The Swiss Weeks 2024 Festival that was held in Singapore from 27 April 2024 to 8 June 2024 aimed to deepen and broaden the ties between Singapore and Switzerland, fostering mutual understanding and innovative collaboration across diverse domains. It is in the same spirt of collaboration that KGP Legal in Singapore and OA Legal in Geneva, Switzerland, entered into a business collaboration in June 2024. As part of our joint desire to foster strategic business relations and harness the synergy between Singapore and Switzerland, we are pleased to release our first jointly written article titled “A Comparison of FinTech Regulations in Singapore and Switzerland”. The aim of this article is to provide value to global FinTech companies in their consideration of setting up operations in Singapore and/or Switzerland.
Email: kenneth@kgplegal.com.sg
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As one of Southeast Asia’s FinTech leaders, Singapore is home to a flourishing FinTech industry which has risen on the back of swift adoption of digital financial solutions, growing populations of young and digitally savvy individuals, and increased funding activity. According to a press release by KPMG dated 14 July 2022, Singapore’s global market share in FinTech has doubled from 3.1% in 2021 to 6.4% in 2022. A later KPMG article further revealed that Singapore’s FinTech sector generated a total funding of US$2.20 billion, inclusive of mergers & acquisitions (M&A), private equity (PE), and venture capital (VC) deals in 2023, despite a recent downturn in global FinTech funding, which has also impacted Singapore.
With its competitive economy and reputation as a dynamic global financial hub, Singapore hosts over 1,000 operating FinTech firms, which remains the highest among Southeast Asian countries, representing 67% of the total across the region. These active FinTech businesses consist of digital payments, digital asset exchanges, insurance, data management, blockchain technology, fraud prevention and transaction security, digital currency, dynamic currency conversion and more.
Due to the COVID-19 pandemic, digital payment solutions were fast-tracked to become a common medium of payment in Singapore, as many Singaporeans looked towards e-commerce and online retailers to purchase items they needed. This is reflected by notable FinTech innovation trends in the past year, such as digital lending (buy-now-pay-later, peer-to-peer financing, etc.), as COVID-19 drove more consumers and businesses online to meet their commerce needs.
Further to this, according to an article by KPMG, funding in artificial intelligence technologies has seen an extraordinary increase, skyrocketing to US$333.13 million in the second half of 2023 —a significant jump from the US$148.08 million recorded in the first half of 2023.
Interestingly, according to the Business Times, there is an observable trend of Swiss companies using Singapore as a base to access the markets of the wider region. Examples of Swiss players that are now part of Singapore’s FinTech ecosystem range from regtech Apiax, to digital asset bank Sygnum Bank, to early-stage investor Tenity, which incubates and accelerates FinTech and insurtech startups in Asia out of its Singapore hub.
Switzerland is a global leader in FinTech, where there are around 382 FinTech companies, 172 of which are start-ups. This is unsurprising, given the support provided by Swiss authorities to FinTech businesses and the liberal approach to regulatory policy that is adopted. Notably there have been trade associations being set up to support FinTech start-ups, such as the Swiss Finance Start-ups and the Swiss Blockchain Federation.
FinTech businesses in Switzerland are broadly diversified, and are active in blockchain, digital assets, payments, investment and asset management services, wealth management and robo-advisors, regtech, exchange services, crowdfunding (including equity crowdfunding and crowdlending, in particular in the real estate industry), insurtech as well as in various platform services, such as for the purposes of fundraising and/or promotion of financial instruments.
The COVID-19 pandemic significantly boosted the demand for FinTech services, driven by the surge in digital banking usage and a notable increase in campaigns and volume in the crowdsupporting and crowdfunding sectors. As societies become more technologised, it is expected that digital channels will continue to gain importance across various areas of retail financial services, including consumer lending, payments, wealth management, real estate and pension plan solutions.
