What are the Swiss secrets to Global Investing
Globalization has evolved as a major change over the past few decades. This has stimulated the international trade which has gained much importance. With the rise in the activity of foreign currency and the investors’ participation towards acquiring currency options has also exhilarated the performance of international trade on a global scale. For all these years, the U.S. dollar has remained THE leading international currency globally.
After the U.S. dollar the next leading foreign currency is the Euro, which has also recently evolved as an important currency for international trade and finance. Switzerland, a unique geographical entity, surfacing a close relationship, in terms of geographical boundaries and proximity, with other EU members is leading towards procuring an important place in the currency category, i.e. Swiss Franc. Since the past few years Switzerland has also come under the scanner due to its bank regulations leading to leak in the information on specific accounts and thus has garnered a lot of political pressure. Such political affairs could have an impact on Switzerland’s status as a leading economic power and concomitantly the use of the Swiss franc in global finance.
Switzerland representing a geographical boundary all round, landlocked, relies on the trading business based on its natural resources. However, Switzerland stayed out of the European Union to maintain its independence and strived to facilitate trade with its international partners.
The Swiss franc (internationally recognized as the CHF, from the Latin Confoederatio Helvetica franc) enjoys the status of a major international currency. Indeed, the currency can be classified under three different perspectives. First, it helps in the examination of the volume the individual currencies are traded worldwide. Amongst the list of the currencies holding top priorities, the U.S. dollar and the Euro holds the leading positions, which make up approximately sixty percent of all foreign exchange trading. Currently the Swiss franc is currently the sixth most highly traded currency in the world, accounting for around 6.4 percent of daily transactions (Bank for International Settlements).
Second, with the help of such classification, one can look at the amount of currency held as bank reserves by foreign banks.
And third, it enables one to concentrate on the amount of money invested in accounts usually labeled in a certain currency on investments made by non-Swiss entities in Swiss securities accounts. It probably goes without saying that Switzerland is best known as a haven for foreign investment. However, currency investment is not restricted to investing in the country’s currency always, and hence the issue under scrutiny is the examination of “assets under management”.
Most of the international firms designate Switzerland as a business-friendly legal and fiscal environment among other nations.
Wealthy investors from around the world select Switzerland as their trading center.
Switzerland has a state-of-the art banking infrastructure. And due to its infrastructure which encompasses banking know-how and technological expertise, attracts investors from different corners of the world. Investors trust the Swiss banking system as one of the safest places to invest money.
Since the incursion of EU crisis, many European countries have submerged into significant debt and are battling with services like, unemployment. This has given a hike to the Swiss franc and its investment opportunities as most of the investors’ are turning towards this currency as a safe haven.
Looking at the broader perspective, Greece’s financial crisis can trigger a massive fall of financial markets in Europe, which includes Italy, Spain, France and Ireland. With these countries already on high debt ratio, can, in turn, produce a ripple or “domino” effect on US and other European countries and could significantly weaken the Euro currency. And this will significantly halt growth impacting the already ailing Asian countries battling against inflation.
Most of the investors are resorting to the investment option i.e. ‘Swiss Annuity’ designated in Swiss Francs. The Swiss annuity is an insurance contract issued by major insurance companies in Switzerland. It ensures Safety, Growth and guarantees good Returns. The Swiss annuity investment offers liquidity, currency growth and most importantly asset protection along with privacy. If you are not a citizen of Switzerland, you can be relieved from paying taxes on the purchase of Swiss annuity contract in Switzerland. A number of currency options available like EUR, USD, AUD, NEK, SEK and the annuity payouts can be made to any bank account in the world.
Switzerland is considered as one of the favorite business destination by the top leaders. The Swiss economy acts as a platform for different international firms to evade taxes and also avail a better access to other European countries while trading. Here comes the role of the Swiss franc as an important currency for international trading.
Despite the fact that Swiss franc holds a special place within the investor community; the recent financial crisis may have a damaging impact on the reputation of the Swiss banking system. Moreover, the euphemism experienced by Zurich (“Gnomes of Zurich”) has mellowed down the reputation of Swiss banks since the past few years. In addition, Switzerland’s geographic and economic position within the heart of Europe has catapulted the speculation on the possibility of Switzerland joining the European Union.
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