Secrecy Banking Moves From Switzerland To Hong Kong

Andra Marinescu

Written by Andra Marinescu
Posted in: Business
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Grand Cayman. Also a place known for its banking secrecy

London, New York and Hong Kong control, together, over 70% of the global market share.
After the attacks launched by the tax authorities in the U.S. and Europe on Swiss bank UBS, has talked extensively about the end of bank secrecy. But capital needs alternative, found in banks in Singapore and Hong Kong. In other words, Asia is likely for people with money to become a second Switzerland. Especially since, according to the latest ranking of the world financial center, Hong Kong climbed to 3rd place, after London and New York.

Asia specific legislative framework provides storage services with a high degree of banking confidentiality. This is exactly what the rich world’s great looking. “Hong Kong offers investors a tax system that allows the placement and management of large sums of money to the local stock market, financial monitoring and a rather anemic economy liberal criminal law,” the analysts noted, estimating that for big capital, Asia will become a Second Switzerland.

In addition, unlike Switzerland, where there are differences between banking institutions and state authorities on the issue of banking secrecy is total consensus in Hong Kong. Swiss structures troubles began with the opening, by the Department of Finance of the U.S., criminal investigations, first against UBS and other institutions then. U.S. data on the required U.S. citizens suspected of tax evasion. In 2007, UBS has provided the requested information for nearly 4,500 American depositors. The result was that over the past two years, UBS has lost deposits of nearly $ 200 billion. In Hong Kong does not apply to taxes on capital or interest on the deposit. In addition, income is taxed only in Hong Kong. Moreover, there is the possibility of opening front companies used in the practice of tax evasion.

Safe places for business and wealth

Analysts say, in context, the banks will be open in Asia, in fact, Swiss origins. In all likelihood, they will operate as “branches” of the Swiss structures. Do not forget that the same holds UBS in Singapore, a training center for future bankers. Interestingly, private banking services are mainly provided by UBS, Singapore where the government has a stake of 7%. It is expected that as access to banking secrecy will be simplified in the states as “oasis of peace” for private equity, more European banks to establish their representative offices in countries with lenient tax regime.

“Extending this European banking institutions in Asia shows that bankers do not exclude a tightening of control by tax authorities in their countries of origin and, therefore, prepare” auxiliary runway landing “for their clients’ money, experts say. Especially as more and more Asian governments have begun to implement programs to stimulate the economy with public funds. As such, the experts concluded, the side effects of this reality can become partial withdrawal of banking business in countries like USA, Germany, France or Great Britain, countries that were less affected by the global crisis and offers fair conditions of work with great clients.

In search of wealthy clients

On the other hand, the shift is caused by the Asian area including growth in the region, the number of wealthy clients. A segment that promises a faster development than the U.S. or Europe. Therefore, banks will try to approach these clients, sooner than others to occupy this niche market. Against this background, it bears noting that in recent ranking of global financial centers, top cabinet consists of Z / Yen Group based on several criteria such as status or access to market infrastructure, Hong Kong climbed to position 3, shortly after London and New York.

“There are few differences between London and New York. Consult specialists in finance cherish financial markets believe that the two work together for mutual benefit, “notes the report of the Z / Yen Group. “Hong Kong is regarded as a true global financial center. And Singapore will soon join this trio, “says the study. Singapore has the fourth step, followed by Tokyo, Shanghai, Chicago and Zurich. “The top four markets controls much of the financial transactions (over 70% market share) and are more likely to become in the future, the most important financial markets,” says the document.11

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