AML Act in Switzerland: What Every Entrepreneur Must Know About Anti-Money-Laundering Compliance
In Switzerland, the Federal Act on Combating Money Laundering and Terrorist Financing (AML Act) imposes strict due-diligence and transparency obligations on any person or company that manages assets on behalf of third parties. Client identification, beneficial-owner verification, documentation and suspicious-activity reporting are required not only of fiduciaries and financial service providers, but also of entrepreneurs active in fintech, crypto or asset management. My Swiss Company SA, a Swiss fiduciary based in Geneva, Lucerne and Zug, explains the legal framework, the thresholds for applicability, the role of self-regulatory organisations (SROs), and best practices to remain AML-compliant and protect your company’s reputation in Switzerland.
1. What is the AML Act and to whom does it apply?
1.1 A law to protect the integrity of the Swiss financial system
The Federal Act on Combating Money Laundering and Terrorist Financing (AML Act, RS 955.0) was adopted in 1997 and implements the recommendations of the Financial Action Task Force (FATF).
Its objective is to prevent assets derived from criminal activity from entering the Swiss economy.
1.2 Broad application
The Act applies to any financial intermediary, defined in Art. 2 AML Act as a person or corporate entity which, “in the course of their business activity and on behalf of others, accepts, holds or arranges transferable assets or carries out transfers of assets.”
This includes:
- banks, insurance companies, asset-managers and other institutions under direct supervision of the Swiss Financial Market Supervisory Authority (FINMA);
- but also non-prudential actors such as fiduciaries, trustees, family offices, crypto-asset platforms, and in some cases commercial companies that handle funds for third parties.
2. When does a company become subject to the AML Act?
2.1 The notion of professional activity
According to Art. 2 para. 3 AML Act and related practice, an activity is considered “carried out in the course of a business activity” when certain quantitative or qualitative thresholds are met. Recognised practice also uses criteria such as:
- annual gross income from the activity exceeding CHF 50 000;
- more than 20 business relationships per year;
- unlimited power of disposal over assets in excess of CHF 5 million;
- transactions over CHF 2 million per year.
Once any one of these thresholds is crossed, the entity must be treated as a financial intermediary under the AML Act.
2.2 Typical examples
- A fiduciary office that holds a client account and pays invoices on behalf of clients;
- A family office managing the assets of a private client;
- A crypto-exchange platform accepting client deposits;
- An investment adviser redistributing funds between investors;
- A commercial company that holds or moves funds on behalf of others.
3. The main obligations imposed by the AML Act
3.1 Client-identification (Know Your Customer – KYC) – Art. 3 AML Act
The intermediary must verify the identity of its contracting party by reference to official identity documents such as a passport, commercial-register extract, or constitutive act of the entity.
When establishing a business relationship at a distance, stricter authentication is required (certified copy, qualified electronic signature or video-identification).
3.2 Identification of the beneficial owner – Art. 4 AML Act
Where the contracting party is not the ultimate economic beneficiary, the intermediary must obtain a written declaration identifying the beneficial owner, and in the case of legal persons, verify the person who ultimately controls the entity (often defined as holding 25% or more of capital or voting rights).
3.3 Clarifications and documentation – Arts. 6 and 7 AML Act
Where the business relationship, transaction or structure poses increased risk (politically-exposed person, offshore, unusual volume), extra clarifications must be performed and documented: origin and destination of funds, economic purpose, client profile.
All documents must be retained for at least ten years after the end of the business relationship.
3.4 Reporting obligation – Art. 9 AML Act
If the intermediary knows or has reasons to suspect that funds originate from criminal activity or that a transaction is linked to terrorist financing, it must immediately file a report with the Money Laundering Reporting Office Switzerland (MROS) and freeze the assets concerned.
Informing the client of the report (“tipping-off”) is strictly prohibited (Art. 10a AML Act).
4. SROs and supervision: who checks compliance?
4.1 Role of the FINMA
FINMA supervises financial institutions under prudential regulation. Non-prudential intermediaries must affiliate with a recognised Self-Regulatory Organisation (SRO) under Art. 24 AML Act.
