Founding a Company Using Crypto and Foreign Currencies
To found a Swiss company limited by shares (Aktiengesellschaft), at least 20% of the required capital (which cannot be less than CHF 100,000) must be paid in, with CHF 50,000 being the minimum amount. The capital contribution must normally be made in cash, but a contribution in kind is also an option. Cash contributions must be deposited with a bank and can only be released by the bank once the company has been entered in the commercial register.
Capital contributions in a cryptocurrency
In September 2017, the first company in Switzerland whose capital was paid in bitcoin (BTC) was founded in the canton of Zug.
As cryptocurrencies are not a legally recognized means of payment, the capital contribution is not made in cash, but as a contribution in kind. For an asset to serve as a contribution in kind, it must be possible to capitalize it, and it must also be freely transferable, freely available, and realizable.
Other cryptocurrencies besides e.g. Bitcoin (BTC) and Ether (ETH) may also meet these criteria. In individual cases, it must be clarified with the competent commercial register office which cryptocurrencies are suitable to make the capital contributions in.
Compared with a cash contribution, the law imposes stricter requirements on a contribution in kind. In addition to a contribution in-kind agreement, the founders must prepare a report with information on the method used to value the contributed cryptocurrency. A licensed auditor must certify the incorporation report, which is an additional cost. And it is also necessary to state in the articles of association the subject, valuation, contributor's name and shares issued for the contribution in kind.
The contribution in kind must cover the capital in Swiss francs at the time of the public notarization and entry in the commercial register. The risk of short-term price fluctuations in the selected cryptocurrency must be considered.
Share capital in a foreign currency
Under the revised corporate law, a company's share capital can be denominated in a foreign currency, where before it could only be in Swiss francs. But the selected currency must be material to the company's operations. The capital in a foreign currency must correspond to a value equivalent to at least CHF 100,000 when the company was founded.
If a foreign currency is chosen for the share capital, the bookkeeping and accounting must be performed in the same currency. In addition, all capital-related aspects – e.g. the creation of reserves, distribution of dividends and assessment of a pending insolvency – must be based on the selected foreign currency.
The new law is not expected to come into force before 2023. Until then, the Federal Council will still have to determine which foreign currencies share capital can be denominated in.