The days of Switzerland being the secret banking capital for the wealthy appear to be waning, as tax advisers are recommending Singapore, Hong Kong, and the Cayman Islands in light of recent cooperation between Swiss and U.S. officials. While no firm data is available, capital appears to be flowing to these three countries at a quickened pace. In all, the non-profit Tax Justice Network estimates somewhere between $21 trillion and $32 trillion is hidden in overseas bank accounts.
Given the current air of austerity, governments around the world are looking to increase revenue and tracking down these large sums has become a favored method. Since 2009, the U.S. government has recovered $5 billion in taxes from 38,000 individuals after a lengthy investigation in which Swiss officials surprisingly aided. After that landmark event, the Swiss apparently have continued helping the Justice Department.
Since then, U.S. authorities have aggressively pursued Swiss banks they suspect of sheltering American tax cheats. A pending deal described by Justice Department officials on Wednesday between U.S. and Swiss authorities could provoke another surge of recovered tax dollars, [Jeffrey] Nieman said. The agreement would require Swiss banks to disclose records showing outgoing transfers from American account holders. Authorities likely will use that information to pressure financial institutions in other popular offshore destinations, he said.
Despite the recent and looming crackdowns, some $2.1 trillion is suspected to be stashed in Swiss bank accounts, far and away still the most popular by deposit size. According to Boston Consulting Group, Hong Kong and Singapore banks combined hold roughly half that amount.