Lack of financial privacy leaves wealth visible to government bureaucrats and lawsuit-happy predators. In the U.S., judging from current trends, there will be on average at least three lawsuits filed per minute per state in 1999. The Year 2000 promises to herald a new era of computer-related litigation. In an environment where "everybody sues everybody," not only does the quality of life suffer but so does private entrepreneurship. Every investor should devise a plan for safeguarding his or her wealth -- before the system allows someone else to have it.


Getting wealth to a safe haven is not always as easy as it sounds. Just look at the Clinton Administration’s tax policies. In late 1996, the govenment passed a law imposing strict new reporting requirements on those who create and fund foreign trusts, on beneficiaries of foreign trusts and on trustees of foreign trusts. Harsh penalties were established for failure to comply. The IRS has recently indicated that it "will have to be more aggressive and creative in addressing promoters and preparers of questionable schemes." But "questionable" is not easily defined as anyone who has dealt with IRS regulations knows.


The Swiss Asset Protection Certificate (APC) combines iron-clad asset protection and the potential for capital appreciation. It is a vehicle to protect the family’s assets and financial well-being, one that provides privacy, safety, and has been tested in practice.

The Swiss Asset Protection Certificate is a contract with a Swiss insurance company which guarantees the investor’s principal and all interest payments. It has a five-year duration and is continuously renewable, at one’s discretion. The APC is shielded from potential creditors under the guarantee of strict privacy and protection by Swiss insurance laws. The icing on the cake is that such contracts are not subject to Swiss withholding tax unlike bank accounts and other fixed-income instruments.

With the APC, a spouse or children, as beneficiaries, are "first in line" to receive benefits, thus giving preference to their current and future financial needs. The Certificate is in full compliance with the law, with provisions that have been tested in Swiss courts and generally accepted for decades. The owner cannot be forced by creditors to redeem the policy to pay off debts.

The APC gives you all the privacy Switzerland offers. Asset protection is built in and comes at no additional cost; it is provided by Swiss law. In addition, legal insurance is provided along with the Certificate. Should creditors apply in Swiss court to enforce a foreign judgment, legal expenses in Switzerland will be covered.

How does it work? Assets invested in Swiss annuities and life insurance policies are protected by law from creditors if the policies have been recognized by the supervisory authority, the Federal Office for Private Insurance ("Bundesamt für Privatversicherung") and special conditions described below are met. The Swiss Asset Protection Certificate (APC) has been especially designed to meet these requirements.

Specifically, if a non-resident of Switzerland purchases an annuity from a Swiss insurance company and designates his spouse or his descendants as beneficiaries of or irrevocably designates any other third party as beneficiary, this insurance policy is protected by Swiss law against any collection procedures instituted by the creditors of the policy owner and it cannot be included in a Swiss bankruptcy procedure. Even if a foreign judgment or court order expressly orders the seizure of such policy or the inclusion in the estate in bankruptcy, it may not be seized in Switzerland or included in the estate in bankruptcy. If the policy owner has designated his spouse or his descendants as beneficiaries of the policy, it is protected from his creditors irrespective of whether the designation is revocable or irrevocable.


Why have more than 35% of all worldwide private assets been invested in or through Switzerland?

In Switzerland, the right to privacy and the right to protect wealth for the family are traditional virtues supported by the Swiss people and their government. As a result, banking secrecy and asset protection have been enshrined in Swiss law. A tradition of maintaining client confidentiality has been part and parcel of the success of Swiss banking through many generations – even before banking secrecy was enacted in 1934. The stringent law applies as well to Swiss insurers. Insurance companies may not disclose information about policies to anyone other than the owner, including government authorities.

These laws are deliberately designed to keep insurance proceeds safe and sound for their owners, and completely out of the reach of anyone else!


Switzerland is virtually synonymous with stability. Its longevity (more than 700 years old!) and neutrality (at peace with its neighbors for many centuries) will re-assure investors. For APC investors it’s good to know that throughout its almost 150-year history, no single Swiss insurance company has failed nor has a claim been forfeited.

For full lawsuit protection, investments must be outside an investor’s legal jurisdiction, both in principle and in practice – and inside a long-established, stable country that discourages frivolous and inventive litigation. Going to a jurisdiction that discourages unnecessary litigation is an assurance of fair treatment and an environment that is not changing constantly as new precedents are set -- the laws protecting investors today will still be there tomorrow.


The earnings in any of the currencies available are approximately the same as fixed medium-term time deposits. In Swiss francs, the average yield is slightly above that for Swiss government bonds. Since 1974, investments in Swiss francs have seen a 300 percent appreciation against the dollar.

Dollar-denominated assets face higher risks in 1999. It would be wise to consider taking refuge in euro or Swiss franc accounts to get protection and the potential for capital appreciation. Investing in Switzerland gives investors the chance to diversify into a strong and safe currency. As the long-term record of the Swiss franc shows, it has maintained its value better than any other major currency in the world.


The Swiss Asset Protection Certificate is a viable and affordable alternative to offshore trusts.

The basis of a trust is the transfer of ownership to a trustee. In contrast, an APC policy holder is the owner and retains full control so long as he or she remains solvent.

The APC fulfills many goals for investors: some make it part of their retirement planning, others intend to finance their children’s college education, while others consider the investment as a protected nest-egg, providing guaranteed growth, principal and protection from creditors. It is one of the rare all-season investments that compliments and fits every portfolio.

In general the legal process which a creditor or claimant must undertake is an arduous one:

First a creditor must know a policy exists in Switzerland and which company is the contractual partner. Then he must come to Switzerland, hire a Swiss attorney, who works on an hourly fee basis only (average US$250 per hour), and make an initial deposit of US$1,000 for his services. The creditor must have a specific claim, based on an enforceable judgment or on a recognition of debt. The legal process can then begin in which, most importantly, it must be proven that fraudulent conveyance is involved before the Swiss court can declare a policy invalid.

Additionally, the APC's "duress clause" prevents APC owners from acting under creditor duress by giving weight to an owner's "true intent."

The Swiss Asset Protection Certificate provides many benefits without the cost and headache of dealing with tailor-made offshore structures in various jurisdictions. It is a simple choice for investors as well as investment advisors and legal or tax practitioners, who themselves are exposed to potential litigation due to the complexity of these structures and constantly changing federal and state laws.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

This article also appears in the 'International Offshore and Financial Centres Handbook 1999/2000'. For further information about this highly informative guide to offshore centres, or to order your copy, please phone +44 (0) 207 820 7733 or send an email to