Singapore has a strong public and private sector funding that fuels the FinTech ecosystem. To help startups grow during the initial stages of business, the government has introduced the Startup SG scheme, which offers various types of grants to businesses in Singapore. Examples of such grants include the Startup SG Founder grant which provides new entrepreneurs with a Startup capital grant; the Startup SG Equity grant which allows the government to co-invest with qualified third-party investors into eligible startups; and the Startup SG Tech grant which provides funding for the commercialisation of innovative technologies. Alongside this, the investment arm of the Singapore Economic Development Board also introduced a Growth Initial Public Offer (IPO) Fund of $500 million to help groom growth-stage companies towards IPOs in Singapore. Apart from financial support from the government, funding has also been strongly backed by many venture capitalists, angel investors and private equity funds. Overall, Singapore-based FinTech firms continued to attract the most deals in ASEAN, securing more than half of the total 163 deals, amounting to US$1.8 billion in funding and representing 43% of total funding in ASEAN.
MAS has also put in place the Financial Sector Technology and Innovation (FSTI) scheme until March 2026, which provides funding support for experimentation, development and dissemination of nascent innovative technologies in the financial services sector, pledging $150 million over the next three years.
MAS also develops other incentive schemes such as accelerator programmes that provide tech startups with government co-investment, mentorship support and startup capital grants. Examples include the Startup SG Accelerator and Enterprise Development Grant operated by Enterprise Singapore. MAS also organises the annual Singapore FinTech Festival which acts as a major avenue for FinTech collaborations.
Small/medium-sized enterprises (SMEs) are also entitled to assistance schemes of their own. These include SkillsFuture Enterprise Credit (SFEC), Productivity Solutions Grant (PSG), Market Readiness Assistance (MRA), and Enterprise Development Grant (EDG), just to name a few.
Switzerland boasts a thriving start-up scene that actively supports FinTech ventures through various funding opportunities, as well as knowledge and office space provisions offered by both cantonal and national authorities. For early-stage funding, there are numerous seed and venture capital firms, while mature debt and equity capital markets cater to companies at later stages. Additionally, many private financial institutions are interested in acquiring equity stakes in FinTech companies or pursuing full integration, stemming from their aims to secure new distribution channels.
For instance, Innosuisse, the Swiss Innovation Promotion Agency has programmes that support science-based innovations.
FONGIT (Fondation Genevoise pour l’Innovation Technologique) is a Geneva based foundation supporting entrepreneurs with the expertise, resources and financing they need in transforming innovative ideas into sustainable companies, including in FinTech area.
Switzerland also hosts several incubator and accelerator programs for both Swiss-based and international FinTech companies. These include FinTech-specific programs like the F10 Association and Thomson Reuters Labs – The Incubator, as well as broader digital innovation programs like Kickstart Accelerator and blockchain-focused initiatives such as CV Labs Blockchain Incubator. Additionally, organised challenges like the Swiss Innovation Challenge aim to support FinTech companies by offering prizes and valuable exposure.
Further, Switzerland continues to experience commendable growth in the area of crowdfunding, which comprise of crowdsupporting, crowdsale and crowdlending, whether based on funds raised or number of platforms. This growth is largely attributed to the relaxation of regulations by Swiss authorities. For instance, the Swiss Banking Ordinance was revised to allow companies to accept funds for settlement purposes for up to 60 days without requiring a banking license. This change is particularly beneficial for crowdfunding platforms, which typically collect money from supporters in a separate account before transferring the funds to the borrower or project initiator. Several Swiss real estate platforms operate in Switzerland, mainly in direct real estate (co-ownership), crowdlending (standardised loans in the form of bonds issuances, which does not require any license as such when acting only on the primary market) and equity crowdfunding.
The provision of FinTech products and services is mainly regulated by the Monetary Authority of Singapore (MAS). In Singapore, there is no single, all-inclusive legislation regulating FinTech businesses. The applicable regulatory framework depends on whether the nature of the FinTech products or services falls within the scope of regulated financial activities.
The following legislations may be relevant:
FinTech businesses should consider issues such as:
It is worthy to note that many FinTech businesses can be structured as platforms or intermediaries that merely connect buyers and sellers, without engaging in regulated activities.
