Crypto license in Switzerland

Switzerland is a popular European jurisdiction for the crypto business. Many are familiar with a stereotype that the Swiss banking system is too conservative. In 2013, the first crypto companies appeared here, and Crypto Valley Association in the canton of Zug is now considered the world’s leading blockchain technology center and the perfect place for crypto startups and ICOs. Fintech projects are 100% lawful, but in order to operate legally, you need to obtain a crypto license in Switzerland. Here we’re explaining how to acquire a Switzerland crypto exchange license.

Тhe Advantages of Obtaining a Switzerland crypto license

• possibility to manage cryptocurrency exchange (including the provision of services of tokenized securities trading) and cryptocurrency wallets, as well as to conduct ICOs;
• stable local economy and neutral politics;
• favorable taxation system;
• transparent legal and regulatory framework as well as regulatory system for blockchain technology;
• support for fintech companies at the state level.

Legislation And Regulators Of Crypto Sector

The Financial Market Authority (FINMA) and the Federal Tax Administration (SFTA) are responsible for the legal regulation of the crypto sphere in this jurisdiction. FINMA regulates banks, crypto projects, insurance companies, issues licenses for cryptocurrency activity, monitors compliance with AML and KYC rules. Securing a crypto license in Switzerland requires a clear demonstration of operational compliance.

In 2021, the law “On Adaptation of Federal Law to the Development of Distributed Electronic Registry Technologies” came into force. It spells out rules for cryptocurrency licensing, trading, and anti-money laundering. Fundamental legislation and regulations include the Banking Act and Regulation, as well as relevant FINMA requirements.

Here, cryptocurrencies are considered as assets or property to be legally exchanged and used for commercial activities. Businesses can leverage these classifications safely under the framework of a Switzerland crypto license.

According to the Swill legislation, there are three types of cryptocurrencies (tokens) recognized:

• payment tokens;
• asset tokens;
• utility tokens.

Types of crypto exchange license In Switzerland

In this European jurisdiction, the following types of Switzerland crypto licenses are issued:

• the fintech license permits the acceptance of public deposits on a commercial basis of up to 100 million CHF, as well as cryptocurrency assets without the right to invest or pay interest on deposits;
• the banking license for companies that hold and manage digital deposits in unlimited quantities from individuals or legal entities;
• an investment fund license gives the right to make investments in crypto assets and control them on behalf of depositors;
• DLT (Distributed Ledger Technology trading system license) trading platform license allows trading in tokens and securities stored in a distributed electronic registry.

There is another way to work with cryptocurrency — join a Self-regulatory organization (SRO) which gives the right to provide financial intermediation such as consulting, credit operations, customer asset management, payment services, securities trading.

Taxation Of Cryptocurrency Projects In Switzerland

The federal income tax rate is 8.5% while the cantonal tax rate varies between 11% and 24% and may change annually. The world income of Swiss tax companies is subject to local taxation. Non-resident companies are taxed on income earned in Switzerland. Companies that operate under a crypto license in Switzerland must also comply with specific cantonal corporate tax rules.

How To Obtain Crypto License In Switzerland

It’s important to explore the standards that need compliance in order to secure a Switzerland crypto exchange license. The following conditions must be met to obtain any type of cryptocurrency licenses in Switzerland:

• obtain a business permit or register as a commercial enterprise;
• establish an AG or GmbH company;
• develop a business plan with an analysis of the activity and a financial forecast for three years with different scenarios;
• register a Swiss address;
• pay a minimum share capital of 100,000 CHF (in some cantons it is allowed to pay in cryptocurrency);
• open a bank account;
• assign at least one resident of Switzerland to the position of a director;
• engage the auditor and local director;
• develop AML and KYC policies in accordance with Anti-Money Laundering Act (AMLA);
• fill out the application.

Required Documents for Obtaining a Cryptocurrency License in Switzerland

The exact documentation required may vary depending on the specific tier of the Switzerland crypto exchange license being applied for, but here are the general documents needed:

• copies of identity documents of the owners and directors;
• copies of recommendations, CVs, and certificates confirming the relevant education and related work experience of the owners and directors;
• certificate of no criminal record (the original must not be older than six months);
• corporate documents of the applicant company;
• evidence of the lawful origin of funds;
• information on capital structure and allocation;
• AML policy with corresponding software;
• information on custody of customer deposits.

Why You Should Address SBSB Fintech Lawyers Experts For Obtaining Cryptocurrency Licenses In Switzerland 

If you need to obtain a cryptocurrency license in Switzerland, contact SBSB Fintech Lawyers. Our team is ready to guide you through the process of securing a Switzerland crypto license. Since 2013 we have been working with FinTech and Crypto areas, therefore, we offer each client an individual solution, taking into account the business model of a company. Our specialists will help to choose the optimal type of Switzerland crypto exchange license and prepare a set of documents, legalize the crypto-business in accordance with Swiss legislation, and provide full legal support.