Americans opting for Swiss offshore company formation

15/10/2008

American high net worth individuals are setting up offshore companies in Switzerland in increasing numbers.

When America's IndyMac Bank failed, many savers lost their uninsured deposits. Switzerland, on the other hand, offers some of the safest banks without exposure to the troubled US sub-prime mortgage market.

It is usually necessary for Americans to establish offshore companies in order to move their money out of the country. They can then move their money into a bank account in the offshore company's name.

Switzerland depositor protection is regulated by the Swiss Bankers Association's Depositor Protection Agreement, and forms part of the Swiss Banking Act, which guarantees all deposits - something neither the US nor the UK government have gone so far as to do.

The Swiss Bankers Association's Depositor Protection Agreement is a self-regulatory measure that its member banks accepted in 1984. In addition, Swiss law requires high capital adequacy of its banks.

The Swiss franc is generally considered one of the world's safest currencies. It is barely affected by inflation and has been historically backed by 40 percent gold reserves at the least. Currently the Swiss franc is trading at 1.97 to the pound, compared with 2.41 this time last year.