The Swiss Financial Markets Supervisory Authority (FINMA) regulates financial markets in Switzerland, including in the area of FinTech, where FINMA has designated a team to act as a FinTech desk. Switzerland has chosen to pursue a principle-based and technology-neutral approach in regulating financial markets. In Switzerland, there is no single, all-inclusive legislation regulating FinTech businesses. Instead, the regulatory framework for FinTech is integrated within the broader financial services regulations and Swiss code of obligations. The specific regulatory provisions that apply to a FinTech business depend on whether its products or services fall within the scope of regulated financial activities and Swiss regulation provides for specific rules applicable to DLT platforms (which allow to exchange securities tokens on the secondary market).
The following legislation may be relevant:
In addition, provisions of the Federal Act on Data Protection (FADP), the Consumer Credit Act (CCA), the National Bank Act (NBA) or the Federal Act against Unfair Competition (UCA) may be applicable.
Regulatory requirements may encompass licensing or registration mandates, as well as ongoing compliance and reporting obligations. These obligations typically pertain to organisational structure, capital adequacy, liquidity, documentation, and general fit-and-proper standards for key individuals, shareholders, and the business itself.
Singapore adopts the FinTech Regulatory Sandbox regime, where more relaxed legal and regulatory requirements, as specified by MAS at the point of application, are prescribed for the duration of the sandbox. Nevertheless, FinTech businesses that wish to be placed under the regime must apply with MAS and is subject to MAS’ evaluation criteria.
Other than the Sandbox regime, which only applies to new FinTech businesses that are exploring potential areas of innovation, FinTech businesses are generally subject to payment service licensing requirements grated by MAS under the PSA. A payment service license could take the form of:
Generally, a person conducting regulated activity (or activities) under the PSA requires an SPI unless the total value of all payment transactions that are accepted, processed or executed by the licensee in one month exceeds:
In the case of an e-money issuance service, an MPI is required where the average, over a calendar year, of the total value in one day of all e‑money that is stored in any payment account issued by the licensee exceeds $5 million.
The PSA prescribes certain regulatory conditions that licensees are required to comply with such as, but not limited to:
FinTech companies that accept public deposits of up to CHF 1 million, known as Swiss FinTech Sandboxes, do not require any form of registration, authorisation or licence. However, the deposits may not be invested or renumerated, and the company operating as a Swiss FinTech Sandbox must inform the depositors that it is not supervised by FINMA, and the deposit is not covered by the deposit guarantee. Swiss FinTech Sandboxes are not subject to supervision or regulatory requirements by the FINMA.
If a FinTech company’s public deposits are in excess of CHF 1 million, but not more than CHF 100 million, the entity may apply for a FinTech license, which is known as a “banking license light”, given that the criteria for obtaining the FinTech licence is more relaxed than that to obtain a banking license (minimum share capital of CHF 300’000.- and 3% of the deposit). Here, the deposits must also not be invested or renumerated. Those with a FinTech license are subject to supervision by FINMA.
Lastly, if a FinTech company’s public deposits exceeds CHF 100 million, it will be required to apply for a full banking license. The applicant will have to meet all licensing requirements beyond doubt, which cover areas such as minimum capital, capital adequacy and liquidity, governance, risk management, compliance, depositor protection as well as accounting and auditing. Those with a banking license are also subject to FINMA’s supervision.
The Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations administered by MAS follow the policies and guidelines proposed by the international task force, the Financial Action Task Force (FATF). Alongside that, The Terrorist (Suppression of Financing) Act and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act are the other two pieces of legislation that are now in effect. They are applicable to all FinTech businesses in Singapore.
Many notices have been issued by the MAS pertaining to AML/CFT. These notices are addressed to different sectors. The Payment Services (Amendment) Act helps put into place improved FATF standards to address the AML/CTF threats posed by companies that offer services for virtual assets. Certain types of cross-border money transfer services will be subject to AML/CFT legislation, and the MAS will have new authority to impose restrictions on DPT service providers.
