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Banking Law in Switzerland

Banking Law in Switzerland

Updated on Monday 21st September 2015

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Banking-Law-in-SwitzerlandBanking Law in Switzerland

Switzerland is a small but very attractive country for foreign investors mostly because of its banking system. Banking activities in Switzerland are regulated by the Federal Act on Banks and Saving Banks, shortly known as the Banking Law of 1934. Swiss banks were known for their regime of not divulging information about their clients, but in 2009 the Banking Law was amended and Switzerland started concluding tax treaties with other countries that allowed banks to reveal information about the account owners.

The authorization of conducting banking activities in Switzerland

In order to engage in bank activities, there are some requirements to be fulfilled according to the Swiss Banking Law. These requirements are:

  • -          the Articles of Association of the bank must clearly state the business scopes;
  • -          the management of the bank must be separate from the direction, control and supervisory authorities of the bank;
  • -          the minimum share capital injected in the bank must be totally disclosed;
  • -          the manager or administrative authority of the Swiss bank must have an impeccable reputation;
  • -          shareholders that have at least 10% of their capital or have voting rights in the bank are qualified to participate in decision making situation, provided their authority does not have negative consequences on the business’ activities;
  • -          the manager of the bank must hold residence in a place that does not affect his or her activity;

Limited liability companies are allowed to conduct banking activities in Switzerland and will be considered cantonal banks. Also, according to the Banking Law two or more companies are entitled to form financial groups and are allowed to conducts banking activities if:

  • -          one of them is a bank or a securities dealer;
  • -          their main activity is to provide financial services;
  • -          they must be organized as an economic unit.

The Swiss Financial Market Supervisory Authority (FINMA)

The Financial Market Supervisory Authority in Switzerland is the main regulatory body in relation to banking activities and has the following responsibilities:

  • -           issues banking licenses to any enterprise meeting the requirements above;
  • -           performs audits at banks or financial groups;
  • -          releases information to other Swiss financial authorities such as the Swiss National Bank or the Federal Council;
  • -          revokes shareholder rights to vote;
  • -          revokes a Swiss bank or financial group’s license;
  • -          maintains contact with foreign financial authorities;

The Swiss Financial Market Supervisory Authority is composed of a board of directors, an executive board and an extended executive board.

Swiss banking advantages

Switzerland continues to be one of the world’s favorite banking destinations even with the new regulations on bank secrecy. Swiss banks are professional and secure. Moreover, Swiss banking has kept the pace with the new technology and adapted to them. Banks in Switzerland provide nowadays electronic fund-transfer services, encryption security services and electronic signature services for its clients. Switzerland has very strict regulations about banking activities which makes it one of the safest countries for those wanting to keep their assets safe.

If you want to open a business and need detailed information you can contact our lawyers in Switzerland.

 

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