Why consider Austria for banking at all with neighboring Switzerland beckoning? While Switzerland is a larger and much-better known private banking center, Austria’s banking tradition is itself more than 200 years old. Accounts and securities investments are available in all major markets and currencies. Austrian banks offer an impressive range of services: the ability to purchase foreign currencies and CDs, offshore stocks and bonds and options, precious metals, and (particularly for non-U.S. persons) offshore funds. In other words, you’ll find the same capabilities at Austrian banks as in Switzerland, but with somewhat lower fees and with a much lower profile.
All Austrian banks are subject to Austria’s bank secrecy laws - some of the world’s most stringent. The practical consequence is that the small army of professional asset trackers, information brokers and corporate espionage specialists which advertise their ability to uncover assets in U.S. bank and securities accounts will be completely thwarted if they try to pry information out of an Austrian bank.
When Austrian banking law was codified in 1979, the well-established tradition of bank secrecy was already two centuries old and banking secrecy was written right into Austria’s new constitution. Article 38 of the banking act says Austrian banks can’t divulge information to any third party. That means they aren’t allowed to outsource their back office work, either.
What’s more, banking secrecy wasn’t affected by Austria’s entry into the European Union in 1995 - it would take a constitutional amendment to change it.
Austrian banks have built an excellent reputation: When the U.S. published its banking blacklist four years ago, Austria was not on the list. Austrian banks are also rock-solid - no Austrian bank has failed since 1939 and the banks offer custodian portfolios, where stocks and other securities are bought in the bank’s name and held in the client’s separate accounts.