In Switzerland, AML/CFT regulations are primarily governed by the AMLA and AMLO, as well as ordinances and circulars of FINMA and the rulebooks of recognised self-regulatory organisations. Broadly, AML/CFT apply to financial intermediaries. Not all FinTech companies fall under this AML/CFT regime. For instance, some crowdfunding platforms do not fall under this AML regime and are not regulated at all (for instance if the amounts are invested directly from the account of the investor on the account of the relevant entity seeking financing). Such companies must join a recognised Swiss AML self-regulatory organisation (SRO), where they are required to comply with AML due diligence requirements, transaction monitoring (in particular high-risk transactions), and reporting obligations. FINMA oversees compliance and takes enforcement actions against non-compliant entities in particular then the entities do not take AML appropriate remediation measures.
The Swiss Criminal Code also provides for certain aspects of corruption and money laundering, which apply to all natural persons and legal entities even if they are not financial intermediaries or FinTech companies.
The Swiss Confederation has also proposed a Federal Act on the Transparency of Legal Entities, which introduce a transparency register on the beneficial owners of legal entities. This Transparency Act is currently being discussed among professionals (in the context of the Swiss preliminary process before adopting any new set of law).
Cryptocurrencies are not specifically regulated but some legislation may apply to certain cryptocurrencies depending on their characteristics, in particular:
Under the PSA
A cryptocurrency may fall within the definition of ‘e-money’ or a ‘digital payment token’ and as such a person who carries on the business of providing a payment service in relation to such a cryptocurrency would need to obtain a license under the PSA.
‘E-money’ is defined as ‘any electronically stored monetary value that is denominated in any currency, or pegged by its issuer to any currency, has been paid for in advance to enable the making of payment transactions through the use of a payment account, is accepted by a person other than its issuer and represents a claim on its issuer, but does not include any deposit accepted in Singapore, from any person in Singapore’.
Subject to exceptions under the PSA, if a person issues e-money for the purpose of allowing another person to make payment transactions, the former would be carrying on an e-money issuance service.
Among others, the services of dealing in digital payment tokens (‘DPTs’), facilitating the exchange of DPTs, accepting DPTs from one DPT account for the purposes of transmitting to another DPT account, inducing any person to enter into any agreement for the buying or selling of any DPT in exchange for any money or other DPT, and safeguarding a DPT while having control over the DPT are regulated under the PSA.
A ‘digital payment token’ is defined as ‘any digital representation of value (other than an excluded digital representation of value) that is expressed as a unit, is not denominated in any currency, and is not pegged by its issuer to any currency, is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, as payment for goods or services or for the discharge of a debt, can be transferred, stored or traded electronically, and satisfies such other characteristics as MAS may prescribe’.
‘Dealing in digital payment tokens’ refers to the buying or selling of that DPT in exchange for any money or any other DPT other than facilitating the exchange of DPTs and accepting or using any DPT as a means of payment for the provision of goods or services, while ‘facilitating the exchange of digital payment tokens’ means ‘establishing or operating a digital payment token exchange, in a case where the person that establishes or operates that digital payment token exchange, for the purposes of an offer or invitation to buy or sell any digital payment token in exchange for any money or any digital payment token, comes into possession of any money or any digital payment token, whether at the time that offer or invitation is made or otherwise’.
Under the SFA
Under the SFA, certain cryptocurrencies may, depending on their features, potentially be classified as capital markets products, such as securities, units in collective investment schemes, derivatives contracts, and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading.
Requirements that are applicable to capital markets products may therefore apply to cryptocurrencies if they are capital markets products. For example, for cryptocurrencies that constitute capital markets products, a person who, offers such cryptocurrencies for sale would need to hold a capital markets services licence for dealing in capital markets products.
Under the CTA
For cryptocurrencies that are asset backed in nature, the trading of such cryptocurrencies could constitute spot commodity trading under the CTA, and a license would be required for such activities.
Under the FSMA
The FSMA was intended to align Singapore’s laws with the Financial Action Task Force (FATF) standards on virtual asset service providers (‘VASPs’) and to regulate ML/TF risks from VASPs.
