Advantages of Holding a Crypto Exchange License in Switzerland
Clear Regulatory Framework and Stability
Switzerland’s regulatory environment for crypto is robust and expected to remain stable for the foreseeable future. A cryptocurrency company in Switzerland, armed with a FINMA-issued license, benefits from a trusted legal framework, bolstering confidence among investors and users alike.
Enhanced Financial Infrastructure
The financial landscape in Switzerland presents lucrative opportunities for crypto enterprises. With an array of crypto-friendly banks and financial institutions ready to facilitate cryptocurrency accounts, over 55% of Swiss banks are reportedly planning to incorporate digital asset services in the next few years.
Global Reputation for Excellence
Switzerland’s esteemed global standing for financial security, stability, and innovation can significantly enhance the reputation of licensed crypto exchanges.
Flexible Taxation System
The Swiss tax regime offers a three-tiered income tax structure, allowing businesses to optimize their fiscal obligations by selecting the most favorable canton, with federal rates at 8.5% and cantonal rates varying between 11.9% to 21%.
Types of Crypto license in Switzerland
Switzerland offers a spectrum of crypto licenses to legitimize various cryptocurrency operations, safeguarding both the service providers and their clientele within a secure regulatory framework. Key Licenses Issued by FINMA:
- Banking License: Enables financial institutions to offer traditional and crypto-related banking services, including cryptocurrency storage and trading.
- Fintech License: Popular for financial transactions or intermediation, allowing the holding of public deposits up to 100 million Swiss francs without interest obligations.
- Investment Fund License: Empowers fund managers to oversee collective asset pools on behalf of their clients.
- Securities Dealer License: Essential for entities dealing in the issuance, trading, or brokerage of securities tokens or blockchain-based financial instruments.
- Payment System License: Mandatory for businesses operating blockchain-based payment systems, including stablecoin issuers or decentralized exchanges.
- DLT Trading Platform License: Introduced by the DLT Act in 2021, this license facilitates the operation of a trading platform for DLT securities and other blockchain assets.
Requirements for a Crypto License in Switzerland
- Business Establishment: Initiating a legal entity in Switzerland (e.g., joint stock company, limited liability company) is a fundamental step, laying the groundwork for operational legitimacy within the Swiss jurisdiction.
- Comprehensive Business Plan: A detailed exposition covering the business’s goals, target demographic, offerings, risk assessment, and compliance frameworks is crucial for transparency and strategic planning.
- Capital Adequacy: Ensuring financial resilience with a minimum capital requirement (starting from CHF 20,000) to mitigate operational and financial risks.
- Organizational Integrity: A robust structure is mandatory for efficient management, oversight, and compliance, encompassing a Swiss-based registered office and leadership.
- AML and Compliance Officers: Appointing Swiss-resident officials for Anti-Money Laundering (AML) compliance and overseeing risk management policies reinforces the business’s commitment to regulatory adherence.
- Internal Controls: Implementation of rigorous internal controls and audit mechanisms ensures ongoing compliance with Swiss FINMA crypto regulations and other pertinent legal standards.
- Regulatory Collaboration: Active cooperation with FINMA and other regulatory bodies is indispensable for maintaining operational transparency and regulatory conformity.
Step-by-Step Procedure for Crypto License Acquisition in Switzerland
Phase 1: Preliminary Documentation Collection
Duration: 5 working days
Essentials: Gathering of foundational documents, including shareholder and director IDs, proof of residence, a comprehensive business model, and power of attorney, among others.
Phase 2: Company Formation and Team Structuring
Duration: 4 weeks
Activities:
- Company Registration: Officially establishing your cryptocurrency company Switzerland, which involves selecting a suitable legal structure (e.g., joint stock company, limited liability company) that meets Swiss corporate standards.
- Corporate Documentation: Preparation of all necessary corporate documents, including articles of association, that comply with the crypto banking license Switzerland requirements.
- Strategic Recruitment: Hiring of crucial personnel such as an AML Officer and a Local Director who are residents of Switzerland, reinforcing the company’s commitment to local compliance and oversight.
- Office Establishment: Signing a lease agreement for an office space, securing a physical presence in Switzerland, which is a prerequisite for many types of Switzerland crypto valley licenses.
Phase 3: Licensing Process
Duration: 3-5 weeks
Process:
- Application Drafting: Meticulous preparation of the license application documents, ensuring alignment with the specific type of crypto license in Switzerland being applied for, whether it’s a general crypto license or a specialized license such as a DLT trading platform license.
- AML/KYC Policy Formulation: Crafting bespoke AML/KYC policies that reflect the company’s operational scope and regulatory obligations under Swiss law.
- Regulatory Engagement: Submission of the application to the appropriate Self-Regulatory Organization (SRO) and maintaining open lines of communication with the SRO representatives, addressing any queries or concerns to facilitate a smooth approval process.
Phase 4: Corporate Account Establishment
Duration: 4-6 weeks
Procedure:
- Financial Institution Evaluation: Conducting a thorough analysis of potential banks or Electronic Money Institutions (EMIs) to find those most aligned with the client’s business model and risk appetite, leveraging the crypto-friendly financial infrastructure of Switzerland.
- Documentation Collection: Compiling necessary documents from the client to kickstart the account opening process. This includes detailed information on the flow of funds, source of wealth, business model, key partnerships, and more, tailored to meet the scrutiny of Swiss financial institutions.
- Account Opening Guidance: Providing end-to-end assistance through the account opening procedure, ensuring that the cryptocurrency company meets all the prerequisites and documentation requirements for successful account activation.
Additional Services Related to Obtaining Crypto License in Estonia (VASP authorization)
- Establishment of organizational structure – assistance identifying the appropriate legal structure, incorporation of holding companies in tax efficient jurisdictions, transferring companies shares, designing ownership structure, etc.;
- Tax advisory – guidance and advice regarding tax obligations and liabilities, minimizing tax liabilities from cross-border activities, creating a tax planning strategy, etc.;
- Preparation of internal documentation – preparation of tailor made AML / CTF Policy with Annexes, Terms & Conditions, Privacy Policy, Cyber Security Policy, etc.;
- Assistance in hiring employees – guidance and support to employers who are looking to hire new staff. Such service includes potential employees background / knowledge check, interviewing, establishment of employment policies and procedures, etc.;
- Assistance in creating partnerships – support and advisory in various potential partnerships and collaborations with other entities in terms of additional services (e. g., IT, KYC, banking service providers) or additional financing (e. g., organizing meetings with VC, agnel investors, preparation of pitch deck, etc.);
- Legal support in other crypto related projects – assistance in token offering legal support (ICO/STO/IEO), private placement rounds, preparation of legal opinions, analysis of business models, etc.
For more please see our Services page.
Summary of Crypto license in Switzerland
| Licensing timeline |
2-3 months |
| State fee for application |
approx. 2 000 CHF |
| Required share capital |
20 000 CHF (LLC); 100 000 CHF (LTD) |
| Corporate income tax |
11.9% to 21%; |
| Annual supervision fee |
approx. 3 500 CHF |
| Local staff member |
AML Officer, Director |
| Physical office |
Yes |
| Accounting audit |
Yes |
| Bank account options |
Local Banks, EMIs |
