ZURICH (Reuters) – A U.S. tax probe against Swiss bank UBS has killed traditional offshore banking and wealth managers will have to improve their offers to survive, bankers and industry experts said on Tuesday.
ZURICH (Reuters) – A U.S. tax probe against Swiss bank UBS has killed traditional offshore banking and wealth managers will have to improve their offers to survive, bankers and industry experts said on Tuesday.
Offshore private banking involves managing the wealth of rich clients from a foreign location.
However, some clients have exploited the system to avoid paying taxes, especially if carried out in traditional banking secrecy strongholds like Switzerland and Liechtenstein.
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The situation has been thrust into the limelight since Washington accused UBS of using Swiss bank secrecy laws to help wealthy clients avoid paying taxes and forced it last month to hand over some treasured client data.
UBS’s capitulation to the U.S. tax authorities and a global crackdown on tax evasion are denting the allure for banks to shelter untaxed money, experts say.
“The entire offshore banking model seems to be dead,” said Teodoro Cocca, a professor for Wealth and Asset Management at the Johannes Kepler University in Austria.
“Forget bank secrecy and focus on onshore or on tax compliant business,” he told an audience of Swiss private bankers.
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