In the context of cryptocurrency adoption, there are probably few countries more popular than Switzerland. While regulation is gradually moving forward, the Swiss government and cantons have maintained a proactive, dynamic approach, allowing cryptocurrency companies to innovate without being hindered by outdated legislation. If you are looking for a transparent regulatory framework, a strong crypto community, and a favorable tax system for your licensable crypto activities, Switzerland could be a promising jurisdiction.

Swiss Cryptocurrency License

The package «Company and Cryptocurrency License in Switzerland» includes:

• Company establishment service fee

• Opening a capital freeze account

• Notarization and delivery of documents

• Official fees at the Commercial Registry

• Independent Director Nomination Service

• AML/Compliance Officer Services

• Registered Address

• Assistance in obtaining permits

• Fill in the application form and submit it to the competent authority

• Analysis of existing documents, websites, structures

• Terms and Conditions, Internal Policies

  
  

The Swiss Financial Market Supervisory Authority (FINMA) is responsible for overall oversight of the integrity of cryptocurrency-related activities in Switzerland. The agency grants cryptocurrency licenses and monitors compliance with anti-money laundering regulations, among other duties.

The most progressive states strive to attract and accelerate the growth of cryptocurrency companies by fostering a collaborative ecosystem. For example, Zurich’s Crypto Valley Association promotes collaboration between market participants and authorities through networking events, education, working groups, and the production of relevant content.

Thanks to the strong support provided by the Association, today the Canton of Zurich is proud to be home to 14 blockchain unicorns with a market capitalization of more than $1 billion (more than €9.32 billion). If you are an aspiring cryptocurrency holder, considering applying for membership will open the door to one of the most advanced and influential blockchain communities.

Cryptocurrency Regulation in Switzerland

Cryptocurrency legislation in Switzerland

The Federal Act: Act on the Adaptation of Federal Law to the Development of Distributed Ledger Technologies (DLT Act) is one of the main laws that determines how cryptocurrency activities must be conducted in Switzerland. It sets out rules for cryptocurrency licensing, trading, anti-money laundering, financial market infrastructures that trade cryptocurrencies, and bankruptcy. In essence, the DLT Act emphasizes protecting the integrity and stability of the Swiss financial market, with blockchain companies being held liable for any losses caused to investors due to misleading information or violations of legal requirements.

The DLT Act identifies the Swiss National Bank as the protector of financial market infrastructures. Its responsibilities include supervising financial market participants such as distributed ledger trading venues, central securities depositories and payment systems under the Financial Market Infrastructure Act. At the request of the Swiss National Bank, each regulated company must be prepared to provide all necessary information and documents to identify risks that threaten the stability of the financial market system.

Certain cryptocurrency companies operating or established in Switzerland are legally required to comply with anti-money laundering regulations under the following legislation:

• Anti-Money Laundering Law

• Anti-Money Laundering Act

• FINMA Anti-Money Laundering Directive

Anti-money laundering legislation generally applies when customer assets are transferred to the accounts of cryptocurrency companies, or when payment transactions, currency exchange, asset-based lending or leasing, private wealth management and the issuance of payment instruments are included in the cryptocurrency business model.

The following cryptocurrency tokens are recognized and regulated by Swiss authorities:

• Payment Tokens – An electronic payment instrument used to transfer monetary value (e.g. Ethereum and Bitcoin)

• Asset-backed tokens – Backed by tangible assets and usually issued in a security token offering (STO) to raise funds

• Debt tokens promise the issuer to repay all or part of the investment plus interest

• Equity tokens do not promise the issuer to repay the investment, but token holders are entitled to a cash payment

• Participation tokens do not commit the issuer to repay the investment, but the token holder is entitled to a proportional share of the issuer’s future profits

• Utility tokens provide digital access to a digital system or service, primarily on a specific distributed ledger platform (no license required if not considered a security)

Depending on the type of token used to carry out economic activity, securities, banking and collective investment legislation may also apply. It is worth noting that even if payment tokens are not recognized as legal tender, FINMA does not consider them to be securities because they are designed to be used as a means of payment.

