Continuing writing about friendly jurisdictions, today I'd like to talk a bit about Switzerland as a crypto and blockchain friendly jurisdiction, specially for European actual or future entrepreneurs. If you think about starting a crypto project in Europe, this article might help you with legal issues in one of the most crypto friendly country, Switzerland, along with other countries such as Liechtenstein, Lithuania, Malta or Estonia.
The Swiss Canton of Zug is declared as a hub for cryptocurrencies and Fintech start-ups. On November 2, 2017, the Commercial Register Office in the Canton of Zug started accepting bitcoin and ether as payment for administrative costs. Furthermore, the Commercial Register accepts cryptocurrencies as a contribution in kind for purposes of forming a company and in the city of Zug, municipal services (resident registration) of up to CHF200 can be paid with bitcoin.
In Switzerland, Security Tokens Offering are legal and regulated under a series of laws defined by FINMA, the local financial markets regulator, and are governed by the same laws as traditional securities, such as stocks, bonds, etc. In addition to that, they are also subject to KYC laws as well as to Swiss banking regulations. Like the UK’s FCA, FINMA has defined three classes of digital tokens: payment tokens, asset tokens, and utility tokens.
In August 2019, the Swiss financial regulator has awarded banking and securities dealer licences to 2 new “crypto banks”; SEBA and Sygnum, allowing them to operate in the world of tokenized digital securities.
In September 2019, Swiss Digital Exchange (SDX), the blockchain-based utility owned by Swiss stock exchange SIX, has organized a global consortium of financial institutions to back its “initial digital offering” (IDO) in June-July 2020. The IDO would be like a traditional IPO, except that the shares are to take the form of security tokens issued on SDX’s platform.
Just few days ago (March 2020), YAPEAL has become the first financial institution in Switzerland to receive a fintech banking license, to provide intelligent financial services that fit in with clients lifestyles, offering also a Visa debit card. YAPEAL will charge simple flat fees rather than the complex system of hidden fees that banks typically charge clients.
One great advantage of this license is the cost. For example, fintech license banks only need a capital of at least 2 million CHF, compared to the minimum amount of 10 million CHF for a full banking license.
A disadvantage is that it is expensive to opening a Crypto Company, an A.G. (Corporation/Joint-stock Company) in Switzerland:
Opening company cost = 3000 francs (CHF)
Setting up a business address = 1500 CHF/year
Director, Swiss Resident = 4000 CHF/year
Social Capital = 100,000 CHF (from which a minimum of 50,000 CHF has to be deposited in the bank at the beginning).
Another legal entity, Limited Liability Company (GmbH/Sàrl), requires a minimum shareholders equity of 20,000 CHF, of which 10,000 CHF must be fully paid for. At least one managing director who is authorised to sign on behalf of the company must be resident in Switzerland.
References:
https://www.swissinfo.ch
https://www.coindesk.com
