Gnosis partners with Toku to roll out locally compliant token grants for EOR employees in Switzerland
Gnosis is a decentralized platform that aims to facilitate secure, transparent, and censorship-resistant transactions and interactions on the blockchain. The platform provides a suite of tools and protocols that enable developers to build and deploy decentralized applications and services.
Their ecosystem aims to empower users by providing them with the tools and infrastructure to participate in the decentralized economy and make informed decisions based on accurate information and market signals.
The Gnosis core team is globally distributed with over 80 employees based across North America, Europe, South America & Asia. As such, local compliance is core to Gnosis’s global operations.
“We were looking for a solution that could both help us offer full-time employment in Switzerland and compliantly compensate contributors in native tokens. Toku made the process seamless, building out a locally compliant token option agreement, option exercise program and tax compliance process, while providing the employment infrastructure we needed.”
- Karan Aswani, Chief Legal Officer of Gnosis Chain
Addressing the real world needs of contributors while continuing to offer token grants
Gnosis has a strong legal, accounting and finance teams, well-equipped to handle token compensation for their global contributor-base. However, they needed a solution to provide for full-time employment while continuing to be able to offer token compensation, including token grants.
The reason for this is that Gnosis realized that contributors in their global workforce have personal requirements that can only be fulfilled by an employment relationship. Contributors may require full-time employment for the purposes of obtaining a visa, for example, or may need employment verification or proof of income needed to get a mortgage.
Gnosis needed a solution to address these real world needs, while offering Swiss-compliant token grants that would receive the correct tax treatment in Switzerland.
Compliance with US laws and state-specific regulations
Access to full-time employment benefits in the US
Accurate withholding calculations & timely tax payments
Saving 30+ hours per month and running a lean finance team
Swiss employment with locally compliant token grant awards
Gnosis partnered with Toku to come up with a solution to continue to compliantly compensate in native tokens (GNO) in the context of a full-time employment relationship in Switzerland. This required close collaboration with the Toku team, not only to design a token option agreement in line with Swiss laws, but to build out how the option exercise program would take effect in practice.
This also required that the token option award reflected the obligations under Swiss law, including the requirement for token options to be treated as income to the employee from a tax perspective. On the employer side, Toku also needed to ensure that Gnosis was aware of the employer cost due on delivery of the token options to the employee. Toku was able to calculate the employee and employer tax obligation on the token options and remit payments on each to the Federal tax administration in Switzerland.
Technical note: In Switzerland, token payments such as token options qualify as bonus payments and are subject to social security contributions based on the fair market value at the time of receipt by the employee. Tax withholding is necessary on mandatory social contributions prior to delivering tokens to an employee.
Toku also designed a process around exercise of the token options each month and tracking of the token grant and its respective vesting. By having Toku handle this process in house, Gnosis is able to save hours each month in processing tokens, making payments and tracking grants manually. On top of that, Toku has been able to provide visa support in Switzerland. This was made possible by working closely with Toku on the employment relationship, token options agreements, and tax compliance.