Regulation of initial coin offerings (ICOs) depends on the type of tokens being offered. ICOs involving payment tokens are subject to anti-money laundering laws, while ICOs involving asset-backed or utility tokens must comply with securities regulations under the Swiss Code of Obligations.

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Types of Cryptocurrency Licenses in Switzerland

If your cryptocurrency activities fall into any of the regulated categories, you must apply for one or more cryptocurrency licenses before commencing economic activities in Switzerland. If no license is required, the cryptocurrency business can register as a self-regulatory organization (SRO) with the Financial Market Supervisory Authority (FINMA), which must also comply with certain administrative requirements.

Depending on the business model and the nature of cryptocurrency-related activities, FINMA distinguishes between four types of licenses:

• The most popular are financial transaction licenses or financial intermediary licenses, which allow licensees to accept government deposits of up to 100 million Swiss francs (about 96 million euros), or to store and trade crypto assets that cannot be invested or pay interest on them.

• A banking license allows the acceptance of deposits from individuals or legal entities without restrictions.

• An investment fund licence allows fund managers to oversee collective fund assets on behalf of clients.

• A DLT trading venue license allows for multilateral trading of DLT securities.

All applicants must meet the following criteria:

• Setting up a limited liability company (AG), unlimited partnership or limited liability company (GmbH) in Switzerland

• Develop a business plan and conduct a detailed review of the company's business and internal operations

• Establish a registered office in Switzerland, where the company's business and local employees operate

• Establish internal AML/CFT procedures (KYC, etc.)

• Hire a regulatory auditor approved by the Financial Markets Authority

Examples of situations where your cryptocurrency company needs a license:

• Transfer client assets to your company account

• The number of clients your company has accepted for cryptocurrency assets exceeds 20

• Your company manages client assets in collective investment funds

• Your company's advertising promotes accepting client assets or managing assets in collective investment funds

Cryptocurrency Licensing Process in Switzerland

First, you must make sure that your crypto-related activities are regulated in Switzerland and require a license. The Financial Market Supervisory Authority (FINMA) will help you determine this before completing your application. To make your business case even stronger, we strongly recommend consulting a legal expert who can help you tick all the required items and present your information correctly. If you need help with this, our team here at RUE will be happy to provide guidance.

Before completing the application, you must prepare all the required documents in the best knowledge and in an orderly manner, otherwise the licensing process may be hindered. If there are no obstacles, usually the process takes 4 to 6 months.

The following documents are mandatory for the individuals involved:

• Copies of identification documents of the company's owners and directors (passport or ID document)

• For foreign citizens - a copy of your residence permit in Switzerland

• Proof of residential address of each owner and director

• Copies of work references, resumes, and educational certificates of the company's owners and directors reflecting relevant education and experience

• Swiss Criminal Record Certificate, certifying no criminal record (original, must be no older than six months)

• Foreign citizens who have lived in Switzerland for less than five years must submit a criminal record certificate issued by their last country of residence or home country.

• Debt Enforcement Registration Certificate (original, must be no older than six months)

The following documents related to the applicant company should be properly prepared:

• Company documents (such as Articles of Association)

• A business plan including budgets (balance sheet and income statement) for the next three financial years, including optimistic, realistic and pessimistic scenarios, as well as geographic coverage, group structure and target markets

• Information about business premises, infrastructure and personnel

• Proof of source of funds and public deposit information

• Details of share capital (structure, allocation, par value, etc.)

• Business model documentation (AML policy, data security, etc.), which should include a review of the hardware and software used for economic activities, including third-party systems

• Detailed information on customer deposit storage

• If the application is submitted by a legal representative, a power of attorney (certified copy of the power of attorney) is required

• Application for a complete and completed trial

• List of all participants who directly or indirectly own at least 5% of the voting rights and equity (down to the level of ultimate beneficial owners, including voting and equity)

• Shows the number of all participants who are directly or indirectly qualified up to the ultimate beneficiary level (including information on participation levels), by voting shares and capital

• Information about any agreements and other means of control or substantial influence over the applicant

Paying administrative and licensing fees is another important step. Application fees start at 1,750 EUR, and successful applicants will also have to pay annual monitoring fees of at least 3,500 EUR.

