How to Invest in Switzerland as a Foreigner
(A Beginner’s Guide)
If you are investing in Switzerland as a foreigner, you are not alone.
30% of all offshore money in the world is invested with Swiss banks.
All these offshore investors owning so much money can not be wrong. Switzerland is a safe-haven country.
You can choose among 286 banks and 2,500 independent asset managers.
With such a large choice, you may ask yourself:
- Which Swiss banks are safe?
- What is the best Swiss bank for me?
In this Article, I will guide you through the investment jungle and how to invest in Switzerland as a foreigner but successfully. I will show you a tested way. You will discover the safest way to invest in Switzerland as a foreigner.
I advised a few hundred happy clients who became successful investors in Switzerland. Stay with me.
My name is Enzo Caputo. I am an asset protection and banking lawyer advising private clients from all over the world. I am the owner of the boutique law firm Caputo & Partners and the founder of swiss-banking-lawyers.com, the place where successful international business people find tips and solutions to better protect their assets with Swiss banks and pay less tax.
Autor: Enzo Caputo
Banking Lawyer since: 1986
Position: Founder & CEO of the
Boutique Law Firm Caputo & Partners
Updated on: 13.05.2022
- Remember: time, not timing, is what matters
- Timing the market vs buy and hold
- Investment opportunities in Switzerland
- How to buy gold and silver for investment
- Invest your Money in Investment Funds
- How to buy Swiss stocks
- Are Bonds a Good Investment in 2022?
- How to Buy ETF in Switzerland (Exchange Traded Funds)?
- Is it Smart to Invest your Money in Real Estate right now?
- Invest your Money in Cryptocurrencies
- You can Invest your Money in your Bank Savings Account
- So, how to invest in Switzerland as a foreigner?
- What is the minimum balance to open a Swiss bank account?
- Why are the family offices managing the money of wealthy families engaging external asset managers?
This article is based on the following video:
📌 [1.] Remember: time, not timing, is what matters
Is now a good time to start investing or should you wait until the economic situation has changed?
The truth is that nobody knows the right time.
Experts are making forecasts that you can consider but even their timing can be wrong.
For example, 20 years ago, experts judged Google and Amazon as high-risk investments. Anyone who invested in Google and Amazon stocks in the early days became a millionaire.
Picking the next winning stock can be like finding a needle in the haystack. This is why successful Swiss asset managers always recommend the buy-and-hold strategy with well-diversified high-quality investments.
Do not invest in one shot. Do it step by step, based on installments in different periods.
Remember: diversification helps against volatility, uncertainty, complexity and ambiguity.
📌 [2.] Timing the market vs buy and hold
Your circumstances are much more important than the markets. It is important to understand that your money may be invested and blocked for a long time. You should invest money you don’t need to pay your bills.
If you invest in the stock market, you need a substantial amount of money for at least 5 years. You have to be sure that you won’t need that money for at least the next five years.
If you don’t feel comfortable with a long-term investment, it is not the right time for you to invest. It’s important to know that you are never too young to start investing. If you start early, this will have a positive impact on your wealth.
Based on the historical performance of investment accounts, you can expect to make an average return of 7% per year.
Leaving your money in your bank account means that your savings lose value over time. The prices increase faster than the return you’ll get from the money in your savings account. Leaving your money in a savings account means reducing the purchasing power of your money over time.
During the last 13 years, my best-in-class asset managers made 8 to 12% a year on average. I will explain more about how to find an external asset manager who gets results later in this Article. However, opening an investment account is imperative if you want to protect the purchasing power of your money.
📌 [3.] Investment opportunities in Switzerland
Before making investments, you need to know the most common investment opportunities in Switzerland like:
- Real Estate
- Gold & Silver
I will explain these very common asset classes in this Article.
More exotic investment opportunities such as commodities, art, luxury watches, classic cars, historical documents, Roman gold coins, and diamonds are excluded or explained in my other videos.
I will show you the pros and cons of the most common asset classes.
What’s the best way to invest in Switzerland 2022?
Read this Article until the end to find out how my non-resident and very happy clients are successfully investing in Switzerland. Find out how they found the safest Swiss bank and an asset manager that delivers results.
📌 [4.] How to buy gold and silver for investment
People have been investing in gold and silver for 5,000 years, and this will become even more popular as the world is becoming more insecure.
Gold and silver are widely known as safe investments in uncertain times. It’s one of the few investments where you can’t lose everything. It’s impossible to end with a total loss.
Gold is a safe-haven currency similar to the Swiss franc.
In this video, I talk to a good friend of mine, Olivier Chédel (Swiss wealth manager with over 30 years of experience), about how to invest in physical gold:
📌 [5.] Invest your Money in Investment Funds
What is an investment fund?
A fund is a collective investment company where your money and the money of other investors are pooled together. The fund manager is managing the fund. He makes the buy and sells decisions for you.
Let’s assume that you have a UBS non-resident bank account. It’s a tremendous mistake to not outsource the asset management services to an external asset manager. You can be pretty sure that your portfolio will be overloaded with indirect investments, with the funds issued by UBS.
Conflict of interest situations will destroy the performance of your portfolio. Your UBS private banker will look after his bonus. He will sell exclusively the financial products and investment funds issued by his bank.
According to my case studies based on 115 real existing portfolios, direct investments in the best Swiss stocks are outperforming indirect investment in funds by far.
Indirect investments are super expensive. They make money for the bank but not for you. The bank will collect the intransparent fees and destroy your returns.
Read what I discovered after having analyzed 115 real existing portfolios.
