1. ICOs in Switzerland – Opportunities and Challenges
André Guedel
Head Intl. HQs
KPMG Switzerland
Kyiv - Iforum April 25, 2018

2. Welcome to Switzerland

3. An alternative reality

4. Topics ICO Ecosystem in Switzerland
Regulatory/Legal and Tax Environment
Commercial Considerations

5. ICOs in Switzerland

6. Examples of TGEs in Switzerland

7. Crypto Valley – a Global Brand
Switzerland offers good conditions to launch an ICO
Cryptofriendly and international environment
ICO Industry
Flexible Labor Law
Attractive tax rates
Example:
Canton Zug accepts Bitcoin as payment for certain government fees
Possibility to incorporate a company with Crypto currencies (seen in Canton of Zug)

8. Regulatory / Legal considerations

9. FINMA directive for ICO as of Feb 16, 2018 (1/3)
Payment Tokens
A token / coin can be used to purchase services and goods (which are not only provided by the issuer).
No similarity to traditional financial instruments such as options, etc. E.g. Bitcoins and Ether
Regulatory considerations:
Payment tokens are not considered as a security.
However, AML regulations apply (KYC)
Either membership with SRO
Or directly supervised by FINMA

10. FINMA directive for ICO as of Feb 16, 2018 (2/3)
Utility Tokens
Token / coin can be used to access a specific service (platform).
Regulatory considerations:
Utility tokens are not considered as a security.
However, functionality of token at the time of issuance is required. Practice of the FINMA is not fully known yet.

11. FINMA directive for ICO as of Feb 16, 2018 (3/3)
Asset / Security Tokens
Token / coin provides for profit sharing or other forms of compensations
Regulatory considerations:
Asset tokens are considered as a security.
Issuance of asset tokens may need a prospectus.
Listing on the secondary market is not possible exchanger topic

12. Legal entity: AG, GmbH or Foundation
Further Requirements .
Legal entity: AG, GmbH or Foundation
Substance: Functions/Assets/Risk in Switzerland
AML/KYC: In certain cases SRO membership required
Exchangers: Require Membership at a SRO

13. Tax considerations

14. Overview Swiss Tax System
Profit tax /
capital tax
Income tax /
wealth tax
Federal/Cantonal/Communal Tax authorities
ETR: 12.4% %
ETR: 22.5% % (Reduced taxation on dividends from qualified participations)

15. Income Tax rates in Cantonal capital cities
Schaffhausen
16.0%
Basel
Thurgau 16.4%
Thurgau
22.2%
Aargau
Aargau
19.2%
Zurich 21.2% BL Z
Zurich 16.5%
Zürich 21.2% ü
rich AI
20.8%
14.2%
Jura
Jura
20.7% AR
13.0% SO
St. Gallen 17.4%
21.9%
Zug
St.
Lucerne
12.3%
14.6%
Zug
Lucerne 12.2%
Luzern
Gallen
Neuchatel
Schwyz
Schwyz 14.9%
Neuchâtel
Glarus
Glarus
17.0% NW
12.7%
15.7% OW
Bern 21.6%
12.7%
Uri
Uri
15.1%
Grison
Fribourg
Grisons
Vaud
19.9%
16.7%
22.8%
Ticino
Ticino
Geneva
20.7%
24.2%
Valais
Legend:
German speaking canton
French speaking canton
Bi-lingual canton (German/French)
Italian speaking canton
Tri-lingual canton (German/Italian/Rhaeto-Romanic)
21.6%

16. Topics to be considered
Launch of ICO
Post ICO Transactions
Incorporation
Tax treatment of funds generated by ICO, e.g.:
Prepayment of customers
Provision for development of platform
Place of effective management
Profit repatriation (DTT reg. WHT rates)
Transfer pricing considerations
VAT registration & compliance
Filing of tax return
No income tax
No capital tax
No stamp duty
Fees for incorporation
To be pre-discussed with tax authorities in the form of a tax ruling

17. Commerical considerations

18. Milestones & timeline ICO Info collection Bank account opening
Incorporation
Proper documentation (Whitepaper / T&C / Prospectus)
Post-ICO support
Tax ruling
Finalization of ICO documentation
No-Action Letter FINMA or Initiation of FINMA Licensing Procedure
3 - 5 months
KPMG Workshop
ICO
KPMG support «2nd Phase»

19. Looking forward
ICO
2.0
ICO 1.0

20. Thank you very much!

21. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received, or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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