Legal situation of P2P loans in Switzerland

Person who wrote the post admin Dec 27, 2019
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In the fourth episode of the SME series, we deal with the legal classification of P2P loans in Switzerland. The legal situation has already been simplified somewhat, but there are still a few things to consider. More on this in this blog. In the fourth episode of the SME series, we deal with the legal classification of P2P loans in Switzerland today. The legal situation has already been simplified somewhat, but there are still a few things to consider. More on this in this blog.

General regulations

Money Laundering law (AML)
Crowd4Cash as a lender is a financial intermediary in accordance with Art. 2 Money Laundering law (AML). Full subordination to the AML requires membership in a self-regulatory organization (SRO). Crowd4Cash is a member of PolyReg and also undergoes regular revisions.

Withholding Tax law (VStG)
Investment income from P2P loans are not subject to the regulation of Art. 4 VStG and are therefore exempt from withholding tax.

Banking law (BankG)
Natural and legal persons who are not subject to the Banking Act may not accept public deposits on a commercial basis. Although P2P loans are used for the commercial acceptance of funds, they are not considered deposits, provided they are processed within 60 days (Art 5 Para 3 BankG). This article is one of the most important basics of P2P platforms, as it enables them to operate without a banking license. This saves significant costs, which we can return to customers in low interest rates and fees, and which can still run the business profitably.

In particular: SME loans
No approval is required for the granting of SME loans in Switzerland. The loan contracts are based on the Swiss Code of Obligations and therefore enjoy a high degree of freedom of form From an operational point of view, the amount of CHF 1 million for P2P SME loans is undoubtedly, which would make it necessary for more than 20 investors to be subject to the banking law (Article 6 (2) BankG) Switzerland up to CHF 1 million without a permit.

Excursus consumer credit

Consumer Credit Act (KKG)
However, consumer loans are highly complex. The P2P loans have been fully subject to the KKG since May 1, 2019. This entails a high administrative and regulatory effort. Primarily, it is important to take many consumer protection measures into account. Crowd4Cash has been able to automate most of these requirements in their processes over the past three years. With consumer credit, there is a license requirement for commercial lending. This is also one of the many advantages of Crowd4Cash, as it can act as an intermediary lender as a platform and enable investment in this asset class, even for institutional investors.