Since cryptocurrency licenses are granted to companies registered in Switzerland, you must also take the time to set up a company for your crypto project. There are several favorable Swiss company structures that will allow you to start a business without having to go through endless red tape.

When the new company is established and all fees have been settled, it is time to submit your cryptocurrency license application and all required documents to FINMA, who may also request further information, documents or audits. You will also need to schedule an appointment with the agency to present your business case for the license.

Although applications can be filed in either the Swiss official language or in English, some documents (such as the Articles of Incorporation and the organizational structure documents) can only be filed in one of the Swiss official languages. If you require a certified translator, we will be happy to arrange this for you.

Once a license has been granted, it must be borne in mind that any changes in the structure and activities of the license holder (key documents, senior management, technical setup, etc.) must be reported to FINMA. In the event of major changes, approval must be obtained from this body before commercial activities can be resumed.

How to Start a Crypto Company in Switzerland

If you have already convinced yourself that there is value in starting a crypto business in Switzerland and that your business model meets the conditions for one of the crypto licenses, incorporating a Swiss company is an imminent step. Depending on the legal business structure you choose and the quality of your documentation, company incorporation can take up to four months.

The most common legal structures for Swiss companies conducting crypto activities are the Limited Liability Company (GmbH) and the Stock Corporation (AG). Both can be set up by a sole shareholder who is legally resident in Switzerland but does not have to be a Swiss citizen, but must hold a B permit that allows them to start economic activities or be employed in the country.

Key aspects regarding the establishment of the GmbH and AG crypto companies:

• Can be established by signing a notarial deed

• Company formation may cost 1,500–2,000 CHF (approximately 1,475–1,967 EUR) including a notarial deed

• At least one shareholder and one director are required, who must be suitable

• In most cases, the appointment of an auditor is mandatory

• Must have a registered office and employ local staff

• It is mandatory to appoint a Swiss corporate lawyer

• Internal AML and other risk management policies must be designed that are relevant to the specific circumstances of the proposed economic activity

• Allowing to open operating company bank accounts in foreign banks

• Shareholders do not have to be Swiss citizens

The standard initial share capital requirements are as follows:

• GmbH – 20,000 CHF (approximately 19,668 EUR), which must be transferred to a Swiss bank account or provided in the form of cryptocurrency or other assets

• AG – CHF 100,000 (approx. EUR 98,352), of which at least 20% and no less than CHF 50,000 (approx. EUR 49,176) must be transferred to a Swiss bank account or provided in cryptocurrencies or other assets

However, the initial share capital requirements may vary depending on the type of crypto license or if you are applying for multiple licenses. For example, a Fintech license applicant must transfer the full amount of 300,000 CHF (approximately 289,000 EUR) into the initial share capital account.

The following documents are required to set up a Swiss company:

 Identification documents of the founders

 Residence permit

 Copy of the rental agreement, proving the existence of a registered office in Switzerland

 Articles of Association

 Articles of Association

 Stampa statement certifying that there are no other forms of contributions and asset recovery other than those listed in the Articles of Incorporation

 Lex Friedrich statement, which is a certificate granting foreign citizens permission to buy real estate in Switzerland

To form a Swiss company, you should take the following steps:

• Register your company name through the EasyGov platform, which will automatically enter your company into the Swiss Trade and Corporate Register and assign a unique corporate ID number (UID)

• Make sure the name has not been registered by checking the Central Business Name Index

• Open a Swiss bank account and transfer the required minimum share capital

• If the capital exceeds CHF 1,000,000 (approx. EUR 983,526), a stamp duty is levied on the minimum share capital at a rate of 1%, which is payable within 30 days of the company registration date

• The Swiss Bankers Association has published guidance on opening corporate bank accounts for blockchain companies, which can be viewed here: here

• Find a notary who will verify the Articles of Incorporation and other corporate documents and prepare the incorporation application after you provide proof of the transferred initial share capital

• Companies with a turnover exceeding CHF 100,000 (approx. EUR 98,352) must register with the commercial register for a fee of CHF 600 (approx. EUR 590)

• Notarized documents can be submitted by post or online through a dedicated website

• Register with the Federal Tax Administration and state tax agencies

• Register your employees with the Federal Social Insurance Office and the State Compensation Office (Ausgleichskasse)

• Get business insurance

• Apply for a crypto license granted by FINMA

While the incorporation application is being processed, the Commercial Register publishes its details in the Swiss Business Newspaper, at which point the new company is considered fully registered.

