Choosing a permanent home for your company is a decision not to be taken lightly. This three-part series explores global hubs for Web3 companies, comparing regulations and tax incentives. Part I focuses on Switzerland and Bermuda, two pioneers in crypto-friendly regulation.
Switzerland
Switzerland attracts fintech and blockchain companies with its clear regulations, active support network, and solid funding sources. It offers entry to the wider European market without EU regulatory control. Switzerland’s Financial Market Supervisory Authority (FINMA) contributes to legal certainty by establishing clear guidelines for fintech licensing, crypto exchanges, and compliance with anti-money laundering and KYC requirements.
Regulation
FINMA regulates digital assets by applying existing financial market laws. Switzerland’s primary crypto regulation is the Federal Act on the Adaptation of Federal Law to Developments in Distributed Electronic Register Technology (DLT Act). Although the Act does not explicitly mention “blockchain,” it was designed to address legal issues arising in that context and introduces the concept of a ledger-based security—an uncertificated security that corresponds to a token. The issuer and buyer must enter a registration agreement stating that the rights in the ledger-based security can only be transferred or used through the electronic ledger. If the ledger complies with legal rules, the ledger-based security has the same legal standing as traditional registered security.
As for licensing, companies offering custody or trading services involving payment tokens may be required to obtain a banking license if they accept deposits from the public on a commercial basis or hold clients’ payment tokens in collective custody wallets. Switzerland’s fintech license eliminates the requirement to obtain a full banking license depending on the company’s activities and allows firms to conduct limited banking activities. Holders of this license must maintain minimum capital, comply with anti-money laundering obligations, and establish robust compliance and risk-management frameworks.
Taxation
Companies that hold or trade digital assets are subject to corporate income tax on the resulting profits, and tax rates vary by canton. Several cantons provide tax incentives for blockchain startups. Zug, the center of “Crypto Valley,” stands out with highly business-friendly tax policies, including competitive corporate tax rates and favorable treatment of digital asset transactions. Other cantons, such as Lucerne and Schwyz, also offer tax benefits to fintech and crypto companies, helping to lower their overall tax burden.
Bermuda
Bermuda offers a collaborative business environment with government and industry working together, supported by an independent regulator that balances innovation with international regulatory standards. It has clear crypto-friendly rules and enforces strict anti-money laundering and anti-terrorism financing measures.
Regulation
Bermuda pioneered digital asset regulation with the Digital Asset Business Act (DABA) in 2018, establishing one of the world’s first licensing regimes for digital asset businesses. The framework includes cybersecurity, consumer protection, and financial crime prevention measures, and is designed to evolve with the sector.
The Bermuda Monetary Authority (BMA) actively seeks industry engagement. It conducts annual consultations to assess industry developments, is developing a digital identity framework to streamline secure customer onboarding, and maintains memorandums of understanding with other jurisdictions, including Wyoming, to facilitate cross-border supervision. Bermuda has been examining ways to legally recognize and regulate DeFi. The BMA’s fintech team, together with the government’s DAO Working Group, has been developing proposals to incorporate digital governance frameworks—including DeFi protocols structured as DAOs—into Bermudian law and regulatory frameworks.
Taxation
Bermuda does not tax digital assets or transactions involving them. Exempted companies or limited liability companies engaged in digital asset activities, including issuers, can request an undertaking from the Minister of Finance confirming that any future taxes on profits, income, or capital gains would not apply to them. However, multinational enterprises with annual revenue of €750 million or more are subject to a 15% corporate income tax.
