Many experts evaluate assets entrusted to asset management firms in Switzerland at CHF 3.1 trillion. Of this sum, nearly a third is occupied by assets invested by international businesses. This speaks in favor of the country’s AM industry, which in turn amounts to a percent of the gross domestic product of this picturesque and highly developed European country.
The Swiss AM sector soared by 58.2% from 2016 to 2024. This further cements the already incomprehensible reputation of the local financial sector, attracting new market participants. Switzerland business licenses become attractive for international companies who want to work in this country. If you are one of those willing to start a fund or another kind of financial organization in the country, keep viewing this guide.
Major pros of obtaining an Asset management license Switzerland
Today nobody’s surprised when assets are not managed directly but instead delegated to an intermediary. Businesses simply want to save time or enjoy greater efficiency. So, they naturally turn to professional Swiss financial services.
Perhaps, you might be suspicious about entrusting your assets to a professional manager because it’s yours. The fear of yours is quite logical but you are merely facing a common prejudice. Today, professional asset managers demonstrate excellent results. Working on a percentage basis such companies are naturally interested in good results. Greater efficiency will bring them a bigger profit, don’t you see?
These are the main asset management benefits Switzerland:
- Individual approach: It means that you require a personal manager who could take your special needs into account. Anytime you are free to come up with questions. You’ll be timely notified about what’s going on with the entrusted stuff.
- You can get funds fast: In case of an urgent need, it’s possible to withdraw the required amount. However, in a regular situation, you’d better let your money work for you. Nevertheless, the very possibility of a fast withdrawal gives you peace of mind.
- A well-thought management system: As a rule, AM firms are aware of the market situation and boast extensive experience in the industry. Therefore, they timely perform all the necessary operations. Asset owners often lack specialized knowledge let alone experience to avoid fatal mistakes.
- Decent profit: It’s often bigger than you could count on with your self-management. As told above, true professionals are interested in your success – they get a share from it!
Step-by-step process for licensing in Switzerland
Individuals and businesses interested in providing financial services in Switzerland require permission from FINMA. That’s the country’s major financial watchdog, namely, the Financial Market Supervisory Authority.
This watchdog offers several types of licenses, but since modern asset management relies on fintech, it would be logical to opt for exactly a fintech license.
To get a FINMA license, you require allocating at least 100,000 CHF. What’s more, a public deposit accepted by your asset management company shouldn’t exceed 100m CHF.
Approximately, it might take you up to 4-6 months to get this license. First, your company needs to be registered where the licensing procedure will run – in the same jurisdiction. Secondly, you require submitting your yearly tax reports.
Certainly, you can’t evade paperwork here. On the other hand, some professionals assist foreign businesses in getting Switzerland business licenses. You can turn to them. They can help you not only to cope with nasty paperwork but also navigate you through the negotiation process with the regulator.
FINMA expects you to submit documents having to do with your KYC, security, AML, and IT policies. Additionally, you need to provide your P&L statement, and 3-year financial forecast, not to mention the company’s flow of funds. Don’t forget to add your risk operation policies, and internal audit.
Regulatory requirements for compliance
Regardless of the type of a financial activity you carry out, it is necessary to meet certain regulatory compliance requirements.
- You need to respect the reciprocity principle in regard to the licensing conditions. The very principle of reciprocity is that you are expected to have a license similar to the FINMA one in your home country.
- A minimal capital needs to be deposited to cover the activities you carry out. To be exact, you require depositing approximately 3% of government funds, but the sum shouldn’t be under 300,000 CHF.
- A corporate presence in Switzerland is required too.
- Your managers need to be qualified enough to execute their duties.
- The very organization of your company shouldn’t violate the requirements of FINMA. In particular, it needs to be divided into distinct departments.
- Draw up a detailed structure of your company. Unveil everybody responsible for making decisions, including your Board of Directors, etc.
- An auditor and directors need to be appointed. They could be either locals or foreigners depending on the state.
- You need to prove that the company of yours pursues effective policies to withstand all the possible risks having to do with your financial activity.
- Come up with a detailed business plan. There you should illustrate all planned activities for a certain period of time, budget, including where it’s stored.
Benefits and challenges in the Swiss market
The country’s banking sector is a long-lasting example of stability, reliability, and innovation. The latter is all about fintech, blockchain and other technology that is widely implemented in the financial sector today. Many foreign companies choose this place for their investment needs because they know that’s the place from which they’re bound to derive fantastic benefits.
On the other hand, the country’s AM sector faces several challenges. First, Swiss financial services heavily depend on the European Union as getaway to an unlimited international market access. Being a non-EU member, Switzerland has to turn to negotiations on a regular basis to maintain sufficient market access. Secondly, the growing regulatory density contributes to the cost pressure. Nevertheless, for most international clients pros definitely weigh and once again they never hesitate whom they should entrust their SRO or a private investment portfolio.
