Since 2021, Swiss legislation has undergone changes aimed at reliable crypto-currency activities. The crypto license in Switzerland is under the control of a specialized management center Zug, which the authorities support. This country has the most favorable conditions for developing the crypto business.
Switzerland is a country that has an excellent reputation for holding money and other valuable assets. As a result, many people have questions about how crypto regulations in Switzerland occur and whether it is worth opening an organization here. There is a rather complex legal system here, so it can be challenging to figure it out without a legal education.
Crypto regulations have developed relatively simple rules for the functioning of the crypto industry in this country.
You first need to pay attention to the anti-money laundering law. Each organization in this jurisdiction must operate honestly and openly not to allow money laundering by either its employees or customers.
There are also stable rules for the taxation of the crypto industry, which consider the provision of services and the types of assets used. Last year, a document titled “Legal Framework for Distributed Ledger and Blockchain Technology in Switzerland” was published here, spelled out the main features of the functioning of various blockchain companies in this jurisdiction. If you have a legal education, it is easier to understand all the intricacies, so you will need the help of a specialist.
In this country, several government agencies regulate crypto activities. FINMA controls the activities of banks, crypto programs, and insurance companies, is responsible for issuing crypto licenses, and monitors compliance with AML/KYC. Since 2021, this country has approved the law on simplifying the federal law on developing electronic list technology. This law has provisions on crypto-licensing, buying and selling virtual currency, and fighting to prevent illegal transactions. The main legal act is the Law on Banking Activities and control over compliance with FINMA rules. In a country, virtual currency is a crypto asset or property that can be exchanged and used in commerce. Switzerland cryptocurrency is divided into the following types by the country’s legislation:
For a company that plans to engage in crypto, you need to apply for a crypto license from FINMA.
Several types of commercial organizations can count on obtaining a cryptocurrency license in Switzerland.
This category is suitable for small and medium-sized organizations with an authorized capital of 20 thousand Swiss francs. Such organizations must have at least one founder, and management can be delegated to all partners. For medium-sized firms, an audit is mandatory, while small ones may not do so. Such entities are subject to income tax at the corporate level, and allowance holders are subject to tax on distributable dividends.
It includes large corporations with an authorized capital of 100 thousand Swiss francs. Such a company must have at least one owner and an unlimited number of shareholders. The governing body is the board of directors, where the final word is left to the person with the most shares. An annual audit is mandatory. Such organizations are subject to corporate tax, and shareholders must pay tax on dividends. The legal address must be registered in Switzerland.
Working with cryptocurrency is subject to the selected type of licensing (there are 4), and this activity is also taxed. Depending on which crypto license in Switzerland is issued to the company, it can only engage in those operations that correspond to this licensing.
Switzerland’s cryptocurrency regulation requires that every company that wants to develop cryptocurrencies must obtain a local license. Otherwise, such an organization will be recognized as a fraudster and unable to continue its activities. The only exception is the government deposits up to CHF 1 million.
The peculiarity of this jurisdiction is that the crypto industry regulation rules apply to ICOs. While many countries in the EU still need to develop sustainable practices for regulating this industry, Switzerland has made straightforward rules.
To understand all the features of the regulation of the crypto industry in this jurisdiction, we advise you to contact our specialists. They will conduct a full consultation, answer possible questions and suggest what you need to pay attention to, taking into account the characteristics of your organization.
In this country, there are such types of taxation:
The amount of the national tax will be 7 – 8.5%, and the rate of the same tax for the cantonal indicator will be 12 – 24%, but it can change every year. The worldwide income of a company resident in this country is subject to local taxation. If this is a non-resident company, it is taxed on income received within the country.
To work in Switzerland crypto, you must ensure that your company meets this jurisdiction’s requirements. Because this country is very favorable towards developing technology companies, including blockchain, you will be fine. A crypto license in Switzerland can be obtained by a resident firm that has been registered in this country. A company like LLC is best suited for this. Swiss laws provide such options for legal entities with this type of financing, but this depends on the kind of service offered. To open a new company, you must do the following:
After the preparatory phase is completed, you must apply for a license. Non-residents can open a business here, but specialists with local citizenship must work in the state. Thus, the choice of personnel must be taken very responsibly. It can be challenging to go through all the above steps on your own, so we advise you to seek help from our lawyers.
