank is the well-known Raiffeisen Group. However, this is not all, because in addition to the above three entities, 189 other banks also carry out their financial activities but their share in the Swiss sector is small, amounting to only 13.4%. The category of other banks is dominated by foreign capital and covers 122 entities in total. They are mainly owned by investors from the United States, Canada, Japan as well as from the EU member states.

Furthermore, it should be stressed that virtually all banks that are important in any way on the international market have their representative offices in Switzerland. However, their activities are limited to serving foreign clients and conducting international banking activities. The services involve deposit and lending activities to a smaller extent. Their presence on the Swiss market is therefore more a matter of image than actual earnings, although they cannot complain about the lack of profitability of such activities. Ultimately, the banking sector in Switzerland accounts for around 10% of the country’s total GDP.

Who can open a bank account in Switzerland?

The Swiss banking sector is highly dynamic. Who can open a bank account in Switzerland? It is a common opinion that having such an account is synonymous with prestige and luxury. There are many reasons for this, especially in relation to people who are not tax residents in Switzerland. Theoretically, it is possible, but if you are planning to do so, you have to realize that you will need at least CHF 500,000 to even think about setting up an account. In some banks, this requirement is half that amount. It may also turn out that some entities will apply much lower financial criteria. In most cases, however, there are additional conditions that the account holder must meet, e.g. an obligation to increase the funds deposited on the account.

Is it possible for anyone to open a bank account in Switzerland?

Basically, apart from the requirement to have an adequate amount of cash, there are no major requirements to open a bank account in Switzerland. However, it is worth remembering that each bank follows its own rules, which means that different institutions may adopt different criteria. Some will be more restrictive of the submitted applications, others will be less strict. Also, keep in mind that the bank may refuse to accept cash from you if it suspects that it originates from criminal activity.

Significant restrictions may apply, for example, to people who do not have a permanent or even temporary residence address in Switzerland. If you belong to this group, you will be unable to open an account at a UBS bank. Theoretically, you have the best chance at Aargauische Kantonalbank, Credit Suisse and PostFinance, which are legally obliged to ensure that anyone interested can open a bank account.

Moreover, even with Swiss F (temporary), N (asylum-seeking) or S (asylum-seeking) ID cards in most banks, you may be unwelcome. Such rules were adopted, among others, by Raiffeisen, Berner Kantonalbank and St. Galler Kantonalbank for which these types of evidence do not constitute any proof of identity. It is similar in other institutions, hence the need to get acquainted with the offer of as many of them as possible in order to open a bank account in Switzerland.

How to open a bank account in Switzerland?

Each bank may also specify a different procedure for setting up a bank account in Switzerland. Some entities offer the possibility of completing the entire procedure online, although these are rare cases. The vast majority of institutions will require you to visit a branch to submit all the necessary documents. What documents are required? This is also regulated separately by each bank.

Standard process for opening a bank account in Switzerland

The basic procedure for opening a bank account in Switzerland is to verify your identity. It usually takes place at a branch, therefore banks will require you to visit a branch in person when submitting the application. You must have an ID card or passport with you if you are not a citizen of the EU or an EEA country. In some cases, a Swiss bank may require you to submit a reference letter or account statement from the institution where you had deposited your funds in the past.

Translation of required documents when setting up an account in Switzerland

When deciding to set up an account in Switzerland, be prepared that in some cases you may need translation of certain documents. It is difficult to list them all here, because different banks may require different documents. What is more important is the language to which such documents need to be translated. That will depend primarily on which canton you want to finalise the entire process in.

Theoretically, there are four official languages ​​in this country, i.e. German, French, Italian and Romansh, but they are not officially used in every canton. For example: Uri uses German, similarly to Zurich and Obwalden. Bern and Valais uses two official languages ​​(German and French), while in Vaud and Geneva only French is officially spoken. To make things more interesting, in Ticino the official language is Italian, and in Grisons it is Romansh, German and Italian. So, before ordering a translation service for your documents, first check in which bank you can open an account in Switzerland, and secondly, in which canton you will complete all formalities.

Planning to open a bank account in Switzerland?

The Swiss banking system is one of the most powerful systems in the world. This can be evidenced by the fact that it is responsible for 10% of the country’s GDP, which places it in second place in all economic sectors. Having a bank account in Switzerland is synonymous with prestige and luxury, but opening such an account at a Swiss bank is not the easiest thing to do. Firstly, each bank follows its own specific rules, and secondly, as a non-resident, you must have the appropriate amount of cash.

There are also many difficulties when it comes to translating documents that will be required in the above process. This is because Switzerland has as many as 4 official languages, with each canton usually officially using only one of them. However, bearing in mind the stability of the local economy and banking system, it is worth making the effort and opening a bank account in Switzerland. Especially when you are serious about placing your capital in the most modern and secure banking system.


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