Why F1 Drivers Love Switzerland

[BoyFerrari]

Schumacher is 'unemployed'
Wed 08 Feb, 8:19 AM
http://uk.sports.yahoo.com/08022006/...nemployed.html

In the country he resides, formula one's highest earner - Michael Schumacher - is officially unemployed.

Because motor racing is not recognised in Switzerland, the German has registered formally as an unemployed foreigner, according to the German Tageszeitung newspaper.

Even though his annual income tops more than $50 million, the 'unemployed' label means 37-year-old Schumacher only has to pay annual charges based on an income of $300,000.

Note: Alonso and Raikkonen also lives in Switzerland.

[number001]

Their fun wont last very long :D

Swiss Fight Against Tax Cheats
Aids Singapore's Banking Quest

Island Seeks Foreign Deposits
To Diversify Its Economy;
Denies Wanting 'Evaders'
Mr. Widdeck's Dream House
By EDWARD TAYLOR in Frankfurt and CRIS PRYSTAY in Singapore
Staff Reporter of THE WALL STREET JOURNAL
February 6, 2006; Page A1

...

Singaporean officials involved in the private-banking push say the new foreign depositors are attracted by Singapore's sound legal system, lack of corruption and transparent financial systems. Some Swiss private bankers also have been billing Singapore as a way around new taxes in Switzerland, Luxembourg and tax havens such as Jersey in the English Channel. Under pressure from the EU to crack down on tax evasion, Switzerland imposed a withholding tax last July on some accounts held by EU citizens.

"Singapore is one way of getting around the withholding tax," said Raymond J. Baer, chairman of Zurich private bank Julius Baer Holding Ltd., in a September interview following the announced purchase of Banco di Lugano, a small Swiss bank with private-banking operations in Singapore. Last week, Mr. Baer said that being in multiple jurisdictions enables the bank to serve an international clientele, and that the Singapore office was a platform for growth in Asia. "Singapore also offers a tax-friendly environment," he noted.

A spokeswoman for the Monetary Authority says Singapore "does not seek to attract tax evaders."

The number of private banks operating in Singapore jumped to 35 at the end of 2005, from 20 in 2000. International banks such as Swiss giants Credit Suisse Group and UBS AG have expanded private-banking operations in Singapore to cater to new demand from Asians and Europeans.

Private banks typically provide customers holding at least $1 million of liquid assets with advice on investments, estate planning and taxes. They also often help the wealthy move assets abroad, which some use to avoid domestic taxes.

Singapore has taken various steps to attract wealthy foreigners. Under legal changes made in 2004, foreigners with assets of at least $13 million now can apply for residency if they place $3.1 million in a financial institution in Singapore. Those applying for residency can use as much as $1.25 million of the $3.1 million to buy property in a government-backed resort-style residential development on Singapore's Sentosa Island. New residents are entitled to take advantage of Singapore's income-tax rate of about 20%. (Americans, however, face U.S. tax liability on their income regardless of where they live.)

The incentives are prompting some private-banking customers to actually move there. Helmut Widdeck, an Austrian who owns a company in Hong Kong that makes leather shoe uppers, heard about the new policy from his private bankers at Goldman Sachs in Hong Kong and decided Singapore would be a good place to semiretire. After Singaporean authorities conducted an audit to verify the source of his wealth, he says, he transferred the required amount to an account in Singapore, then bought a 8,557-square-foot oceanfront property at Sentosa Cove. He and his wife are planning their dream home, which they expect to cost $3.8 million.

"For me, it's an interesting plan. I can invest the money into a property I want, and with that I get residency in a place I'd like to live in," says Mr. Widdeck, who is 63 years old. He says he will gain no tax benefit from the move because taxes in Hong Kong, where he used to live for eight months each year, are even lower.

Last summer, Gianpiero Fiorani, former chief executive of Banca Popolare Italiana Scarl, shifted some assets to Singapore from Jersey, an offshore banking center that also came under EU pressure. He had assets with various banks and used Banco di Lugano, the Swiss bank now called Banca Julius Baer (Lugano) SA, to move the assets. Mr. Fiorani was arrested in December in Milan and remains jailed pending an investigation into suspected market manipulation and misuse of corporate funds. When he was questioned by prosecutors, he told them he had shifted the funds "to better protect the money" and for "peace of mind," according to a person familiar with the matter. His lawyers declined to comment, as did the spokeswoman for the Monetary Authority of Singapore. A spokesman for Julius Baer said the bank is cooperating with investigators.

Singapore's private-banking expansion is part of a broad effort to diversify its economy away from electronics manufacturing, which faces increasing competition from lower-cost countries such as China. The government is trying to foster growth in biotechnology, and in chemical and pharmaceutical manufacturing. In 1998, after the Asian financial crisis, it drew up a plan to turn Singapore into an investment-banking, mutual-fund and private-banking hub.

