HOW TO OPEN A SWISS BANK ACCOUNT (TRY IT, YOU'LL LIKE IT)
(FORTUNE Magazine) – Let's say you're not a Nazi, or even a professional Nazi hunter. There's still a certain fascination with Swiss bank accounts. Would it be impolitic to ask whether maybe a lowly, workaday business person might open one--and actually profit from it? We decided to check it out. Hyper-secret "numbered accounts" are what have made Swiss banks famous. Favorites of deposed dictators and fictional spies, these accounts are coded with a number instead of a name. Unfortunately, they're not easy to open. For one thing, they require an in-person appearance in Switzerland (though it would be a great excuse to go skiing in the Alps, wouldn't it?). They also require an initial deposit of at least $100,000 and cost about $300 per year to maintain. Cloak-and-dagger secrecy doesn't come cheap.
But there are cheaper and easier ways to become the James Bond of your dreams--and they all come with the guaranteed Swiss bank secrecy that's been mandated under Swiss law since 1934. Those laws make it a crime for a Swiss banker to divulge any information about a customer's account. (New rules within the past ten years allow U.S. law enforcement officials to pry in the course of criminal investigations, but we'll assume that wouldn't apply to FORTUNE readers.) Aside from numbered accounts, there are three other basic types of Swiss accounts, which several banks, including Credit Suisse and Union Bank of Switzerland, will allow you to open via fax or even old-fashioned mail service. The cheapest: a standard, garden-variety checking account, which can be opened with as little as $3,500. (A friend in Geneva has one with a current balance of just $819.)
Why bother with a Swiss bank account? Even if you have no intention of evading Uncle Sam's taxes or laundering drug proceeds, a Swiss account can legitimately shield the hard-earned fruits of your labor from other people who might want to get their hands on it--including, but not limited to, ex-spouses, greedy relatives, and the neighbors who sue you because their kid tumbled out of your tree. (Consider the fact that more than one-third of the world's lawyers are practicing in the U.S.) An account in historically safe and stable Swiss francs can also be a currency hedge against any decline in the value of the dollar. Of course, the most compelling allure may simply be the thrill of announcing loudly, "I'll have the money wired to you from my Swiss bank account."
There's also no need to stay on the Continent to get a Swiss-style bank account. There are oodles of "offshore banking centers" with laws that mandate vows of silence for bankers. Many are sunny, tropical-island nations that tend to have more banks and letterbox companies than people--the Cayman Islands, the Bahamas, Anguilla, Vanuatu, the British Virgin Islands, and the Channel Islands, to name a few. (The Cayman Islands have actually surpassed Switzerland in total foreign bank deposits, with $504 billion, vs. $415 billion.) The advantage of these offshore banks is not just that a visit to your banker takes you to some of the world's finest beaches but also that they give you access to the best interest rates in the world. Why's that? At the right bank--Barclays Bank in the Isle of Man, for example--you can open an account in just about any liquid currency. Accounts in South African rands, for instance, have recently been paying rates in the 14%-a-year area, as opposed to the meager 1% to 2% at most Swiss banks (which looks even worse after it's taxed at the 35% Swiss withholding rate). Some caveats to keep in mind: The burgeoning offshore business attracts more than just the most upstanding members of society, meaning your fellow depositors may not be people you'd invite over for dinner. At the same time, the impressive-sounding tax schemes promoted by some "offshore specialists" may not hold up under IRS scrutiny.
Two other options for banking privacy: First, a "chop account," the Asian equivalent of Swiss numbered accounts, which have become a status symbol for wealthy in-the-know foreigners in Hong Kong and Japan. The bank gives you a "chop," or a stamp imprinted with a unique and intricate composition of Chinese characters. Chops have been used for centuries by the Chinese as signatures for official documents. There are innumerable ways to create them, which makes them almost impossible to counterfeit, perfect for an anonymous bank account, and great to show off at parties.
But the ultimate bragging point may be to open your very own bank. That's right: For as little as $20,000 in license fees and startup costs, you can set your name glistening in the tropical sun. Management firms that specialize in setting up companies that don't actually produce anything and banks that have a single depositor, charge fees ranging from $5,000 to $10,000 to incorporate your bank and procure you a bank license.
Check out the South Pacific island of Nauru (pop. 9,000), for instance, which offers what amounts to a banking blue-light special. The cooperative Nauru government sells bank licenses at the cut rate of $3,000 and allows new banks the special privilege of operating with no capital at all on deposit for two years.
Having your own bank offers an especially luxurious degree of financial privacy because all transactions, whether investments in the stock market or donations to a favorite charity, will be in the bank's name and not in yours. You could be your bank's single depositor or you could go to the trouble of soliciting other customers. It's your bank, after all. Go ahead and name it Joe's First Federal Bank of Dominica. Even if your name is Ted.