Bank Secrecy in Tax Havens
Bank secrecy (or bank privacy) is a legal requirement in most tax havens and this prohibits banks providing authorities (foreign governments and their tax departments) personal and account information about their customers.
Bank secrecy was codified in Switzerland by the 1934 Federal Act on Banks and Savings Banks. This Act also created the famous ‘numbered bank accounts’. Under the Swiss principle of bank secrecy, privacy is statutorily enforced, with Swiss law strictly limiting any information shared with third parties, including tax authorities, foreign governments or even Swiss authorities (except when requested by a Swiss judge’s subpoena).
In the tax haven of Ras Al Khaimah there is no public registry of companies, their shareholders or directors. As such it is virtually impossible to know which companies are operating there. This can protect a company and its directors from a public backlash following revelations of their use of the tax haven.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2