How is the crypto business regulated in Switzerland?

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.

Basic rules for regulating the exchange of crypto assets

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.

crypto regulated in Switzerland

How is a crypto activity regulated?

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.

Regulatory classification of tokens

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:

  • Those that are used only as a payment method;
  • Those that provide access to a digital application or service that is operational at the time the asset is purchased;
  • Those represent a debt or equity claim on the issuer or a third party.

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.

Securities and investment law

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.

Token transfer requirements

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.

Taxation

Since more than 1,000 companies that operate in the field of cryptocurrencies and blockchain are registered in Switzerland, it can be assumed that taxation in this jurisdiction is very favorable.

There is no separate legislative framework for the taxation of the crypto industry, and such assets are subject to the rules for digital currencies.

The level of tax depends a lot on what tokens you use in your work. So, for example, profits from debt tokens may not be taxed if the profits are from collective fundraising. But regular and one-time interest payments on debt tokens are taxed at source at a rate of 35%. It is challenging to understand such subtleties, so you need to seek help from specialists.


If you want to understand better what amount of taxes you need to pay, depending on the features of the functioning of your organization, we advise you to seek help from our specialists.

Types of commercial organizations regulating cryptocurrency

Several types of commercial organizations can count on obtaining a cryptocurrency license in Switzerland.

Limited Liability Company (GmbH)

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.

Share Limited Liability Company (AG)

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.

Creation of a cryptocurrency company

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.

To begin with, you need to register a company here, prepare the necessary documents and ensure that you comply with all anti-money laundering requirements and protect clients’ data well. You need to think carefully about what type of company you want to open. It will be good to involve an outside expert who will check how your company meets all the requirements. They can give you recommendations on how you can improve the condition of your organization so that there are no problems obtaining a work permit.

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.

You must also open a bank account where the authorized capital will lie. This amount depends on your business model, the services you plan to provide, and many other aspects.

After the preparatory phase is completed, you must apply for a license.

If you want to be sure that you will not get a license refusal, it is better to have qualified lawyers handle all the paperwork.

Conclusion

The legal system in this country is one of the most thoughtful and transparent, but it is challenging to understand all the intricacies. If you decide that you want to work and develop in this country legally, then you can only do so with the help of lawyers. Our company employs specialists with extensive experience who know exactly what you need to pay attention to and how to get a work permit in the shortest possible time.

FAQ

Yes, this is one of the few countries with the most straightforward and understandable rules for regulating this industry.

Yes, you can buy crypto assets in Switzerland. It is better to use companies licensed in this jurisdiction for this.

Yes, crypto asset tax is taxable in this jurisdiction. The tax system in this jurisdiction is quite complex because there are transactions or types of income that are not taxed. To understand all the subtleties, we advise you to seek help from our specialists.

You can exchange crypto assets for fiat in numerous exchanges and the two largest local banks. In the second case, you can minimize the risks and get money immediately in cash.