Switzerland's private-banking industry, currently home to about 30% of offshore assets globally, was a model. Banking confidentiality has been a feature of Swiss law since 1934. For decades, foreigners could hold personal accounts recorded within the banks merely by numbers. Tax evasion is an administrative offense, not a crime. Swiss authorities refuse to cooperate with other countries' tax investigations, although they lift confidentiality in criminal matters.

Stiffer Laws

In 2001, Singapore stiffened laws against breaching the confidentiality of bank customers, making penalties for violators even tougher than in Switzerland. It imposed fines of $78,000, imprisonment for as long as three years, or both. In Switzerland, a similar breach could result in a prison term of six months or a fine of about $38,600.

Singapore's private-banking initiative aimed to capture some of the new wealth created by Asia's economic boom. China's rapid economic growth has created fortunes throughout Asia. Liquid assets held by individuals in the Asia-Pacific region, excluding Japan, are projected to increase 8.9% annually from 2004 through 2008, according to UBS, far exceeding the global annual average of 5.5%. Credit Suisse customers domiciled in the Asia-Pacific region accounted for $47.8 billion in private-banking assets as of September, compared with $105 billion in such assets from customers domiciled in Switzerland.

While Singapore was bidding for new private-banking business, the EU was pressuring authorities in Switzerland and other offshore banking centers to take a tougher line with EU citizens who move money to reduce the taxes they pay. In 2000, EU finance ministers proposed ending client confidentiality in tax havens in Europe, including Switzerland. The Organization for Economic Cooperation and Development, of Paris, also had pushed for an "exchange of information" on tax matters in an effort to suppress "harmful tax competition."

Although Switzerland, Jersey and other offshore centers aren't EU members, they are dependent on EU nations for trade. Swiss authorities agreed to compromise. The new withholding tax compels Swiss banks to withhold a portion of interest earned on personal savings accounts held by EU citizens living outside of Switzerland, and to hand over some of that money to national tax authorities. The withholding tax applies to account holders who haven't reported all of their assets to their own tax authorities.

Swiss bankers say the withholding tax and the continuing push to further restrict client confidentiality are discouraging wealthy Europeans from keeping money in Switzerland. Singapore isn't a member of either the EU or the OECD, so it hasn't faced the same pressure. By keeping money in Singapore, Europeans can avoid the new tax, some bankers say.

Tax evasion in Singapore is a crime. But Singaporean authorities tend to respond to requests from other countries for information about tax evaders only when evasion of Singaporean taxes is at stake, says Jeffrey Owens, director at the center for tax policy and administration at the OECD.

In a written response to questions about its policies, Singapore's Finance Ministry said requests for information from tax authorities in other nations are considered under the terms of international agreements designed to avoid double taxation. Singapore has such agreements with 50 countries, a Finance Ministry spokesman says.

...

[GlennSter]

ganun pala yun...

[flakez]

langyang unemployed yan. wahehehehe

[wrcastro_ph]

Saka siguro.. they can live a normal life in Switzerland.... baka ang mga tao dun ay di na masyadong pinapansin ang mga sikat na tao dahil normal lang sa kanila yon.

[empy]

eh paggi-gigolo kaya, recognized kaya yun sa switzerland? baka pwedeng mag-immigrate :D

[BoyFerrari]

Or they can move to Bahrain where there is no income tax.

[BoyFerrari]

Alonso buys Swiss mansion - 20 January 2006

World champion Fernando Alonso has celebrated his 2005 title, and future multi million dollar switch to McLaren, by buying a two-storey mansion in Switzerland.

In picturesque Chateau-d'Oex, in the Vaud region, the 24-year-old Spaniard has set up camp, after several years of living near Renault's English factory. His new house is a huge, white 'chalet' with sets of majestic outdoor steps leading up to the front entrance. A photograph of the house reveals at least five upstairs bedrooms.

Alonso's new home makes him neighbours with several fellow grand prix stars including Jacques Villeneuve and David Coulthard, who live no more than 10km away.

Alonso becomes the seventh notable F1 personality to live in Switzerland, including Jacques Villeneuve, David Coulthard, Kimi Räikkönen, Nick Heidfeld and Jarno Trulli. Former McLaren champions Niki Lauda and Alain Prost have both owned houses there. While Michael Schumacher is not only building himself a castle there but also plays for the local football team!

The country is attractive to high-earning F1 drivers, as the emphasis is on direct - rather than income - tax.

[empy]

maybe they just like cheese, chocolate, watches and knives? :D

[wren]

or maybe they're taking yodeling lessons.