The nature of crypto activities determines the administrative requirements for each company and the level of involvement of the regulator, so it is crucial to clearly define the scope of the crypto business before initiating the company formation process.

Switzerland

capital	population	currency	GDP
Bern	8,636,896	CHF	$92,434

Crypto taxation in Switzerland

The tax treatment of crypto companies depends on the nature and purpose of their economic activities. In general, cryptocurrencies are not considered legal tender. Instead, most of them are classified as assets and are therefore subject to relevant tax laws.

Another decisive factor is tax residence status. Tax residents are taxed on their worldwide income, while non-resident companies are taxed on income derived from Switzerland.

The Swiss tax administration system is multi-layered, as responsibility is shared between the Federal Tax Administration (FTA), the cantons and the municipalities. Federal tax rates are stable, while cantonal rates are determined annually and published on each canton's official website. Although the tax framework varies by location, the tax year generally remains the fiscal year.

Most crypto license holders must pay the following taxes at the federal, state, or municipal level:

• Corporate Income Tax (CIT) - 12%-21%

• Capital Gains Tax (CGT) - 0.001%-0.5%

• Value Added Tax (VAT) - 7.7%

• Withholding Tax (WHT) - 35%

• Social Security Contribution (SSC) - 0.5%-5.3%

• Issue Stamp Duty (ISD) - 1%

Corporate income tax is levied at federal, state and municipal levels. Federal corporate income tax is levied at a rate of 8.5% on pre-tax profits. State and municipal corporate income taxes vary considerably, as states and municipalities have different tax frameworks.

For example, in Zurich, where Crypto Valley is located, the cantonal corporate income tax is only 11.85%, which is one of the lowest rates in Switzerland. On the other hand, the canton of Bern currently levies a 21% tax. If you are not sure which Swiss location is most advantageous for your crypto business model, our team here at RUE will be happy to provide personalized consultation.

Capital gains tax is levied only at the state level on certain gains arising from specific crypto activities. First, capital raised in an initial coin offering (ICO) is not considered income for the issuer, and the issuance of new tokens is not considered a transfer for tax purposes. If the transfer of payment tokens is not a trading transaction, they may be considered securities and taxed as capital gains under income tax laws.

One of the rare exceptions where cryptocurrencies are considered legal tender is the application of VAT. Transactions in payment tokens, including trading, are not subject to VAT, as such cryptocurrencies are means of payment and are therefore similar to traditional currencies. All commissions and fees associated with these transactions are considered financial service fees and are not subject to VAT.

Switzerland has about 100 international agreements on the elimination of double taxation, enabling taxpayers to protect their income (wealth, dividends, etc.) obtained outside Switzerland from double taxation. Usually, using the credit method, the company needs to meet certain conditions.

In addition, under certain conditions, companies with primarily overseas operations may qualify for state and municipal tax exemptions and effective tax rates of 7.83%-11% on profits derived from foreign sources.

Reporting and auditing requirements

In Switzerland, financial reporting is regulated by the Swiss Code of Obligations, and any company with revenues exceeding CHF 500,000 (approximately EUR 491,763) must prepare financial reports. Crypto companies should keep in mind that they can choose to report in Swiss francs or their functional currency, and that reports can be generated in the official language of Switzerland or in English. Signed hard copies of the annual report and the audit report must be kept for 10 years.

The level of audit varies depending on the size of the company and the scope of its activities. A typical annual audit costs around CHF 4,500 (approximately EUR 4,425).