📌 [6.] How to buy Swiss stocks
Buying Swiss stocks means participating in a company’s success by being a co-owner of the company in Switzerland. Thanks to digitalization, the Swiss stock market has become easier and more cost-effective.
Stock investment in Switzerland with the best Swiss stocks is a low-risk investment. Companies like Roche, Novartis, and SwissRe are dividend-generating Swiss blue-chip stocks for the long run.
Please check my video on how to invest in the Swiss stock market.
📌 [7.] Are Bonds a Good Investment in 2022?
Buying bonds in Switzerland was considered a safe investment. Swiss government bonds are the safest bonds you can invest in.
Swiss government bond yields are very low. Investing in corporate bonds is much more lucrative but there are more risks involved.
Bonds are debt obligations. You loan an amount of money to a company or government and you will receive the same amount back after a certain time, including a yield. The difference is that you can buy and sell bonds on financial markets at any time.
Because of the low-interest rates, investing in bonds is not attractive. As the interest rates are increasing simultaneously with growing inflation, bonds will become much more attractive again.
However, I would not invest in bonds in these uncertain times of war in Ukraine and inflation. I would wait until we will have peace in Ukraine and we will have a more clear picture of inflation.
📌 [8.] How to Buy ETF in Switzerland (Exchange Traded Funds)
ETFs are very popular. Are you looking for the best ETF in CHF as an investment in Switzerland?
What is an ETF in stocks?
An exchange-traded fund (ETF) is security with pooled investments that operate similarly to a mutual fund. ETFs in stocks is an exact copy of an index like the S&P 500.
In Switzerland, you can buy ETFs as a foreigner. There are no restrictions for foreigners.
📌 [9.] Is it Smart to Invest your Money in Real Estate right now?
Switzerland has very high rents compared to Europe. A lot of people in Switzerland are considering investing in their property. You should buy a house for your family without treating it as an investment.
As a non-resident foreigner, you are not allowed to buy your own home. You can invest in commercial properties only.
The returns from real estate investments in Switzerland are modest. Smart investors are very selective about the location of the property. If you choose to invest in a central location, you will realize a substantial capital gain. Choosing the right location is of exceptional importance.
Good investments are accessible only off-market. As a foreign investor, you need professional advice.
📌 [10.] Invest your Money in Cryptocurrencies
Are cryptocurrencies such as Bitcoins, Ethereum, Tether, Binance Coin, USD Coin, Terra, and XPR a hype that you should avoid, or is it an imperative investment for the future?
As some investors became millionaires very quickly investing in cryptocurrency, many others have lost everything. If you invest your money in cryptocurrency you have to be very careful.
Because of the low level of regulation, there are many scam artists and other criminals involved in cryptocurrencies. In my view, investing your money in cryptocurrencies is equal to wild west banking.
Governments can declare cryptocurrency investments illegal overnight. You can lose your investment in cryptocurrencies instantly. There is no protection against it.
📌 [11.] You can Invest your Money in your Bank Savings Account
Many people are convinced that keeping money in a bank savings account has nothing to do with investing. That’s not true.
Let me give you an example:
When the Euro was launched in January 1999, one Euro quoted one Swiss franc and 61 cents. We will have parity. One Euro is quoting one Swiss franc only. Just by investing your capital in Swiss francs, instead of Euros, in your bank savings account and leaving it without investing in stocks, the capital gain is 61%.
Since many people are just keeping their life savings in their Savings bank account, my advice is to invest in Swiss francs, a safe-haven currency.
📌 [12.] So, how to invest in Switzerland as a foreigner?
As a foreigner, you are not familiar with Swiss banking. Most customers do not know how to judge the safety of a bank. The best Swiss bank account for foreigners has to be opened with one of the safest Swiss banks.
We at Caputo & Partners know how to measure the safety of a bank. We are focused on the safest Swiss banks only. Our Swiss private banks do not have a leveraged balance sheet.
Only the strongest capitalized banks with a tier-one capital ratio exceeding 20% are good enough for our clients. UBS and Credit Suisse have a tier-one capital ratio far below 20%.
For our clients, we suggest Swiss banks not be involved in derivatives, not in investment banking, not in risky lending activities, not issuing letters of credit, no bank guarantees, etc.
We prefer Swiss private banks with the core business of wealth management. Avoid using an offshore company as the account holder. The Swiss bank account has to be opened directly in your name. It will ensure direct control over the assets.
We propose Swiss private banks tailor-made to your needs and expectations. Normally, we propose 3 to 5 very strong capitalized Swiss private banks. You will make the final choice.
📌 [13.] What is the minimum balance to open a Swiss bank account?
You need a diversified portfolio with a multi-currency account.
The minimum balance should be 500,000 CHF to ensure proper diversification.
Spreading your direct investments across countries, sectors and industries is imperative. To achieve a suitable diversification with direct investments you need a minimum capital of 500,000 CHF.
📌 [14.] Why are the family offices managing the money of wealthy families engaging external asset managers?
The answer is very simple.
External asset managers are delivering much better results than banks.
We tested the performance of the last 10 years of 115 real existing portfolios.
We discovered that external asset managers, also known as independent asset managers, are performing 4 times better than asset managers employed by the Swiss banks.
Of the best portfolios outperforming the benchmark, only 20% were banks while 80% were independent asset managers.
Our best-in-class asset managers generated between 8 and 12% return per year on average, for the last 13 years.
If you are interested in knowing the exact figures, please read our article “Independent Financial Advisor in Switzerland”. What we have discovered will shock you!
The external asset managers have a limited power of attorney on your account. They are allowed to manage your wealth but they are not allowed to take money away. The asset management agreement with the asset manager can be cancelled at any time.