Like HowStuffWorks on Facebook!

How Swiss Bank Accounts Work

Swiss Bank Accounts, the United States and Beyond

There are no restrictions in the United States against having a Swiss bank account, or any other offshore account for that matter. But, current IRS regulations require U.S. persons to reveal all foreign accounts when they file their annual income tax if more than a total of $10,000 is held in overseas accounts.

Additionally, as a U.S. citizen, green card holder or other subject to U.S. tax, if you invest in American securities through a Swiss bank account, you must declare it to the IRS.

This regulation doesn't apply to any other securities, so if a U.S. person buys British stocks from his or her Swiss bank account they will not pay any tax in Switzerland and will continue to enjoy Swiss bank secrecy.

Other "Secret" Banks

There are a number of countries with banks offering secrecy and "tax havens." The most common ones include:


Anguilla is a British territory in the Eastern Caribbean. It's considered an offshore business center and a tax-free zone.


Belize has offered offshore banking since 1995. Accounts maintained with these banks are not subject to local taxes and their customers are given privacy concerning their account. If the Belize courts find that funds are coming from criminal activity, however, the banks are required to release the identity of the account owner.


Banking secrecy in the Bahamas is not as strong as other countries that offer it. New banking legislation allows banks in the Bahamas to divulge the fact that a particular person or company has an account with that bank.

Cayman Islands

The Cayman Islands have extensive privacy laws related to banking, and, like Switzerland, officials that break the secrecy law face imprisonment.


Panama is seen by many as a very stable country offering bank privacy.

For lots more information on Swiss Bank Accounts and related information, check out the links on the following page.