Foundations in Switzerland and Cryptocurrencies: Legal Framework, Taxation and Practical Examples
Introduction
Switzerland has become one of the most dynamic ecosystems worldwide for blockchain and Web3 projects. Thanks to its legal stability, competitive tax framework and reputation as a global financial hub, many international initiatives choose to establish their foundation in Switzerland and Cryptocurrencies. Such entities are used to manage crypto treasuries, administer protocols, or distribute grants to a community. Alongside foundations, the Swiss blockchain association is also a preferred legal vehicle.
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Legal Structures Suitable for Crypto Projects in Switzerland
Association (Art. 60 et seq. Swiss Civil Code)
- Fast incorporation: only two people are required, with no minimum capital.
- Mandatory statutes: must specify the name, purpose, registered seat and governing bodies (general assembly, board).
- Commercial register entry: required if the association carries out a commercial activity in pursuit of its purpose or is subject to audit.
- Flexibility: allows management of digital assets, launching of a protocol, or the distribution of funds.
Foundation (Art. 80 et seq. Swiss Civil Code)
- Creation by notarial deed and registration in the commercial register.
- Initial endowment: in practice, authorities expect a minimum contribution of about CHF 50,000.
- Supervision: exercised by a cantonal or federal supervisory authority.
- Governing bodies: foundation council (at least three members) and an auditor.
- Key advantage: the dedication of assets is irrevocable, aligning perfectly with the decentralized ethos of blockchain projects.
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Swiss Regulation Applicable to Crypto Foundations
Token Classification by FINMA
- Payment tokens (cryptocurrencies like Bitcoin or stablecoins) → subject to Anti-Money Laundering Act (AMLA).
- Utility tokens → not deemed securities if usable from the moment of issuance.
- Asset/security tokens → treated as securities and therefore subject to the Financial Services Act (FinSA) prospectus requirements.
AML Obligations
A Swiss foundation that provides custody or exchange of cryptocurrencies for third parties qualifies as a financial intermediary and must affiliate with a FINMA-recognized self-regulatory organization (SRO).
VAT and Taxation
- Cryptocurrency exchange is exempt from Swiss VAT (treated like foreign currency exchange).
- Service activities (custody, advisory, brokerage) become taxable once annual turnover exceeds CHF 100,000.
- Public-interest foundations and associations may apply for tax exemption (Art. 56 lit. g Federal Direct Tax Act) if their statutes state a charitable purpose and include an appropriate liquidation clause.
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Advantages of the Swiss Model for Blockchain Projects
- International credibility: strong governance, mandatory audits, and oversight by public authorities.
- Regulatory certainty: Switzerland integrated registered ledger-based securities and DLT trading facilities as early as 2021.
- Structural flexibility: association for quick launches, foundation for long-term projects.
- Tax benefits: potential for tax exemption and a clear VAT regime for cryptocurrencies.
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Examples of Blockchain Foundations Established in Switzerland
- Tezos Foundation (Zug): holds a Bitcoin portfolio and funds the Tezos ecosystem.
- Solana Foundation (Zug): supports the decentralization and security of the Solana network.
- Origyn Foundation (Neuchâtel): develops a protocol to certify object authenticity via NFTs.
- DFINITY Foundation (Zurich): creator of the Internet Computer, collaborates with the city of Lugano.
- Cardano Foundation (Zug): academic partner of the University of Zurich.
These cases demonstrate Switzerland’s strength in attracting global blockchain and cryptocurrency leaders.
Conclusion
Switzerland stands out as a key hub for blockchain foundations and associations. Whether to structure a protocol, manage digital assets, or distribute grants, establishing a Swiss foundation provides a robust and credible legal solution. Nevertheless, project founders must carefully anticipate FINMA requirements, AML obligations, and tax considerations to secure their development.
Services of My Swiss Company SA – Swiss Fiduciary
My Swiss Company SA, a Swiss fiduciary firm specialized in cryptocurrencies and blockchain, supports clients with:
- Creation of blockchain foundations and associations in Geneva, Zug and Lucerne.
- Compliance with FINMA and AMLA requirements.
- Tax and accounting management for crypto projects.
- Applications for tax exemption for charitable purposes.
- Domiciliation and full administration of Swiss foundations.
With its unique expertise, My Swiss Company SA – Swiss Fiduciary is the ideal partner for Web3 entrepreneurs wishing to set up a crypto foundation in Switzerland and develop a blockchain project within a secure and internationally recognized framework.
