What you need to know about “the crypto nation.”
Cryptocurrency has made a big splash with investors and fintech lovers, whether they are trading, mining, investing in an ICO, or even creating their own startups. While many see cryptocurrency as a great new investment and centralized currency, others are not as thrilled. Many nations are making it difficult for those interested in doing business with cryptocurrency by creating high taxes or outlawing some crypto activities altogether.
Cryptocurrency is digital money that uses cryptography for security. Cryptography is writing and solving puzzles. With the cryptography step, it is difficult to counterfeit. The currency does not have a central authority and can be used for a variety of things such as buying goods and investing.
Switzerland is a prosperous nation that has a per capita GDP that is higher than most Western European nations. The economy is so strong that there is no national deficit. The Swiss income exceeds its expenses, so a self-reliant economy fully backs the currency. The country also boasts low unemployment, high per capita income, and a popular banking destination utilized worldwide.
With the combination of the exciting prospect of cryptocurrency as an investment and the strong economy of Switzerland, the only thing that could make this whole thing better is knowing that Switzerland is one of the most crypto friendly nations in the world. Not only does the Swiss economy welcome cryptocurrency, but it is also encouraging it!
Below, we have gathered some of the reasons why Switzerland should be your cryptocurrency destination. Combined with some of the safest and most favorable banking destinations, Switzerland’s encouraging attitude towards digital currencies will ease your worries of not being able to harness the power of the emerging economic trend.
Rules and Regulations
The nation’s economic authorities have accepted cryptocurrency with open arms and are even encouraging ICOs, unlike many other economic centers.
Initial Coin Offering, or ICO, is like an IPO for cryptocurrency. When a new digital currency is developed, money is needed to fund it. Those who invest are hoping the currency will gain much traction and raise the price of the coin.
Switzerland has always had a progressive viewpoint on individual banking and privacy, and this holds true with cryptocurrency regulation – with an open attitude towards digital money. Economics Minister, Johann Schneider-Ammann, stated in January of 2018 that he would like to see Switzerland as “the crypto-nation.”
While many nations like China and South Korea have banned initial coin offerings, Swiss officials want to see the ICO market prosper while also keeping up the standards and integrity of the financial markets. The financial authority, Finma, believes there are economic opportunities in the digital currency startups. There is an ICO working group that is working to increase the legal certainty, protect existing financial centers, and ensure tech-neutral regulation.
The country is also home to the “Crypto Valley” project, one of the world’s leading ecosystems for crypto, ledger technologies, and blockchain. Many successful ICOs have come from Switzerland. Emerging digital pioneers have created this crypto hub near Zurich, in Zug, formed by wealthy investors and technology specialists, and it has been more than successful. Roughly five to ten times a day the Crypto Valley industry association will receive inquiries from global startups asking about Swiss ICO.
This longtime global financial center, known for wealth management and a strong currency, is also considered an “unofficial” cryptocurrency low-cost jurisdiction. Cryptocurrencies aren’t viewed as foreign currency or a financial supply for GST, so there are tax benefits that come with crypto.
For the purposes of capital gains tax, cryptocurrency is classified as an asset, and this only applies to an individual who is considered a professional trader. Professional traders must report the coins as income from self-employment.
Holders and investors of digital currencies are subject to a wealth tax. Tax authorities decide the rate of this tax at the end of the fiscal year. Holders must declare the coins in their annual tax return with their other assets.
Equity tokens from an ICO can be subject to a capital duty of 1 percent but just once. The distribution of profits from equity tokens or payments on debt tokens will be subject to Swiss withholding tax at 35 percent.
It is highly recommended that crypto traders and holders rely on the assistance of a tax professional. Tax laws and regulations surrounding cryptocurrency are relatively new. It’s better to be well prepared than find out you are not compliant.
There is so much buzz around crypto and so much to learn. For more information about cryptocurrency, read our introduction to cryptocurrency page. We also have a cryptocurrency vocabulary list where you can learn all of the words associated with cryptocurrency. Once you get involved with digital money, you will also need to know how to stay tax compliant. For this, we have gathered some tax laws around the world regarding cryptocurrency.
Alpen Partners Wealth Management International AG, the sister company of Alpen Partners Wealth Management AG, is now a registered investment advisor at the U.S. Securities and Exchange Commission (SEC). Together with our partner Swiss private banks, our company can now offer the full Swiss private banking experience to American clients, both resident, and non-resident.
Building on many years of experience in private banking in Switzerland, Alpen Partners Wealth Management International AG provides investment advisory services to U.S. clients. Swiss banking is highly regarded around the world, well known for being sophisticated and discreet. In 2018, it was reported that $7.5 trillion in assets are held in Swiss banks and almost 51% of that is generated from clients outside of the country. Choosing Switzerland as a banking destination is choosing years and years of financial stability and growth.
The advantages of having an account in Switzerland include currency and investment diversification, asset protection, and the possibility to deposit assets in some of the oldest and best-capitalized banks in the world.