An asset management company (AMC) plays a vital role in boosting the client’s investment portfolio. They spot trends, identify viral assets (like bonds and securities), pool funds, and diversify risks via multiple investments. In short, they serve as a viable source for managing and growing funds. A PwC report suggests that the global Asset Under Management (AUM) industry is all set to reach $145.4 trillion by the end of 2025. This opens a world of opportunities for startups and entrepreneurs. If you want to leverage this sector but have no idea how to get started, this write-up is all you need. Here is everything you need to know about building an asset management business in 2026.
Why Should You Start an Asset Management Company (AMC) in 2026?
The stats below show why opening an asset management company is the road you should take:
- According to Market Research Furture, in 2024, the global HNW i.e., High net worth offshore investment market stood at $17.92 trillion. The source further added that this growth will reach $25.33 trillion by 2034.
- According to Allied Market Research, the global risk management market attained a valuation of $12.6 billion in 2022. Moreover, they expect this market to grow 4.5 times by 2032, taking the overall valuation to $52 billion by 2032.
- In 2023, the global investment advisory services market stood at USD 80 billion. They expect that it will grow to $160 billion by 2032, reflecting a Compounding Annual Growth Rate (CAGR) of 8%.
- Apex bodies like the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB) are working in conjunction to enact norms for regulating diverse financial companies, including AMCs. This can reinforce stability in the global asset management sector.
- Digital platforms and fintech organizations have simplified the onboarding of emerging AMCs to fuel innovation among business enthusiasts and startups.
- New value and sustainable investing are gaining traction among investors for their remarkable potential.
How to Set Up an Asset Management Company: A Step-by-Step Guide
The section below provides a roadmap for establishing a legally viable AMC in a specific jurisdiction.
Step 1: Define Your Business Model
The first step involves selecting a viable business structure that aligns with your business requirements. The structures cited below are the most suitable ones for AMC-related endeavors. Each structure attracts distinct pros, cons, and legalities.
- Independent AMC (offers more control and growth potential)
- Subsidiary of a financial group (yields expansion flexibility and robust operation)
- Trust-based investment firm (facilitates enhanced privacy and strong protection)
- Offshore asset management company (ensure minimal taxes and reduced compliance with relaxed reporting requirements)
Step 2: Choose the Suitable Jurisdiction
Choosing the appropriate jurisdiction is vital from the standpoint of growth. While there are many viable locations to choose from, here are some destinations that we recommend. These jurisdictions not only ensure tax benefits but also facilitate a trade-friendly environment with minimal regulations.
Step 3: Secure Mandatory Licenses and Approvals
Depending on the jurisdiction, you need to secure some legal approvals to set your AMC business in motion. For example, in Switzerland, the applicant is required to secure approval from the apex authority, viz. FINMA (Financial Market Supervisory Authority). Similarly, in India, the applicant needs to secure a permit from the Securities and Exchange Board of India (SEBI).
Likewise, if you choose to operate in an offshore destination, you must secure approval from the local authority.
While applying for such approvals, factoring in the given parameters is also vital.
- Minimum capital requirement
- Qualified management team
- Compliance officer
- KYC and AML policies
- Client reporting systems
Step 4: Build a Qualified Team
An asset management company seeks a considerable workforce to keep the operations up and running. Typically, an AMC requires a competent team boasting:
- Portfolio managers
- Financial analysts
- Compliance officers
- Risk managers
- Legal and administrative staff
Step 5: Set Up Infrastructure and Technology
Setting up a cutting-edge infrastructure boasting modern technologies shall determine your operational efficiency and performance. Depending on the operational footprint, you may need to accommodate the following technological resources to support your business:
- Portfolio management software
- Client reporting tools
- CRM systems
- Cloud computing
- Trading platforms
Step 6: Open a Corporate Bank Account
Finally, you need to open an account in a designated bank to support your business transactions. It involves applying for an application and furnishing mandatory paperwork. Consult your partner or a certified service provider like BSW to ease the overall process.
Documents You Need to Arrange for AMC Registration
Documents required to establish an AMC shall vary depending on the jurisdiction. Typically, you will need to arrange the following paperwork while applying for AMC registration:
- Memorandum of Association
- Article of Association
- Letter of incumbency (for offshore company formation)
- Board letter boasting the consent of all the members
- Industry-specific approval
Tips to Maximize the Growth of an Asset Management Company
Starting an asset management firm is a matter of complying with stringent financial regulations and tax laws. These regulations can reduce operational efficiency, leading to derailed productivity. Also, the cost of maintaining the infrastructure and competing in a cut-throat market can take a toll on your profit. Here’s what you can do to reduce operational costs and boost growth:
- Choose an offshore location to set up a virtual parent company. You can structure the flow of profit through it, which can reduce tax burdens and boost profit margins.
- Outsource your taxation and payroll activities to achieve economy of scale. This will allow you to focus on core activities.
- Rely on innovative investment products, including Smart Beta ETFs and Index Funds, to attract new-age investors.
- Focus on leveraging modern technology, including cloud computing, to reduce overhead costs and streamline operations.
- Find ways to expand distribution channels to reach a broader investor base.
Conclusion
Setting up an asset management company can be a rewarding experience for startups and new-age business people, provided they make the right decisions at every stage. Undoubtedly, it is a compliance-intensive business, but its rewards outweigh the disadvantages. If setup cost and operational expenses are your concern, you can choose offshore business formation in a jurisdiction that suits your business needs and growth prospects. While offshore AMC registration is relatively simple, you might stumble upon some regulatory hurdles. You can avoid them by leveraging BSW’s expertise.
Business Setup Worldwide (BSW) is a premier service provider that helps with various business needs. These include, but are not limited to, incorporation, taxes, accounting, and payroll, among others. With 8+ years of experience, BSW has emerged as a standout partner for offshore activities. Contact us now to take your new venture to the next level.
