Foreign Direct Investments in Switzerland

Switzerland counts among both the World biggest recipients of foreign direct investments and the World biggest direct investors.

Therefore, Switzerland historically and knows no general restrictions on foreign investments.

Against the background that many countries know investment controls, recent political efforts ask the Federal Council to consider reciprocity, i.e. the possibility of implementing investment controls for critical sectors where corresponding controls exist in the investor’s country.

In its report of 2019, the Federal Council has come to the conclusion that the implementation of investment controls is not necessary. However, the Federal Council will, until 2023, closely monitor all sectors of critical infrastructure and analyse whether there exist significant risks of supply disruption.

The Investment Screening Act is unlikely to come into force before 2028.

The focus of the investment screening will be on state-controlled investors and domestic companies that operate in national security-sensitive industries and other critical sectors, whereby, for certain sectors, de minimis thresholds shall apply.

The Federal Council adopted the dispatch for an Investment Screening Act (IPG) on December 15, 2023. The Act is now being negotiated in parliament.

With the adoption of the motion 18.3021 Rieder "Protection of the Swiss economy through investment controls" in March 2020, the Parliament instructed the Federal Council to create a legal basis for controlling foreign investments.

The following foreign investments are subject to prior clearance:

• Acquisition (including financing) of real estate / investment in real estate companies by foreign individuals/companies with residence/seat outside Switzerland, unless real estate is used (a) commercially or (b) as holiday home (there exist certain contingents) (approval from the competent cantonal authority)
• Banks that after incorporation are controlled by foreign investors, require approval from the Swiss Financial Market Supervisory Authority (FINMA); in this case, a FINMA approval is also required if foreign investors with qualified shareholdings change (i.e. direct or indirect control of  10% of the capital or the voting rights or in other way substantially influencing the business activity).
  

Swiss domicile:

• Swiss stock companies / limited liability companies and cooperatives must be represented by an individual with domicile in Switzerland (board member / member of the supreme management body / director).
• Such representative must have access to the share register, the register on the shareholders of bearer shares and the register on the ultimate beneficial owners.

Antitrust clearances:

Swiss Competition Authority clearance required if in the financial year preceding the operation

• the overall aggregate turnover of the concerned companies is  CHF 2 billion or the aggregate Swiss turnover of CHF 500 million, and
• at least two of the concerned companies individually have a minimum turnover in Switzerland of CHF 100 million.

GAFI-reporting: Swiss stock companies (SA) and Swiss limited liability companies (Sàrl) must disclose their ultimate beneficial owners (i.e. individuals, not companies) in case of direct or indirect shareholding of  25% or in case of exercising control over the company.