Although the city of Zug is formed of a population of approximately 30,000 inhabitants, it represents one of the most developed regions (at a global level) for establishing businesses in the field of cryptocurrency. Investors interested inopening a company in Switzerland in this field can set up their business operations in this city, as it offers one of the most attractive taxation systems.
One of the main reasons for which a wide number of cryptocurrency business have set their operations here is related to the tax regulations addressed to this type of operations. Our team of consultants in company formation in Switzerlandcan provide in-depth assistance on the regulations referring to the cryptocurrency sector.
Why choose Zug ?
Switzerland is a country with a very solid financial sector and numerous types of business activities are carried out here. Zug, in particular, is the top destination for financial activities in the field of cryptocurrencies, as numerous local entrepreneurs have invested in this sector. You can choose from several types of companies, when opening a company in Zug, from the limited liability company tothe Swiss SA.
The following video offers a short presentation on the main reasons to start a company in the Zug Crypto Valley:
Investors interested in the procedure of company formation in Switzerland are required to respect specific rules if they will operate a business performing transactions with digital currencies, such as the anti-money laundering law, which can be detailed by our team of specialists in Swiss company formation.
Besides the taxation regime applicable to companies operating in the region of Zug, foreign businessmen can also benefit from the local support established in this sense through the Crypto Valley Association, an independent entity which receives governmental assistance to further advance the development of cryptocurrency and fintech businesses.
The Crypto Valley Association can offer assistance to start-ups operating as cryptocurrency companies and the association also benefits from institutional support, including from the Swiss Financial Market Supervisory Authority (FINMA), the financial regulator of businesses registered in this field of activity. Our team of agents in company registration in Switzerlandcan provide in-depth assistance on the requirements for establishing a cryptocurrency business.
What types of cryptocurrencies are available in Switzerland?
Switzerland, together with its financial regulators, have a positive attitude towards investments carried out in cryptocurrencies. Currently, there is no statutory definition of what a cryptocurrency must be, but FINMA set out the specific characteristics cryptocurrencies must have in this country; this was established under a special report that was issued in 2014. According to FINMA, cryptocurrencies in Zug, Switzerland, can refer to the following:
•the virtual currency (or cryptocurrency) defines a type of currency that has a digital value, and which can be traded on the internet;
•Switzerland recognizes three main categories of cryptocurrencies, namely the payment tokens, utility tokens and asset tokens;
•the payment tokens in Switzerland define a category of currency that is used for the purpose of paying for goods or services;
•utility tokens refer to cryptocurrencies that can be used in the case of blockchain platforms;
•asset tokens are used as equity claims, which allow the issuer to have various future asset rights when investing in a given project.
What is the tax system applicable to Swiss cryptocurrency businesses?
Since the concept of cryptocurrency is new of the financial markets across the world, the countries where such activities can be developed have not yet created a complete legal framework and the law on this matter is constantly evolving. In Switzerland, numerous legal aspects have already been completed, since this country, including thecanton of Zug, is one of the main cryptocurrency centers at a global level.
In this sense, Switzerland provides a clear legal framework for the taxation of cryptocurrency operations and our team of specialists in Swiss company formation can provide an extensive presentation on the types of taxes to which cryptocurrency businesses are liable. One of the taxes available for a cryptocurrency operation is the wealth tax (which can vary based on the canton where the cryptocurrency business operates).
The reason for which the wealth tax is imposed to cryptocurrency operations is given by the fact that, under the Swiss tax law, cryptocurrencies are seen as assets. The tax assessment is done at the end of the financial year and in order for the tax to apply, the value of the cryptocurrencies is transformed into Swiss francs. The value of the conversion is established by the Federal Tax Administration.
Another tax that can be imposed to cryptocurrency operations is the income tax, which is only imposed on the capital gains obtained from cryptocurrency activities. These two types of taxes are imposed to natural persons who obtain taxable income from cryptocurrency related activities. In the case of companies involved in cryptocurrencies operations, other taxes will apply. Some of the basic taxes that generally apply to Swiss legal entities are the following: the value added tax (VAT), the corporate income tax and the capital tax.
When developing a business that develops cryptocurrencies operations, the company will be charged with the capital tax and the owner of the business must declare their cryptocurrencies at the cost of acquisition in order to determine the tax base (which is established by the same institution mentioned above, the Federal Tax Administration). It is important to know that cryptocurrencies are not charged with the VAT in Switzerland.
What are the statistics on the usage of cryptocurrencies?
The usage of cryptocurrency as an alternative investment tool increased in popularity in numerous countries. Besides Switzerland, cryptocurrencies are popular currencies in European countries such as the Netherlands, the United Kingdom, Germany, France or Spain. The United States of America is also a developed market for this industry. When referring to the consumers who use cryptocurrencies for a wide range of payments, the following are available:
•in Eastern Europe, 11% of the persons who use cryptocurrencies prefer to make payments with virtual currencies on a daily basis;
•daily payments in cryptocurrencies are concluded by 4% of the cryptocurrencies users in France;
• out of all the Swiss cryptocurrency consumers, 2% of them make daily payments with virtual coins (the same situation is also registered in other European countries such as Germany, Spain or the Netherlands);
•although the UK is one of the main global financial centers, only 1% of its cryptocurrency consumers make daily transactions in one of the available virtual currencies;
•at a global level, Bitcoin is one of the most popular cryptocurrency and currently, there are approximately 5000 (more exactly, 4,894) Bitcoin ATMs available for cryptocurrency users.
Taxation in Zug
As mentioned above, one of the most appealing reasons for starting the procedure of Swiss company formation in Zug refers to thetaxationsystem, which is one of the lowest applicable at a cantonal level.Companies operating here are imposed with one of the lowest corporate taxes applicable in Switzerland, of only 14%.
Paul Gheorghiu is one of our experienced company formation agents. He will help you register your company in Switzerland as fast as possible.
Call us now at +41 41 266 0070 to set up an appointment with our experts in Zug, Switzerland. As a Sig Fiduciaire client, you will beneficiate from the expertise of our local consultants for opening a company in Switzerland.
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