Zug and the Crypto Valley: companies, foundations and the ecosystem

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In 2014 the Ethereum Foundation was established in Zug, and within a few years the small canton had become the best-known location for blockchain companies in Europe. Today about 715 companies working with crypto assets, blockchain and digital assets are based there. The reasons are practical: a moderate tax burden, authorities that understand the subject, a network of specialised lawyers, auditors and banks, and a legal framework that has given the industry legal certainty since 2021.

How the Crypto Valley developed

The Ethereum Foundation (Stiftung Ethereum) chose Zug in 2014 to support the development of the Ethereum protocol, and many protocol projects followed its example. In 2016 the town of Zug began to accept Bitcoin for small municipal fees, and since 2021 the canton has accepted tax payments in Bitcoin and Ether. Around these early projects an ecosystem grew that now includes exchanges, custodians, asset managers, tokenisation platforms, software developers and the advisers who serve them. Zurich, with its banks and the Swiss stock exchange, is about half an hour away.

Foundations for protocol projects

Many protocol projects use a Swiss foundation under Articles 80 et seq. of the Civil Code. A foundation has no owners or shareholders; its assets are dedicated to a purpose defined in the deed of foundation, such as the development and promotion of an open-source protocol. This suits projects that want to show that the network is not controlled by a company pursuing profits for its shareholders.

A foundation with an international purpose is supervised by the Federal Supervisory Authority for Foundations, which reviews each year whether the foundation's assets are used in accordance with its purpose. The foundation board must organise the foundation accordingly, keep proper accounts and have them audited. A foundation can own operating companies and hold intellectual property, but it cannot distribute profits to its founders.

Companies for operating businesses

Operating businesses, such as exchanges, custodians, software developers and service providers, are usually set up as a company limited by shares (AG) or a limited liability company (GmbH). The shares of an AG can be issued as ledger-based securities under the DLT Act, as explained in the article on the DLT Act. The share capital of an AG or GmbH can be paid in crypto assets as a contribution in kind, subject to the rules on valuation and the auditor's confirmation. Whether a business needs a financial market licence depends on its activity and is explained in the article on licences for crypto businesses.

Tax

The effective profit tax in the town of Zug is 11.71 per cent in 2026, among the lowest in Switzerland. The cantonal tax administration is experienced with crypto businesses and tokens, and advance tax rulings on token issues, staking or the valuation of crypto assets can be obtained quickly. The general rules are explained in the article on the taxation of crypto assets.

What to consider when setting up in Zug

Describe the business model precisely before choosing the legal form, so that the regulatory position is clear from the start.
Plan the bank relationship early: banks will ask for the regulatory analysis, the source of the crypto assets and the ownership of the company, as explained in the article on bankability.
Ensure that at least one person authorised to represent the company lives in Switzerland (Article 718 paragraph 4 of the Code of Obligations for the AG, Article 814 paragraph 3 for the GmbH).
Build real substance: premises, staff and board meetings in Zug support tax residence and treaty access.
Consider the limits of a small canton: offices and housing are scarce, so larger teams often combine Zug with Zurich.

How Ressos Legal helps

I advise blockchain projects and crypto businesses on setting up in Zug: the choice between foundation and company, formation and articles, the regulatory analysis, tax rulings and the bank relationship. Contact me for a first conversation.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2026.

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Dr Alexander Ressos, TEP

Rechtsanwalt/Attorney-at-Law

I am a Swiss attorney-at-law and also admitted as a solicitor in Hong Kong and in England & Wales, with almost 25 years of experience.

Together with my multilingual team, including Chinese, Japanese, Korean, Russian, Ukrainian and French native speakers, I advise companies and their owners from around the world on the full range of banking, corporate, commercial and tax law matters in Switzerland, including international tax planning, fiduciary services, and legal family office services including immigration & relocation or real estate investments. My practice has a particular focus on clients from growth and frontier markets in Greater China, Central Asia and the Caucasus, the rest of Asia, the Middle East, Africa and Latin America, and I equally advise clients from Europe and North America. Through an affiliated Swiss trust company, we also take care of the incorporation and ongoing administration of their companies and other structures, including accounting, tax returns and corporate secretarial services, and I serve as a professional director where required. With the support of a network of first-class cooperation partners, I also implement solutions worldwide.

My approach is to act as a trusted advisor who works directly with decision-makers, on an equal footing: I start from what you want to achieve and shape every structure, contract and tax decision around your commercial goals and how it improves your after-tax return. As “lawyers who make it happen”, my team and I stay involved until your company is set up, your structure is in place and your transaction has closed, and we remain available for any follow-on work that may be required. You benefit from bespoke solutions and personal attention, and sound, friendly and practical advice. We are not the lowest-cost provider in the market, nor do we intend to be; our aim is to deliver well-founded, proper solutions and excellent value for money.

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