Under the FSMA, an individual or a partnership must not from a place of business in Singapore carry on a business of providing any type of digital token service listed under Schedule 1 of the FSMA outside Singapore unless the individual or the partnership has in force a licence under the FSMA.
A ‘digital token’ is defined as: (i) a digital payment token under the PSA; or (ii) a digital representation of a capital markets product which can be transferred, stored or traded electronically and satisfies such other characteristics as the Authority may prescribe.
The DLT Act governs cryptoassets and digital ledger technologies, implementing a regulatory framework for crypto-assets in Switzerland.
The DLT Act has selectively adapted ten existing federal laws. The three main pillars of the DLT Act are amendments to :
The DLT Act primarily:
In addition to the above, pursuant to the Banking Act, companies that are in the business of collective custody of cryptocurrencies, where they publicly accept or solicit deposits in crypto-based assets must obtain a FinTech or banking license.
The Anti-Money Laundering Ordinance (“AMLO”) also applies to providers of services related to payment transactions concerning virtual currencies.
Some of Singapore’s laws have extra-territorial jurisdiction. Hence, if overseas businesses intend to carry out regulated activities in relation to Singapore customers, they would have to ensure compliance with such laws.
Foreign FinTech business that provide services to clients in Switzerland may be subject to the FinSA, in particular when promoting financial instruments and/or providing financial advisory and/or asset management services. Financial regulations may also be slightly more stringent if the FinTech product in question falls under a collective investment scheme, insurance or consumer credit.
Nevertheless, most of the regulations prescribed by FINMA such as the FinIA, FinSA and AMLA do not apply to FinTech business that are based overseas, unless for instance (i) they are not regulated abroad and are promoting financial instruments to Swiss retail clients (as such term is defined under FinSA) and/or (ii) they employ persons in Switzerland (on a permanent basis). However, it is important to note that regulations pertaining to local FinTech companies will apply if the foreign FinTech business has established a physical presence in Switzerland, such as a Permanent Establishment or a branch, and/or if the FinTech business employs employees in Switzerland (on a permanent basis).
Presently, there are no prohibited or restricted FinTech businesses in Singapore, as the government has adopted a FinTech-friendly stance. FinTech businesses may be regulated under the Securities and Futures Act, Payment Services Act, or the Financial Advisers Act, depending on their specific activities. FinTech companies are also regulated under Singapore law to combat money laundering and financing of terrorism. For instance, know your customer (KYC) and anti-money laundering (AML) regulations have been put in place to reduce legal risks involved in the FinTech market.
Presently, there are no prohibited or restricted FinTech businesses in Switzerland as such, as the government has adopted a FinTech-friendly stance. Nevertheless, general Swiss laws and regulations for the financial sector apply, such as the Anti-Money Laundering Act (AMLA), the Federal Act on Banks and Savings, and all relevant legislations prescribed by FINMA.
In addition, FINMA has published several guidance papers in which it stressed the importance of an individual review of each business case regarding the regulatory impact. As such, it is advisable for FinTech businesses to seek clearance from FINMA before offering their FinTech products or services in the Swiss market by submitted the business model to FINMA obtaining a so-called ruling (i.e. no-action letter) from FINMA. This would allow to reduce the risks of questions by the FINMA enforcement division when setting up a new FinTech business.
There has also been a proposed reform to strengthen the Swiss AML framework through introducing a federal transparency register on legal entities and their beneficial owners – if a referendum is passed on this reform, FinTech companies, like other legal entities in Switzerland will be subject to disclosing such information for the purposes of the transparency register.
The Personal Data Protection Act (2012) (PDPA) governs the collection, use and disclosure of personal data in Singapore. Under the PDPA, organisations must inform the Personal Data Protection Commission (PDPC) within three days if a data breach takes place. Additionally, corporations are expected to put into place proper frameworks to protect clients’ personal data, such as the mandatory appointment of a Data Protection Officer and will be subject to penalties if it is found that they have been negligent in handling such data.
