Tokenization starts with law, not technology
One of the first decisions every tokenization project faces is deceptively simple:
Where should we issue the token?
For many years, the answer seemed obvious.
“Let’s incorporate a foundation in Zug, Switzerland.”
That approach made sense when Europe lacked a harmonised legal framework for crypto-assets. Switzerland offered legal certainty, an established blockchain ecosystem and a favourable tax environment.
Today, however, the landscape has fundamentally changed.
Since 1 July 2026, the transitional period established by the Markets in Crypto-Assets Regulation (MiCA) has come to an end. Any business wishing to offer crypto-assets or provide regulated crypto services within the European Union must now fully comply with the Regulation.
This means that choosing a jurisdiction is no longer simply a tax or corporate decision.
It has become a question of legal architecture.
The answer depends not only on where your company is incorporated, but on what your token represents, which activities your business performs and which markets you intend to reach.
The first question is not “Where?”
Most founders immediately ask:
Should we incorporate in Switzerland or in the EU?
That is usually the wrong starting point.
The first question should be:
What legal activity will the business actually perform?
This distinction is essential because MiCA regulates two very different realities.
The first is issuing or offering crypto-assets to the public.
The second is providing crypto-asset services.
Confusing both activities is one of the most common mistakes in the market.
Issuing a token does not automatically require a MiCA licence
Many entrepreneurs still believe that every token issuer needs a CASP licence.
That is incorrect.
For most ordinary crypto-assets covered by Title II MiCA, issuing a token generally requires:
- preparing the crypto-asset white paper;
- notifying it to the competent authority of the relevant Member State;
- publishing it before the public offering.
No CASP licence is required merely because a company issues its own token.
Consequently, many tokenization projects can launch within the European Union without becoming regulated financial institutions.
This dramatically reduces regulatory costs.
When is a CASP licence actually required?
The situation changes completely when the company intends to provide regulated crypto services.
Typical examples include:
- custody of clients’ crypto-assets;
- operating an exchange platform;
- executing orders;
- portfolio management;
- crypto investment advice;
- transfer services;
- operating a trading platform.
These activities require authorisation as a Crypto-Asset Service Provider (CASP).
Depending on the services provided, MiCA requires minimum own funds ranging from €50,000 to €150,000, together with governance, compliance, risk management and organisational requirements.
Fortunately, many token projects never need to become CASPs.
Instead, they can outsource custody, exchange or trading services to providers that are already authorised.
For many startups, this is the most efficient solution.
Everything depends on the legal nature of the token
The next critical question concerns the legal classification of the token itself.
MiCA distinguishes several categories of crypto-assets.
The first category covers ordinary crypto-assets, which are generally subject to the lighter regime contained in Title II.
The second comprises Asset-Referenced Tokens (ARTs).
The third includes Electronic Money Tokens (EMTs).
This distinction is crucial.
If a token is designed to maintain a stable value by referencing one or several assets, currencies or similar mechanisms, the issuer falls within a much stricter regulatory framework.
In practice, stablecoins require an entirely different legal strategy from utility or governance tokens.
The legal classification of the token therefore determines:
- the applicable regulatory regime;
- who may issue the token;
- disclosure obligations;
- ongoing compliance requirements;
- the project’s viability within the European Union.
Switzerland remains attractive—but no longer solves access to Europe
Switzerland continues to be one of the world’s leading blockchain jurisdictions.
It offers:
- considerable legal certainty;
- extensive experience with digital asset projects;
- attractive corporate taxation, particularly in cantons such as Zug;
- predictable tax rulings for token issuances.
However, founders should understand one fundamental point.
A Swiss company does not obtain access to the European market simply because it is established in Switzerland.
MiCA does not provide a general third-country passport.
A Swiss issuer targeting the EU must still analyse whether MiCA applies to its activities.
For well-funded projects with substantial treasuries and international ambitions, Switzerland may remain an excellent choice.
For smaller startups primarily targeting European investors, incorporating directly within the European Union is often simpler and more cost-efficient.
Which EU jurisdiction should you choose?
Once the decision is made to establish within the European Union, founders often ask which Member State offers the best balance between regulation, cost and taxation.
There is no universal answer.
Each jurisdiction has different strengths.
Lithuania has become one of Europe’s most attractive jurisdictions thanks to relatively low incorporation costs, regulators familiar with crypto businesses and a competitive corporate tax regime.
Estonia continues to appeal to technology companies because retained profits remain untaxed until distributed, making it particularly attractive for projects that intend to reinvest earnings.
Spain has become increasingly relevant for projects with local legal and operational teams. It combines the MiCA framework with an evolving startup ecosystem, although corporate taxation remains higher than in some competing jurisdictions.
Malta still offers attractive effective tax outcomes through specific corporate structures but usually involves greater administrative complexity and higher maintenance costs.
The appropriate jurisdiction therefore depends on the project’s objectives, funding, operational substance and long-term strategy.
The myth of excluding European users
Some founders believe they can avoid MiCA simply by including a clause stating:
“This token is not offered to EU residents.”
Unfortunately, reality is more complicated.
European regulators increasingly examine the actual economic activity rather than contractual wording.
If a project actively targets European users, superficial disclaimers are unlikely to provide meaningful protection.
Likewise, relying on so-called reverse solicitation is rarely a sustainable business strategy.
If Europe forms part of your commercial objectives, compliance should be considered from the outset.
Think about dispute resolution before launching
Most token issuers dedicate significant resources to tokenomics, smart contracts and fundraising.
Very few think about what happens when disputes arise.
Yet every project eventually faces questions such as:
- Who decides whether contractual obligations have been fulfilled?
- How are governance disputes resolved?
- What happens in cases of fraud?
- Which law applies?
- Which forum has jurisdiction?
These questions should not be answered after a dispute occurs.
They should be addressed within the project’s legal documentation from day one.
For international tokenization projects, incorporating a specialised blockchain arbitration clause—such as the rules developed by the Blockchain Arbitration & Commerce Society (BACS)—can significantly reduce uncertainty, costs and enforcement risks.
Good legal architecture anticipates disputes before they arise.
Conclusion
The end of MiCA’s transitional period marks a new phase for blockchain projects operating in Europe.
The question is no longer whether regulation exists.
It is how to design projects that comply with it while remaining commercially efficient.
For some businesses, Switzerland continues to be an excellent jurisdiction.
For others, establishing directly within the European Union will provide a more practical solution.
The answer depends not on tax rates or fashionable jurisdictions, but on the legal architecture of the project.
Because successful tokenization does not begin by choosing Ethereum, Solana or Base.
It begins by answering a much more important question:
What legal rights will this token represent, and under which legal system will those rights be recognised, protected and enforced?
