Switzerland has been at the epicentre of the world's wealth management industry for decades now, with Deloitte highlighting that the Swiss hold more than 27% of global wealth.
As the country looks to become a leader in blockchain technology, Switzerland has unveiled some of the most modern and progressive business laws to keep investors coming to the country. In Switzerland, you're able to pay for goods, services and even public transport using Bitcoin and this is great news for investors looking to launch cryptocurrencies in Switzerland. It means that there's already a network of customers waiting to use these virtual currency services.
On top of those benefits, a few of Switzerland's tax-free policies mean that there are more rival(s) and a great deal of innovation in the cryptocurrency field in the country. Investors looking for a fast-paced and high return business landscape will be happy to know that in Switzerland, cryptocurrency investment reigns supreme.
What is the future of the blockchain and cryptocurrencies in Switzerland?
What makes Switzerland so attractive for crypto investors?
One of the biggest drivers behind the push to accept cryptocurrencies in Switzerland were the consequences of the country ending its banking secrecy policies in January 2017. This lead to investors becoming bearish on the country and thus backing out.
The Swiss Government had no other choice than to push to become the global cryptocurrency leader in order to fill the gap left by the investors retreating after banking secrecy ended. Financial professionals in government and in most business sectors developed new legal frameworks and innovated in countless different ways in order to make sure the country was legally compliant with global standards.
As a result of the push for compliance, Switzerland was declared almost entirely compliant with the Global Forum on Transparency and Exchange of Information for Tax Purposes. This now means investors and businesses in crypto can now focus on their migration to Switzerland.
Switzerland offers an attractive Environment for blockchain startups and cryptocurrencies.
The biggest benefit to cryptocurrency businesses in Switzerland would have to be the outpouring of support from both the private and public sectors. This support makes investors and consumer uptake of crypto-based services a lot greater in Switzerland than almost anywhere else in the world. The local economy is also exceptionally liberal toward cryptocurrencies in Switzerland and that means taxes are low and business assistance is easier to come by.
However, one of the biggest supporters of crypto in Switzerland are the big banks like UBS, who are developing their own cryptocurrencies which are tied to central banks and backed by fiat currency. On top of UBS, the Swiss Bank, in partnership with Deutsche Bank, is also developing their own Utility Settlement Coin which enables financial markets to distribute payments and transactions in a secure way by using the blockchain.
In summary, the environment for cryptocurrencies in Switzerland is very positive and is extremely investor and developer focused. That means that companies working in the crypto field are far more likely to be successful and receive the assistance they need.
If you need extra assistance or more information on the Swiss business environment for cryptocurrencies then feel free to reach out to our team for some more information.
Switzerland is an "unofficial" Crypto Haven
Featuring a lively economy that promotes the development of anything crypto or blockchain related means that investment in Switzerland's fintech industry has thrived over the past few years. An example of this growth has been the massive $550 million in ICO funds raised in just 12 months, making Switzerland home to more than 38% of all European ICO funds – or 15% of the entire global market.
In a similar way to IPOs, an ICO is a newly developed way that companies are using to raise funds for their digital currencies and to further develop their services. Simply speaking, an investor can purchase a cryptocurrency with a fiat currency and this is then converted into a token. This token is the currency being sold in the ICO.
Tax and ICO Regulation
One of the main reasons for Switzerland sitting at the top of the ladder when it comes to ICOs is down to the great tax and business laws. All distribution of profits made on equity tokens is taxed at a withholding tax rate of 35%, though this could have some flex given that there isn't a solid framework in place to tax ICOs.
Also, equity tokens could be subject to a single one-time capital tax of just 1%, unlike typical debt tokens.
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FINMA published guidelines on ICOs regulations
It's no secret that ICOs and other crypto or blockchain activities are difficult to regulate, though FINMA is still doing its best to create frameworks and laws to keep ICOs in check. In a recent report, FINMA outlined that in future they will be assessing the function and purpose of each token and enacting taxes or duties on each ICO individually.
Tokens are classified by FINMA in three categories:
- Payment Tokens which are used as a means of payment for any good or service
- Utility Tokens which are supplied to allow access to an application or service
- Asset Tokens which are representative of assets like interest payment or dividends. These are similar to equities or bonds.
Though it's important to remember that FINMA isn't trying to make it difficult for investors, they're simply developing and enacting new frameworks to prevent money laundering or terrorist funding.
Choosing Switzerland as your home base for a blockchain or cryptocurrency is one of the best business decisions you can make when you take into consideration that the country's government is forward thinking and banking and financial systems are heavily assisted by technology.
The country is already home to near-universal Bitcoin acceptance and it's regarded as one of the first companies in the world to do so.
Such a strong, stable and dynamic stance of cryptocurrencies in Switzerland truly makes it one of the most advanced and dependable options for any business developer or investor. If you do however require extra assistance with your launch or ICO then feel free to reach out and speak to our fintech legal teams.