A company is required to undergo an ordinary audit if it exceeds both of the following amounts in two consecutive financial years:

• Balance sheet total CHF 20 million (EUR 19,670,520)

• Sales of more than CHF 40 million (approx. EUR 39,341,040)

• The annual average number of full-time employees is at least 250

If the company does not exceed at least two of the above two amounts, it should undergo a limited audit, which costs approximately CHF 2,500 (approximately EUR 2,458).

Swiss companies are fully exempt from audits if they meet the following conditions:

• The number of full-time employees per year shall not exceed 10

• Although subject to limited audit, all shareholders voted to eliminate the audit

In addition to financial reporting and audits, all crypto licensees must be prepared to share detailed AML-related reports with regulatory authorities to demonstrate that they maintain integrity in their economic activities.

If you are planning to operate your crypto business in the most prestigious jurisdiction, our highly qualified and experienced consultants at (RUE) will be happy to assist you. We are well aware of and closely follow Swiss crypto-related legislation and can therefore guide you through the process of company set-up and obtaining a crypto license. Furthermore, we are more than happy to help you with financial accounting and reporting. Book a personalized consultation now and start your journey in this lucrative market.

In addition, lawyers at  provide legal support to crypto projects and assist in adapting to MICA regulations.

Swiss Crypto Regulation: A Comprehensive Guide to Getting a Crypto Trading License in Switzerland in 2024

Switzerland is renowned for its solid financial system and progressive stance towards cryptocurrencies, making it a prime location for cryptocurrency businesses aiming to build a strong reputation in global markets. This article delves into the nuances of obtaining a cryptocurrency trading license in Switzerland, providing insight into the regulatory framework, application process, and the benefits of obtaining a license in this prestigious jurisdiction.

Overview of Switzerland’s Cryptocurrency Regulatory Framework

Switzerland’s regulatory approach to cryptocurrencies is comprehensive and is governed by the Swiss Financial Market Supervisory Authority (FINMA). Cryptocurrency businesses must comply with strict regulations designed to increase transparency, prevent money laundering, and protect investors.

Different Types of Cryptocurrency Licenses in Switzerland

Switzerland offers various licenses for different cryptocurrency activities:

• Swiss Cryptocurrency Exchange License: Allows the operation of cryptocurrency and fiat currency trading platforms.

• Swiss Cryptocurrency Broker License: Allows brokering of cryptocurrency transactions.

• Swiss cryptocurrency exchange license: Applicable to businesses that directly engage in the buying and selling of cryptocurrencies.

• Swiss VASP Cryptocurrency License: For providers offering a wider range of crypto services.

The application process for a Swiss cryptocurrency license

Obtaining a cryptocurrency license in Switzerland involves a rigorous application process that includes submitting a detailed business plan, proof of compliance with anti-money laundering regulations, and demonstration of operational integrity and security measures.

Financial Aspects of Obtaining a Cryptocurrency License

The cost of a cryptocurrency trading license in Switzerland is an important consideration for businesses. While Switzerland may not offer the cheapest cryptocurrency license in Switzerland, the investment can be justified by Switzerland’s access to stable, reputable and globally integrated financial markets.

Advantages of Operating a Licensed Cryptocurrency Business in Switzerland

Licensed businesses benefit from Switzerland’s international reputation for financial excellence and regulatory compliance, which significantly enhances their credibility with partners and investors around the world.

Challenges and regulatory considerations

Navigating the Swiss regulatory environment can be challenging due to its complexity and the high standards set by FINMA. Cryptocurrency businesses must be prepared to meet these standards on an ongoing basis to avoid regulatory penalties.

Obtaining an existing cryptocurrency license

For those seeking to enter the market more quickly, acquiring an existing cryptocurrency exchange license for sale in Switzerland may be an option. This path requires thorough due diligence to ensure that all regulatory and compliance measures are up to date.

Conclusion: Obtaining a Swiss cryptocurrency exchange license is an important step for any cryptocurrency business that aims to leverage the trust and stability associated with Swiss regulatory practices. By carefully planning and complying with Swiss regulatory requirements, cryptocurrency businesses can thrive in this innovative and competitive market.