Since FinTech companies are required to collect large amounts of personal data from customers in compliance with KYC laws, they must in turn comply with the PDPA. To ensure compliance with the PDPA, it is recommended that FinTech businesses develop a data privacy framework to balance between respecting customers’ right to data privacy and the business’ desire to use data for its own purposes.
The PDPA applies similarly to entities that are not incorporated in Singapore, as long as the entity collects/uses/discloses personal data in Singapore. It is worth noting that the cross-border transfer of personal data from Singapore to overseas locations are subject to strict regulations under the PDPA. Such transfers will only be permitted if the foreign organisations can provide a level of protection to the data comparable to that under the PDPA.
In Switzerland, the Federal Act on Data Protection (FADP) is the applicable law for data protection, and any natural or legal person, including both Switzerland-incorporated and international companies which provided goods or services to Swiss citizens are subject to the FADP.
To comply with the FADP, FinTech companies will have to justify their reasons for collecting personal data from their customers and must disclose the identities of the third parties whom the information is transferred to. In addition, any individual, even if their own personal data has not been collected, can ask an organisation what kind of personal information it holds, how the personal information is used, who they share it with and how they collect the data. In addition, in the case where there has been a data breach, companies must notify the Federal Data Protection and Information Commissioner (FDPIC) and all affected individuals as soon as possible.
Further, international data transfers are not allowed under the FADP if the transfer poses a serious risk to the privacy of the concerned individuals. This situation may arise, particularly if personal data is shared with a country whose local laws do not ensure sufficient data protection (e.g. the U.S. or China; all EU member states and the U.K. are generally considered as having adequate data protection regulations for processing personal data of individuals). When personal data is transferred to a company in a country not deemed to have adequate data protection, additional measures must be taken to legitimise the transfer. For instance, there must be specific guarantees drawn up by the relevant federal body that ensures adequacy in data protection. In the alternative, or to supplement the guarantees, Standard Contractual Clauses (SCC) may be implemented by Swiss companies as per the guidelines by the European Commission. Affiliated companies within a group may also adopt “binding corporate rules” on data protection.
Where there is an infringement of any part of the FADP, the companies may be subject to penalties and sanctions.
In addition, most of the FinTech companies are targeting EU citizens and, as best practice standards, the General Data Protection Regulations (EU) 2016/679 will also apply to all contractual documentation and terms and conditions.
Singapore’s key laws relating to cybersecurity that may be relevant to FinTech businesses are as follows:
The Copyright Act (2021): Addresses the trading of works that infringe copyright, which could be the subject of electronic theft.
The Cybersecurity Act (2018): Imposes requirements on owners of vital information infrastructure, cybersecurity service providers, and methods to prevent, manage and respond to cybersecurity threats and incidents.
The Strategic Goods (Control) Act (2002): Controls the exchange and brokering of specific products and technologies including certain information security systems, equipment and components.
The Computer Misuse Act (1993): Protects digital content from unauthorised access or modification. The Computer Misuse Act outlines the punishments for offences in this area.
MAS Guidelines on Risk Management Practices – Technology Risk: Includes risk management principles and the best practice standards to help pave the way for financial institutions manage technological risks.
MAS Notices on Cyber Hygiene: Applies to financial institutions, capital market intermediaries and other MAS-regulated businesses, and which specify the precautions that such institutions must take to reduce the danger of cyberattacks, which is on the rise.
Switzerland’s key laws relating to cybersecurity that may be relevant to FinTech businesses are as follows:
Information Security Act (ISG): Governs information security for both governmental bodies and public companies. ISG authorities subject to the ISG must report security incidents to the competent authority. Moving forward, there may be new reporting obligations of cyberattacks for all critical infrastructures, including private companies in the near future.
FADP: provides for minimum standards of data security measures for companies possessing personal data and an obligation to inform the FDPIC and, where necessary, the affected data subjects of certain personal data breaches.
Financial Market Supervision Act: Mandates that FinTech companies that are subject to the supervision of FINMA (i.e. those holding a license) as well as their audit company are to report certain cyber security incidents to FINMA.
