The Swiss government is encouraging blockchain startups to set up shop with new laws that lower legal barriers to such businesses while leaving favorable tax laws untouched.
The National Council, Switzerland’s equivalent of the U.S. House of Representatives, unanimously passed a legislative package changing about a dozen financial laws on June 17. The changes, proposed by the Swiss Federal Council, are intended to remove legal barriers to applications of blockchain and distributed ledger technology.
On June 19, the Federal Council acknowledged a report prepared by the Federal Department of Finance that concluded there was no need to make special amendments to existing tax laws with regard to blockchain. The report was commissioned by the Federal Council in 2018 when the government decided to examine existing tax laws and assess any need for amendments.
Switzerland has long been a blockchain startup magnet. The city of Zug, in particular, was a popular location for token-funded projects during the initial coin offering (ICO) boom of 2017, earning it the nickname Crypto Valley.
While ICOs have faded, Switzerland’s enthusiasm for blockchain technology has not.
“It’s known that Switzerland is very much trying to encourage blockchain business. It’s a political objective,” said Rolf H. Weber, professor of financial market law and chair of the working group for regulatory issues at the Swiss Blockchain Federation.
The changes were largely based on a Federal Council proposal filed last year, and will now be passed on to the upper chamber, the Council of States, for a final vote this fall.
Through communications specialist Joel Weibel, the Swiss Federal Tax Administration said that Swiss laws must guarantee legal certainty and the openness of authorities to new technologies.
The new laws
As it exists now, Swiss law is cumbersome, particularly when applied to the transfer of security tokens, Weber said. All transfers must be done in writing, like the…