License for cryptocurrency exchange in Switzerland
In 2021, Switzerland made important amendments to a number of its legislative acts, which in the future can create a solid legal basis for the cryptocurrency financial trading market based on distributed ledger technology (DLT) and Blockchain.
The canton of Zug (the administrative center is the city of Zug) is home to the so-called Crypto Valley Association, an independent, state-supported association created to create the world’s leading Swiss ecosystem of blockchain and cryptographic technologies.
The main types of licenses for carrying out activities in the field of cryptocurrencies
Banking license
Obtaining a Banking license is necessary if the company will:
1. Accept deposits from more than twenty clients and the amount exceeds more than 100 million CHF or cryptocurrency assets;
2. Accept or offer to accept deposits from the public on a professional basis up to CHF 100 million and invest or pay interest on government deposits;
3. Refinance itself heavily with loans from more than five banks that do not own significant assets to finance any number of individuals or companies with which they do not form their own economic unit.
FinTech license
The FinTech license allows companies to accept government deposits of up to CHF 100 million or crypto-currency assets, as long as they are not invested and do not pay interest.
After receiving an application for a FinTech license, FINMA evaluates the commercial activities of the company, and may also request a license audit report from the applicant as part of the licensing procedure. The duration of the licensing procedure depends on the complexity of the project, as well as the quality and completeness of the application.
DLT trading system license
Licensing as a DLT trading platform allows multilateral trading of DLT securities and is governed by the Financial Market Infrastructure Act (FinMIA). The goal is to simultaneously exchange offers among multiple participants and enter into contracts based on non-discretionary rules (“retail clients”), store DLT securities in a central vault based on uniform rules and procedures, and settle DLT securities transactions based on uniform rules and procedures.
Investment fund license
The fund can only invest in established crypto assets with a sufficiently large trading volume. In addition, investments must be made through established counterparties and platforms that are located in a Financial Action Task Force (FATF) member country and are subject to relevant anti-money laundering regulations.
Becoming a member of Self-regulatory organizations (SRO)
Membership in the SRO first of all gives the right to provide financial intermediation. This includes the following activities: investment activities, third party asset management, lending operations, services related to payment transactions, trading and management of securities, investment advice.
Basic requirements for the company
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Authorized share capital |
100 000 – 300 000 CHF |
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Supervisory fee |
3 500 CHF |
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Income tax |
12% |
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Requirements for board members and geographical location |
The structure of the company: – one shareholder (no restrictions on nationality or residency); – one director (cannot be a legal entity and does not have to be a shareholder of a corporation). Secretary / Resident Agent – The company may appoint a secretary, but this is not required. General Meeting – Shareholders must hold an annual general meeting within 6 months of the end of the financial year. The meeting must take place in Switzerland, can only be held physically. Visitation via videoconference, teleconference or circular letter is not permitted. Alternatively, shareholders may participate through proxies. |
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Office availability |
A mandatory requirement is to have a registered office in Switzerland. |
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Requirements for an annual audit |
Audit checks can be scheduled and also unscheduled, the documents must always be ready and filled out. |
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Minimum list of documents for applying for a license |
1) A detailed summary of the shareholder, director, board members and employees; 2) Notarized copies of diplomas of each shareholder, director and employee; 3) Certificate of no criminal record for each of the above; 4) Office lease agreement; 5) Organizational structure of the company; 6) Charter; 7) Detailed business plan describing the activities of the company (preferably with a detailed financial forecast for at least 3 years); 8) AML/KYC internal procedural rules and policies; 9) Developed methods for resolving financial disputes in accordance with Swiss law; 10) Confirmation of the contribution of the authorized capital; 11) Confirmation of the source of funds. NB! If the documents are not in English, they must be accompanied by a notarized translation. If the shareholders and/or directors are legal entities, a complete set of apostilled company documents must be provided. |
Services offered by us within the framework of obtaining a license.
LEGAL ADVICE ON THE POSSIBILITY OF OBTAINING A LICENSE, TAXATION, OPENING ACCOUNT
COORDINATION WITH FINMA IN THE PROCESS OF CONSIDERATION OF THE APPLICATION FOR OBTAINING A LICENSE
FULL LEGAL SUPPORT DURING REGISTRATION OF A COMPANY, REGISTRATION OF A LEGAL ADDRESS, IF NECESSARY, IN SEARCH AND HIRE EMPLOYEES
OPENING ACCOUNT IN PAYMENT SYSTEM OR BANK
ASSISTANCE IN PREPARING DOCUMENTS FOR OBTAINING A LICENSE:
- ✔ legal analysis of the prepared documentation before filing an application;
- ✔ translation and notarization;
- ✔ preparation of a full package of documents, filling out an application and support when submitting to FINMA;
- ✔ preparation of documentation in accordance with the Anti-Money Laundering Act (AMLA) and other company guidelines;
ACCOUNTING AND LEGAL SUPPORT OF THE COMPANY
To begin with, we recommend that you decide on the direction of your company, the expected amount of income and the operations performed in order to correctly calculate all the nuances. From these facts will depend on the size of the initial authorized capital, the amount of the annual fee and additional costs that may arise during the activity
Advantages of obtaining a license in Switzerland
Switzerland is indeed one of the expensive jurisdictions for starting a business, but it has a number of advantages:
✔ Switzerland is one of the strongest and most stable economies and, thanks to its “neutral” position, provides great stability even in times of any regional instability, and also has a stable political and economic environment;
✔ Switzerland has extensive experience and relevant legal framework for the operation of companies within the framework of DLT and Blockchain;
✔ The Swiss government is actively supporting the crypto environment and has released ICO guidelines and documents;
✔ Relevant bodies such as FINMA and SBA are available and open to cooperation with companies;
✔ Low tax rates and tax exemption on dividends.
Documentation
- Guidelines for license applications for banks and securities dealers dated 20 August 2012
- FinTech License Application Guidelines (Guidelines for FinTech license applications dated 2 August 2021)
- Guidelines for applications concerning licensing as a DLT trading facility dated 2 August 2021