Switzerland’s financial centre may profit from the chaos in Cyprus
For many rich people from emerging markets their investments in Cyprus may seem like pretty bad business. With its low taxes, high yields and weak anti-money laundering rules, the country attracted a considerable amount of money; Moody’s estimates that $31bn alone came from Russian investors. Although many details aren’t still clear, most clients with more than €100k on banking accounts in Cyprus will lose 30 % to 80 % of their assets.
How many of these assets will find their way to safe havens like Switzerland isn’t yet clear. After scandals over tax evasion in Switzerland, banks in the country are looking more closely at foreign investors transferring money into Zurich and Geneva.
“In Switzerland it isn’t illegal for banks to accept untaxed money,” said a spokesperson from the Swiss regulator, Finma. Nevertheless, the Swiss banks have to consider the “legal and reputational risk,” surrounding such untaxed assets. And these are pretty high. The old and traditional Swiss private bank Wegelin had to close its business after accepting untaxed wealth of US clients.
The dramatic events in Cyprus are, however, a strong argument for putting assets in Switzerland with its AAA-Rating and its legal reliability. “Switzerland and its financial centre will definitely benefit by the fact that Cyprus is losing of significance for international corporates and investors after this shock,” tax expert Richard Würmli in Zurich told the Swiss daily Tages-Anzeiger. The newspaper quotes another anonymous insider: “You just have to keep quiet now. What happens in Cyprus is already enough promotion for the Swiss financial centre.”
Jean-Marc Aiello, head of professional banking Switzerland at Randstad in Zurich, agrees: “This highlights the reputation of Switzerland as safe booking centre for offshore assets.”
Aiello said there is already demand for client relationship managers in Switzerland who can deal with clients from emerging markets. “I would be able to place 30 people if I could find the right profiles,” said Aiello. Good senior “top hunters” from 35 to 65 with long-standing client relations and “young hunters” from 30 to 35,” who are able to close deals and are available 24-7 for their clients have good chances."
Employers are looking for relationship managers who can deal with clients from Central Eastern Europe, Azerbaijan, Turkey, the Middle East and Africa, Latin America (especially Brazil) and – off course – Russia. Client relationship managers for Russia are particularly sought by small banks and family offices, said Aiello.