Clients come to us regularily to fix issues with Swiss asset management companies or other licensed Swiss financial services companies they purchased. Unfortunately, quite often purchasers aquire companies without proper approvals, because corners may have been cut during the licensing process in order to save money and obtain the license cheaper, faster and easier.
The licensing process in Switzerland
In Switzerland, there are certain broad authorizations possible under Art. 2, para. 3 AMLA, but the actual effective license is based on the business model and other documents presented at the time of filing the license. The fact is, the business model can be very simple, or very complex. For example, we have seen companies licensed with as little as a 2 to 3 pages of supporting documents and others, such as our typical filing documents, consist of circa 100 pages.
Clearly a company with 3 pages of supporting documents vs one with 100 pages of supporting documents results in a vastly different license. This means that Swiss licensed companies are certainly NOT all created equal!
Here are just a few examples of problems we’ve seen with licensed Swiss companies:
- Approved under a very restrictive business model, such as engaging in forex transactions only.
- Approved only for customers residing in Switzerland.
- Not approved for fiduciary/trust activites, such as holding escrow for third parties, providing bank account signatory services or trust administration.
- Restricted to only qualified high net-worth customers.
- Not approved to run a banking services platform, or provide merchant or other payment solutions.
- Not approved for discretionary asset managment.
And the list of goes on. There are many points which greatly affect the value and usefulness of the company. Clearly even one of these issues might be quite troublesome to your future plans of operation.
Imagine that you own a licensed Swiss financial services company that is restricted to forex trading only, for high net-worth customers only, who reside in Switzerland only, and which does not allow trust activities. Now imagine you own a Swiss company that is licensed for very broad activities, for all types of customers from anywhere in the world, and is also approved for trust activities. Which would be more useful and valuable to you?
At SAMF, we submit around 100 pages of supporting documents for the license application. We do not cut corners to save time and money. The process takes significantly more time and effort, but the end result is a considerably more valuable company, with the proper approvals you need to execute your business model.
So remember…all Swiss licensed companies are not created equal.
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