The activities of crypto exchanges are carried out based on the permit obtained. There are 4 types of crypto licenses in this country.
For a company to start its activity in the field of cryptocurrency, it needs to decide what type of activity it will be engaged in. It depends on the license a crypto exchange in this country will be issued.
The work of crypto platforms falls under the following types of licensed activities:
Another crypto exchange activity is becoming a self-governing organization (SRO) member. Such a firm can provide financial services as an intermediary: crypto asset management, sale of tokens (securities), payment services, and lending.
According to the requirements, all financial activities belong to one of the types of licenses.
Such licensing entitles the crypto exchange to carry out securities trading and is controlled by the Financial Market Infrastructure Act (FinMIA). Its purpose is the synchronous exchange of offers and the signing of contracts based on the rules of retail customers, the storage of securities in the main vault, and the settlement of contracts with assets that have the property of protection based on uniform norms.
It allows the company to accept federal deposits of up to CHF 100 million or crypto assets if they are not invested and there is no interest paid. Once an application for such a license has been received, FINMA checks the firm’s financial activities and may also require reporting on the audit within the permit’s limits.
The need to obtain it arises in such cases:
Thus, there are three conditions under which a company must obtain this type of permit.
The Fund can invest only in certain crypto assets with many trades. Moreover, investments are made only through certain counterparties and crypto platforms in a member state of the FATF. But there is another type of crypto activity: the company is a broker. To be an intermediary, you must be a member of the SRO. For crypto activities in this country, there is a large selection of licensing options for companies.
Non-fiat currency is considered to be a numeric value that is used for buying and selling through web channels. And this means that the virtual currency was recognized as a financial asset, which impeded the creation of a licensing area.
To obtain a crypto currency exchange license, the declared organization must go through the following steps:
If all the conditions are met, and the regulator has no comments on the documents and structure of the company, then the license will be issued.
The cost of a crypto license depends on many parameters, so you can contact our specialists to find the exact amount. They will analyze your organization’s activities and tell you what costs you will face.
As already mentioned, the taxation and regulation of crypto companies are highly dependent on what assets they use. In 2018, a guide was published that divides all crypto assets (currencies and tokens) into the following 3 groups:
Government authorities understand that cryptocurrency in Switzerland can take a hybrid form; they can include elements of several groups. In this jurisdiction, payment tokens are not a payment method but can be used to pay for goods or services if both parties agree. In addition, government authorities allow the issuance of payment tokens following compliance with the policy to prevent money laundering.
Those tokens that represent debt obligations or shareholder claims on issuers, as well as hybrid tokens, fall under the law on securities and investments. In simple terms, this includes all permits that establish a connection with an issuer. For example, after buying a token, the company must pay dividends to the owner, or they can claim a share in the organization. Ordinary payment tokens are not subject to this law, as they do not establish feedback with the issuer. Such tokens also qualify as intangible digital assets.
Payment tokens can be completely legally moved between two electronic wallets. Since they are not subject to securities law, such transactions can be carried out without unnecessary legal procedures. If you want to transfer tokens that establish a connection with the issuer, you need to follow the requirements of the corresponding distributed ledger.
Issuing a crypto exchange license in Switzerland is a costly process, but registering a company in this jurisdiction has a large number of advantages. Firstly, this country has a perfect investment climate and a stable economy. Due to the absence of corruption and unnecessary bureaucracy, you will be able to put all your efforts into developing your business. Secondly, a huge number of crypto enthusiasts live here, so you can find new clients easily. At the same time, having a license in this jurisdiction allows you to work in many developed countries. Thirdly, a clear and relatively simple legal framework for regulating the crypto industry has been created here. If you are willing to work honestly and openly, no problems will arise. As we can see, many favorable factors exist for starting your own crypto business in this country. And the costs associated with obtaining a cryptolicense are fully justified.
We provide services for obtaining a crypto license and in the following jurisdictions:
Crypto license Switzerland
Yes, virtual currency exists legally in the country. Relatively stable rules have been created here to regulate this industry.
Cryptocurrency is subject to state and Cantonese taxes. Every crypto organization that operates in this jurisdiction is required to pay taxes regularly.
FINMA and SFTA control crypto activity in the country. These regulators ensure that crypto businesses are not used for money laundering, fraud, and financial terrorism.
Senior Partner, Lawyer
Senior Partner, Lawyer