Swiss Criminal Code (SCC): Sets out statutory offences against cybersecurity offences such as the unauthorised obtaining of data, which protect IT infrastructure against cyber crime
National Cyber Security Centre: Switzerland’s competence centre for cyber security, and serves as the primary contact for businesses, public administrations, educational institutions and the general public for cyber issues.
Federal Department of Defence, Civil Protection and Sport: Has established a Cyber Defence Campus dedicated to the early detection and monitoring of current developments in the cyber world and on the development of action strategies in this sector.
Swiss Financial Sector Cybersecurity Centre: Founding members comprise banks, insurers and industry associations, where the Centre’s mission is to enhance the financial sector’s ability to withstand cyber security risks and promote collaboration between financial institutions and authorities on strategic and operational issues.
Budapest Convention (Council of Europe Convention on Cybercrime of 2001): Switzerland signed the convention, which fosters increased and rapid international cooperation in the fight against cyber crime.
Employment law in Singapore is largely provided for by the Employment Act, which covers mandatory benefits such as minimum days of paid annual leave, entitlements to paid sick leave and public holidays, timely payment of wages and legal protection against wrongful dismissal. Additionally, a 17% contribution to each employee’s Central Provident Fund account is required from the employer. Various Singapore laws make other employee benefits obligatory. Maternity and paternity benefits are granted under the Child Development Co-Savings Act 2001 based on the employee’s eligibility.
There is no specific employment law for FinTech employers, and the Employment Act applies to all employment relationships based in Singapore.
Employment law in Switzerland is governed by the Code of Obligations (Obligationenrecht/Droit des obligations/Diritto delle obbligazioni), which govern the terms of an employment contract, and Federal Labour Law (Arbeitsgesetz/Loi sur le travail/Legge sul lavoro), which covers aspects like the maximum hours an employee can work in a week, overtime wage entitlements, entitlements to daily rest periods, and extra protection for Young workers, pregnant women and nursing mothers, as well as employees with family commitments. In addition, Employees whose annual earnings exceed CHF 22,050 with the same employer are required to join the compulsory pension system under the Occupation Benefits Act. The contributions vary according to an employee’s age, and employers must contribute an amount that is equal to the employee’s contribution.
There are no specific employment law for FinTech employers, and the Employment Act applies to all employment relationships based in Switzerland.
Foreigners who wish to work in Singapore must obtain a work permit. The type of permit required depends on which category the foreign workers fall into: professionals; skilled; or semi-skilled workers.
While it is necessary for Singapore to attract foreign talent and remain globally connected, the government still seeks to ensure that there are sufficient jobs available for citizens before introducing new foreign talent, through avenues such as the compulsory advertising of selected jobs on the MyCareersFuture portal, which is only made available to Singaporeans.
For foreign entrepreneurs who are looking to launch and run businesses in Singapore that is venture-backed or possess innovative technologies, they could apply for the EntrePass. The government has also introduced the Tech.Pass visa, which allows established technology leaders, experts and entrepreneurs to introduce and implement innovative technology ideas in Singapore. Holders of a Tech.Pass will not need to get an employer to sponsor them, and employees can apply for the Tech.Pass on their own.
In Switzerland, to employ foreign employees who will work for more than eight days in a calendar year, a work visa is required and an employer will likely have to sponsor the employee’s work visa.
It is generally easier for EU and EFTA nationals to work in Switzerland due to treaties and free movement in the European Union. Notably, employers with a registered seat in an EU or EFTA member state can post their employees to Switzerland for up to 90 days per year by simply registering the employee eight days prior to their first day of work in Switzerland, without the need to apply for a work permit.
However, work permits for employees who are not from the EU or EFTA will be subject to federal and national quotas. In addition, the non-EU or EFTA employees would need to demonstrate that it possesses a high level of professional qualifications, and to show that he has sufficient financial means to support himself without relying on social welfare.
There are no special regulations for FinTech businesses employing overseas employees. However, since the IT and tech industries are deemed as areas with skills shortages, it will be generally less onerous for a foreign FinTech employee to be awarded a work visa.
