A potential lurch to the left in Germany’s election on Sunday is scaring millionaires into moving assets into Switzerland, bankers and tax lawyers say.
If the center-left Social Democrats (SPD), hard-left Linke and environmentalist Greens come to power, the reintroduction of a wealth tax and a tightening of inheritance tax could be on the political agenda.
“For the super-rich, this is red hot,” said a German-based tax lawyer with extensive Swiss operations. “Entrepreneurial families are highly alarmed.”
Photo: Reuters
The move shows how many rich people still see Switzerland as an attractive place to park wealth, despite its efforts to abolish its image as a billionaires’ safe haven.
No country has more offshore assets than Switzerland and inflows accelerated last year, to the benefit of big banks such as UBS, Credit Suisse and Julius Baer.
Geopolitical tensions and fears of the COVID-19 pandemic’s economic fallout made Switzerland’s political stability attractive.
Bank for International Settlements data show deposits of German households and companies at banks in Switzerland climbed almost US$5 billion to US$37.5 billion in the first quarter, and this does not include shares, bonds or financial products.
More recent figures are not available, but insiders say the inflows have continued.
“I have booked an above-average amount of new money as in the past three months,” said a veteran client adviser at a large Swiss bank who deals mainly with Germans.
“Many wealthy people, especially entrepreneurs, fear that there will be a lurch to the left in Germany — no matter how the elections turn out,” said Florian Durselen, head of Europe at wealth manager LGT Switzerland.
“I know a number of German entrepreneurs who want to have a foothold outside Germany if things get too red [leftist] there,” one top Swiss banker said:
A poll on Thursday showed the SPD, on 25 percent, leading outgoing German Chancellor Angela Merkel’s conservatives by four points.
The SPD wants to reintroduce a wealth tax and increase the inheritance tax, while the Greens — a likely potential coalition partner — plan to tax fortunes more heavily.
Although both envision raising income tax for top earners, a tax on assets would raise much more money, the tax lawyer said.
He said that he was seeing increased demand for advice from clients, adding that some entrepreneurs had sought to protect themselves by making new investments through a company in Switzerland or transferring assets to a foundation in Liechtenstein.
Simply transferring cash to a Swiss bank account, on the other hand, no longer helps.
Under immense international pressure, the Swiss share such account data with tax authorities in clients’ home countries.
“Switzerland as a financial center is characterized by stability, legal security and a high level of financial competence. However, it does not offer any protection against tax evasion,” a Swiss State Secretariat for International Financial Matters spokesperson said.
Durselen said that he recently spoke with a German entrepreneur who feared Germany could soon tax foreign assets or transactions harshly, which fostered the view of Switzerland as a safe haven for capital.
“Personally, I assume that considerable assets will continue to be moved to Switzerland,” he said.
One local politician said that dozens of wealthy German entrepreneurs have inquired over the past few months about residing in one of the low-tax suburbs along Lake Zurich.
The Burmese junta has said that detained former leader Aung San Suu Kyi is “in good health,” a day after her son said he has received little information about the 80-year-old’s condition and fears she could die without him knowing. In an interview in Tokyo earlier this week, Kim Aris said he had not heard from his mother in years and believes she is being held incommunicado in the capital, Naypyidaw. Aung San Suu Kyi, a Nobel Peace Prize laureate, was detained after a 2021 military coup that ousted her elected civilian government and sparked a civil war. She is serving a
‘NO AMNESTY’: Tens of thousands of people joined the rally against a bill that would slash the former president’s prison term; President Lula has said he would veto the bill Tens of thousands of Brazilians on Sunday demonstrated against a bill that advanced in Congress this week that would reduce the time former president Jair Bolsonaro spends behind bars following his sentence of more than 27 years for attempting a coup. Protests took place in the capital, Brasilia, and in other major cities across the nation, including Sao Paulo, Florianopolis, Salvador and Recife. On Copacabana’s boardwalk in Rio de Janeiro, crowds composed of left-wing voters chanted “No amnesty” and “Out with Hugo Motta,” a reference to the speaker of the lower house, which approved the bill on Wednesday last week. It is
‘EAST SHIELD’: State-run Belma said it would produce up to 6 million mines to lay along Poland’s 800km eastern border, and sell excess to nations bordering Russia and Belarus Poland has decided to start producing anti-personnel mines for the first time since the Cold War, and plans to deploy them along its eastern border and might export them to Ukraine, the deputy defense minister said. Joining a broader regional shift that has seen almost all European countries bordering Russia, with the exception of Norway, announce plans to quit the global treaty banning such weapons, Poland wants to use anti-personnel mines to beef up its borders with Belarus and Russia. “We are interested in large quantities as soon as possible,” Deputy Minister of National Defense Pawel Zalewski said. The mines would be part
Cozy knits, sparkly bobbles and Santa hats were all the canine rage on Sunday, as hundreds of sausage dogs and their owners converged on central London for an annual parade and get-together. The dachshunds’ gathering in London’s Hyde Park came after a previous “Sausage Walk” planned for Halloween had to be postponed, because it had become so popular organizers needed to apply for an events licence. “It was going to be too much fun so they canceled it,” laughed Nicky Bailey, the owner of three sausage dogs: Una and her two 19-week-old puppies Ember and Finnegan, wearing matching red coats and silver
RSS