Staff, employment and token plans

Employing across the two hubs

Swiss employment law is codified in the Code of Obligations and supplemented by the Labour Act. Singapore's is in the Employment Act 1968 with a common-law overlay. Both are employer-friendly by European standards. The structuring point is that the employer of record must be the entity where the work is done, because permits and social security follow the employer. A Swiss GmbH cannot employ a Singapore-resident developer without a Singapore presence. An employee who works in Singapore for a Swiss employer with no Singapore entity creates a permanent establishment of the Swiss company and a payroll-tax default.¹ The options are a local entity, an employer-of-record provider or a contractor arrangement, with the last carrying the usual misclassification risk in both countries.

Social security differs sharply. Swiss employers and employees each pay about 5.3 per cent of salary into the first-pillar scheme (AHV/IV/EO) without cap, plus unemployment insurance and a mandatory second-pillar pension contribution that rises with age.² Singapore's Central Provident Fund applies only to citizens and permanent residents, so the employer of a foreigner on an Employment Pass pays no social security at all, a saving of roughly ten to twenty per cent of payroll against Switzerland.³ There is no Switzerland–Singapore social security agreement, so a Swiss national seconded to Singapore leaves the Swiss system unless they continue voluntary AHV contributions.

Token plans

Employee and contributor token plans are the most valuable component of compensation in most protocol groups and the most difficult to administer across two hubs. Switzerland taxes employee participation instruments under Art. 17a ff. DFTA and FTA Circular No. 37, which the Federal Tax Administration has applied to tokens by analogy. Tokens that are freely disposable at grant are taxed at grant, tokens subject to vesting are taxed at vesting and a discount for blocking periods applies.⁴ Singapore taxes tokens received as employment income at market value when the employee acquires the right to them, with deferral under the Qualified Employee Equity-Based Remuneration scheme available for shares but not clearly for tokens.⁵ A group with a single token plan therefore has two tax events, two valuation dates and two withholding regimes. The plan rules must allow the administrator to sell or withhold tokens to fund the employee's tax in each country.

Checklist

A token plan for a Swiss–Singapore group should settle, before the first grant: - the granting entity (the foundation, through a contributor agreement, or the employing company) - the vesting schedule and whether vesting is time-based, milestone-based or both - the valuation source and time of day for each taxable event in each country - the withholding mechanism (sell-to-cover or net settlement) and who executes it - the treatment on termination, death and incapacity - the lock-up and the trading-window policy, aligned with the market-abuse rules of Chapter V - the ruling strategy with the Zug tax administration and, if the plan is large, with IRAS

Notes

Switzerland–Singapore double taxation agreement, SR 0.672.968.91, Art. 5 (permanent establishment) and Art. 15 (income from employment); Income Tax Act 1947, s. 45 ff. (withholding) and Employment Act 1968 (2020 Rev. Ed.). ↩
Federal Act on Old-Age and Survivors' Insurance of 20 December 1946 (AHVG), SR 831.10, Art. 5 and Art. 13 (contribution rates of 4.35 per cent each for employer and employee for AHV; combined first-pillar rate of 5.3 per cent each with IV and EO); Federal Act on Occupational Pensions (BVG), SR 831.40, Art. 7 and Art. 16. ↩
Central Provident Fund Act 1953 (2020 Rev. Ed.), s. 7 and First Schedule (contributions payable in respect of employees who are citizens or permanent residents); employer contribution rate of 17 per cent and employee rate of 20 per cent for employees up to age 55, subject to the ordinary wage ceiling. ↩
DFTA, SR 642.11, Arts 17a to 17d; Ordinance on Employee Participation of 27 June 2012 (MBV), SR 642.115.325.1; FTA Circular No. 37 of 30 October 2020 (replacing the version of 22 July 2013), "Besteuerung von Mitarbeiterbeteiligungen", section 3 (application to tokens by analogy per FTA working paper on cryptocurrencies). Part G, Chapter IV. ↩
Income Tax Act 1947, s. 10(6) (gains from employee share options and share awards); IRAS e-Tax Guide, "Income Tax Treatment of Digital Tokens", section 7; IRAS, "Tax Treatment of Employee Stock Options and Other Forms of Employee Share Ownership Plans" (QEEBR). Part M, Chapter VI. ↩

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 October 2026.

English

Contact

Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

Get in touch →

Articles and Insights

Setting up or expanding in Singapore?

SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

If you are planning a company incorporation, an investment, a holding structure or a market entry through Singapore, you can reach Dr Ressos directly at [email protected]. Singapore law advice is provided by KGP Legal LLC, a licensed firm of Singapore advocates and solicitors. As a Singapore law practice, KGP Legal LLC is authorised under the Legal Profession Act 1966 to advise on Singapore law and to represent clients before the Singapore courts; foreign law practices with an office in Singapore are, as a rule, not permitted to do either. Dr Ressos and his team facilitate the full range of Singapore legal, compliance and company administration services, including company incorporation, corporate transactions, commercial contracts, crypto and digital assets, financial regulatory work and dispute resolution, including litigation in the Singapore courts. For legal, tax and fiduciary services in Switzerland, see helveticaregister.com.