Innovations or inventions which are man-made are classified as Intellectual Property (IP) in Singapore. IP rights may be registered as a copyright, a patent or a trademark. For the protection of patents, copyrights, trademarks and other forms of intellectual property, Singapore has a robust legal system and accompanying infrastructure. The following are the relevant legislations which are put in place to protect IP in Singapore: the Copyright Act (2006); Patents Act (1994); and Trade Marks Act (1998).
The Ministry of Law established the Intellectual Property Office of Singapore (IPOS) Act, a statutory board tasked with advising on and enforcing IP legislation. It was ranked in 2021 as the world’s third-most inventive IP office. IPOS also contributes significantly to the financial development in Singapore. The FinTech Fast Track project was introduced by IPOS in April 2018 and aims to reduce the time from application to grant for FinTech patent applications to as little as six months. It has now been replaced by the SG IP FAST programme which extends to all technology fields, and covers related trademark and registered design applications.
Further to this, the IPOS has launched the Singapore IP Strategy 2030, which aims to strengthen Singapore’s position as a global intangible assets and intellectual property hub through governmental efforts that ensure a conducive environment for businesses to protect, manage and transact their intangible assets and intellectual property.
FinTech innovations and inventions can be accorded contractual protections, and there are also existing statutory protections in place.
FinTech innovations and inventions are typically protected as copyright or patents. Considering that FinTech products are usually computer programmes based on software, they are likely to be protected under Swiss copyright law rather than patent law – patent registrations are generally not allowed for computer programmes.
However, there are instances when FinTech inventions may be protected through a patent registration, such as in the invention of computer-implemented solution to a technical issue. Whether a FinTech innovation will be copyrighted or patented depends on the novelty and non-triviality when compared to existing computer programmes.
Copyright protection for computer programs lasts 50 years after the author’s death, while software that is essential to an invention can be patented for up to 20 years.
Further, the design of FinTech protects may be protected by the Swiss Trademark Act, where FinTech companies may trademark their design up to a period of 10 years, renewable upon expiry.
Products that are marketed are additionally protected by the Swiss Unfair Competition Act, which guards against technical reproduction and exploitation without adequate effort from the reproducing party.
For protection under the Copyright Act, there is no formal registration procedure for copyrights. The creation of the work triggers the start of the copyright; simply having the concept is inadequate. A person must be able to prove that they were the original creator of a work in order to establish ownership. Authors occasionally mail a copy of the work to themselves or an attorney and retain it sealed in the envelope with a postmark to serve as proof of this. The well-known © mark on a work indicates the presence of a copyright; nonetheless, failure to use the symbol does not affect the owner’s rights.
For registration under the Patents Act, an applicant can either register domestically or internationally. For domestic application, individuals who want to apply for a patent exclusively in Singapore may do so in person or online at the Registry of Patents, which is a division of IPOS. For international application, applicants who intend to submit a Patent Co-operation Treaty (PCT) application in order to get a patent other PCT contracting states may do so using Singapore’s Registry of Patents as the receiving office. Likewise, applicants in other PCT contracting states may seek protection in Singapore through a PCT application.
Registration under the Trade Marks Act can be done through IPOS. A trademark may be registered in person or online. Before registration, the applicant must ensure that the trademark is not currently being used by a company that is similar. To do that, a Similar Mark Search may be performed to find the Nice Classification for the products and/or services offered by the applicant. The registration may be for various types of goods and/or services at once. Additionally, there is the option of registering only in Singapore or globally through the Madrid Protocol, the World Intellectual Property Organisation’s system for international trademark registration. An international applicant from a member country of the Madrid Protocol may also designate Singapore for trademark protection under an international application.
In Switzerland, national IP rights are enforceable. If a trademark is already protected in Switzerland, it is possible to extend the protection to numerous countries through an international procedure. This can be done using the Madrid System, administered by the World Intellectual Property Organization (WIPO).
Here is how it works:
This process is advantageous because it eliminates the need to file separate national applications in each country, thus reducing administrative burden and costs significantly.
