US-ETFs (VT for instance) not available anymore in Switzerland?

You can buy quite few HSBC ETFs, e.g. S&P500 ETF TER is only 0.09%. I am quite new here… but I don’t understand is this a real issue of not having VT or other USA based ETFs?

Is there any significant difference in taxation, or dividends, when ETFs “come” from Ireland or other country, but not the USA?

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Yes, check Tax optimisation for ETF investing for details.

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I am staying in this one to see the evolution. Do we know anything new about IB implementing this new measures?
Thanks

There are no measures for IB to implement. So we won’t see anything.

(They’ve implemented the EU rules for EU residents because they have client-facing EU offices. That’s not relevant for us in Switzerland.)

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Yes but won’t be PRIIPS applied to Switzerland as well starting from January 2020?

No. You’re thinking of a different Swiss law, which has different requirements and only applies to brokers in Switzerland.

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And there was even a reply from the administration confirming it upthread: US-ETFs (VT for instance) not available anymore in Switzerland!

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So basically the only option we have is to use IB to buy US based ETFs.
Is there avaiable any cost calculation when you have invested less than 100k? is the tiered cost structure any better?
Thanks

You’ll be up to 100k sooner than you think. Otherwise, what’s the point of it all?

Once you get into it, every 1000 CHF spent on useless consumption will resonate in your mind as “this would be 2000 CHF in a few years from now thanks to compounded interest”. Then again, 10 CHF a month is dirt cheap for what IB provides. Tiered is the way to go.

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There are other brokers that accept swiss customers, e.g. Schwab. Technically I think Swiss brokers can still let you trade (if it’s client initiated the prospectus is not required, only for the funds they advertise), I somehow doubt they will tho.

Why would anyone in the world want to buy US ETF’s from a Swiss broker:

  • Extra stamp duty
  • Extra tax withholding
  • Extra fees

People are afraid of USA and they put high trust in the Swiss brand. Especially the Swiss will feel safer when using the services of a local broker.

Actually, what would you guys say about potential risks of holding your assets with an American broker? Apart from the estate tax, can there be any more surprises?

you mean, as a result of not being QI and not having W8BEN? Because otherwise there is no difference. The difference is when holding Swiss-domiciled ETFs, I believe.

Estate tax still applies to US assets held in a Swiss broker.

Nope, Steuerrückbehalt USA. Not that different, but why would you want it?

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Yes… a little brain freeze there, sorry…

fundamentally I guess they could freeze your asset should they ever feel like doing that. Would probably require you to either be an oligarch, a dictator with weird hair or some otherwise not behaving politically exposed figure. Slightly more realistical might be a proper armageddon ie war situation where it would get really tough. Or a socialist regime change. You name it.

But I guess a reasonable risk could be some weird new tax down the road somewhere.

Or, perhaps a currency reform or something weird…

It’s not a totally unrealistic risk overall in my view, but hard to grasp. And perhaps you might have a grace period.

Overall I would prefer to avoid it - but while it is 0.3-0.5% cheaper there due to unfair taxes/more competition amongst ETFs/brokers/larger economy of scale it’s really hard…

…and their shitty estate tax is also honestly a scary aspect - but yea, thats by domicile, not broker

You say that FINMA new swiss law (a copycat of EU PRIIPS which will be active from January 2020) will apply exclusively to Swiss brokers. I don’t think it’s about the domicile of the broker, instead it’s all about the domicile of the investor (like eu PRIIPS). If you reside in Switzerland, according to the new law, you won’t be able to buy funds that don’t provide a KID (US funds don’t). Why should it be any different from what happened at Interactive Brokers with european investors in 2018? They simply revoked the possibility to buy US funds overnight. Realistically that’s what will happen to swiss residents from 2020, unless the law clearly states that it applies only to swiss brokers, which I find unlikely.

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Please read upthread, it was already explained why that’s not the case (the law is different from what the EU implemented).

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You could read this thread and read the law, or you could just keep refusing to read this thread and read the law and keep making baseless claims.

And you keep forgetting that IB had to care about EU law because they are based in the EU (also the US, but we’re customers of IB in the UK).

I have the same dilemma as others here but still two questions:

  • is it so remote that Degiro will change their mind and fix the possibility to buy US ETFs for Swiss residents? I mean it should not be that big effort for them and maybe somebody here knows someone working there and point them out they might lose some good investors being so lazy?
  • is there no other low TER EU-US ETF but similar to VT for instance and that would compensate the missing possibility to optimize taxes?

Thanks!

Maybe degiro will change their mind, difficult to say. But re VT alternatives: The cheapest I’m aware of is VWRL and I did a TER + L1WT comparison here with the outcome that VWRL is ca 0.3% more expensive currently (changes every year):

        TER     L1WT     TER+L1WT(assuming 2.3% div)
 VT    0.10%    5.53%    0.23%
 VWRL  0.25%   12.43%    0.54%

So it’s a choice between pest and cholera

  • pest: VT - cheap but you have the estate tax problem
  • cholera: VWRL - expensive but no estate tax problem

Mind you that this L1WT is only so dramatically cheaper for US stocks. So really this dilemma could be limited to VTI/VOO vs VUSA (requires splitting VT though). As for other regions like europe and asiapac L1WT of US vs IE funds is similar, there the difference is “only” the TER :slight_smile:

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