Ultimate Beneficial Owners in Switzerland

No, not yet.

At its meeting on 22 May 2024, the Federal Council adopted the dispatch on the further development of the anti-money laundering framework to be submitted to Parliament. The aim is to reinforce the integrity and competitiveness of Switzerland as a financial and business location by means of a federal register of beneficial owners and due diligence for particularly risky activities in legal professions, as well as other provisions. The measures are in line with international standards.

In principle, all companies and legal entities in Switzerland will be required to enter their beneficial owners in the federal transparency register (except for, as per the current draft, foundations, associations and trusts).

The bill is not expected to come into force until 2026 at the earliest.

Based on the current draft of the bill, the beneficial owner of a company is any natural person, who ultimately controls a company by holding, directly or indirectly, alone or in concert with third parties, at least 25 percent of the capital or votes in the company, or who controls it in some other way.

If no person meets these criteria, the most senior member of the governing body is deemed to be the beneficial owner.

The legal entity must notify the register of the identity of its beneficial owners (see list of information in section 4 below) and the nature and extent of the control exercised by the beneficial owners.

If a person acquires the status of beneficial owner, she/he must report this to the shareholders or partners who hold the corresponding shares or, if control is exercised in another way or via several companies or persons (chain of control), directly to the legal entity. The following information must be disclosed:

• Surname and first name
• Date of birth
• Nationality
• Address and country of residence
• Required information on the nature and scope of the control exercised
• control exercised

The notification must be made within a period of one month after the corresponding share has been acquired or control over the legal entity has been obtained in another manner.

The beneficial owner must also notify any changes to this information within one month of such change.

At the request of the legal entity, the beneficial owner must provide information or evidence necessary to verify the identity or capacity of the beneficial owner.

The transparency register will not be public.

As per the current draft of the bill, access will be reserved for the competent authorities for the tasks specified in the draft, as well as for financial intermediaries and advisors who are subject to the Anti-Money Laundering Act when fulfilling their due diligence obligations.

The draft provides for a cascade of sanctions:

If the supervisory authority determines that an entry is incorrect, incomplete or not up to date, it can oblige the legal entity to submit additional information. The Control Authority can also order the amendment or deletion of information from the transparency register. Finally, the Control Authority may order that the result of the audit be noted in the Transparency Register.

If shareholders or partners have repeatedly violated their reporting obligations, the Control Authority may suspend their participation and property rights. The suspension will be lifted if the person concerned subsequently fulfils their obligations.

In particularly serious cases of breach of reporting obligations by the legal entity, i.e. if it repeatedly and seriously breaches its obligations, the Control Authority may, as a last resort, order its dissolution and liquidation in accordance with the provisions on bankruptcy. In the case of legal entities under foreign law that have a branch office in Switzerland, the Control Authority may order the deletion of their entry from the commercial register.

Article 50 penalises the violation of reporting obligations with a fine of up to CHF 500,000.