4.2 Leading SROs in Switzerland
- OAR FIDUCIAIRE|SUISSE (for fiduciaries, trustees, accountants)
- ARIF (Association Romande des Intermédiaires Financiers)
- VQF (Association for Quality Assurance of Financial Services)
- PolyReg SRO (multi-sector provider)
- OAD ASG (Independent Asset Managers)
4.3 How an SRO functions
An SRO issues a compliance regulation (LBA-regime) approved by FINMA, admits and monitors its members, organises regular audits, provides training and may impose disciplinary measures in case of serious breaches.
5. How My Swiss Company assists its clients
As a trusted Swiss fiduciary, My Swiss Company SA assists entrepreneurs, startups and international investors in each step of AML Act compliance:
5.1 Risk-diagnostic and AML assessment
Our experts analyse your business model, fund flows and governance structure to determine whether your Swiss entity falls under the AML Act and to define an appropriate compliance framework.
5.2 Affiliation and SRO liaison
We prepare the affiliation dossier to the relevant SRO, including:
- drafting the internal AML policies;
- appointing the AML-Compliance Officer (AMLCO);
- documenting procedures.
5.3 Manual drafting and policy-setup
Our services include drafting bespoke policies covering:
- client-identification and verification;
- beneficial-owner controls;
- asset-freeze and report procedures;
- training register and audit tracking.
5.4 Audit preparation and staff training
We guide you through the annual audit obligations of the SRO and deliver the staff training required under Art. 33 of the SRO Regulation for fiduciaries.
6. Common mistakes by foreign-entrepreneurs
6.1 Confusing a commercial company with a financial intermediary
Many foreign founders believe that setting up a Swiss company exempts them from AML obligations. However, if the company handles funds for third parties or performs transfers, it becomes a financial intermediary under the AML Act.
6.2 Neglecting fund-flow controls
Using personal bank accounts for business transactions or failing to segregate client funds can lead to major compliance breaches.
6.3 No designated AMLCO
Failing to appoint a compliance officer is a frequent red-flag during SRO audits.
6.4 Lack of documentation
Absence of verification records, beneficial-owner declarations or audit trails means automatic non-compliance during inspection.
7. AML Act and new technologies: fintech, crypto and digital platforms
7.1 Fintech and neo-banks
Digital financial service providers (payments, crowdfunding, tokenization) fall under the AML Act if they handle client funds. FINMA’s Circular 2019/2 emphasises that full KYC and the Travel Rule apply equally in the digital realm.
7.2 Crypto-assets and blockchain
Crypto-asset service providers (exchanges, wallets, ICO managers) must:
- identify clients and beneficial owners;
- report suspicious transactions;
- retain transaction records.
Non-compliance may lead to loss of intermediary status.
7.3 Artificial intelligence and compliance automation
AI-based compliance tools (list screening, anomaly detection, risk scoring) are emerging and enable automated controls while meeting AML Act and Swiss Data Protection Act (DPA) requirements.
8. Practical checklist: Are you subject to the AML Act?
|
Question |
Yes / No |
|
Does your company hold or manage assets belonging to others? |
☐ / ☐ |
|
Do you receive payments on behalf of clients or partners? |
☐ / ☐ |
|
Do you execute transfers or investments for third-parties? |
☐ / ☐ |
|
Do you operate a trust, foundation or family-office? |
☐ / ☐ |
|
Do you run a crypto platform or crowdfunding service? |
☐ / ☐ |
|
Do you deal with remote or international clients? |
☐ / ☐ |
|
Does revenue from these activities exceed CHF 50 000 per annum? |
☐ / ☐ |
👉 If you answered “Yes” to one or more of the questions, your company likely falls under the AML Act or must affiliate with an SRO.
My Swiss Company can perform a full AML-Act compliance assessment and guide you to the proper structure.
9. Conclusion: AML compliance as a credibility asset for your business
Compliance with the AML Act should not be perceived as a bureaucratic burden but as a quality mark for integrity and transparency.
By adhering to client-identification, beneficial-owner verification and reporting obligations, a Swiss entity demonstrates its reliability and strengthens its relationship with banks, investors and financial partners.
In today’s environment of heightened supervision by FINMA and SROs, and stricter international standards, AML compliance has become a sustainable competitive advantage.
My Swiss Company SA, a Swiss fiduciary based in Geneva, Lucerne and Zug, assists entrepreneurs and international investors with the full spectrum of Swiss company formation, management and AML-Act compliance.
