Posts in "Corporate Law"

Business and Tax Incentives in Switzerland

Switzerland has a detailed system of financial incentives and tax relief. This outline is available for all legal business structures. While before 2020, each canton had its own strategy to compensate firms, now there are an equal number of incentives available throughout Switzerland. These incentives and reliefs can be applied by all businesses.

Procedures for submitting and assessing tax returns

In most cases, the tax year and the calendar year are the same; nevertheless, businesses are able to choose a different financial year. Within six to twelve months after the conclusion of a company’s financial year, tax returns must be submitted (depending on the canton).

In general, cantonal income taxes are paid in installments throughout the financial year (depending on the tax charge from the previous year) and at the end of the year based on a final assessment (upon reception and review of the respective tax return by the tax authorities). It is normally expected in the third or fourth quarter of the current fiscal year. On March 1, after the conclusion of the fiscal year, federal corporate income tax is due and must be paid within 30 days.

The tax return is examined by the tax authorities in the jurisdiction where it was filed. Within 30 days after receiving the final assessment, an appeal may be lodged if the assessment is not in conformity with the tax return that was submitted and the relevant legislation.

When it comes to tax audits, there are no set intervals, and not every firm is audited at all.

Considerations of Other Kinds

Indirect Taxes

Transfer pricing law is not in place in Switzerland, nor are there special paperwork requirements. Because of this, related-party transactions must be conducted at arm’s length and commercially justified under the general tax laws.

Rules for Controlled Foreign Corporations

Because of this, Switzerland does not have CFC regulations, unlike many other nations.

Money With Purpose

Since the Swiss Franc statutory accounts must be used to submit tax returns, alternative functional currencies may be utilized instead. According to a Federal Supreme Court ruling, a company must distinguish between “operative” currency gains and losses based on foreign currency transactions and “functional” currency gains and losses based on the conversion of financial statements from a functional currency into Swiss francs at year-end. Switzerland’s Supreme Court has determined to negate any impact on Swiss taxes caused by the simple transfer of funds from one currency (such as a functional currency other than CHF) to another currency (such as CHF).

New accounting rules came into effect on January 1, 2013 (effective January 1, 2015, and 2016, respectively, after the end of the relevant transfer period covered by the Swiss Code of Obligations (OR)). You may maintain the books and report in a currency other than CHF using these concepts.

Rules for Reorganization

Reorganization (i.e. merger, demerger, hive down, share-for-share transfer, asset transfer, conversion) may be tax-deductible in Switzerland if certain requirements are satisfied, including:

  • Continued tax obligation in Switzerland; transfer of company assets/investments at tax book values; disposal limitation term or other criteria may apply.
  • Direct and indirect taxes, capital gains taxes, and transfer taxes on real estate may all be neutralized.

The Tax Court Rulings

An agreement between the tax authorities and the taxpayer is known as a tax decision (e.g. reorganization of a group, functional currency matters, etc.). Swiss tax law and practice may be interpreted in an adverse light if a binding decision is requested in advance (the ruling process does normally last for two to four weeks).

Tax judgments are founded on mutual confidence, thus all necessary information must be provided to the tax authorities. In addition, there is no time limit. It is standard practice to give transition periods in the event of tax legislation changes.

Other Taxes are included in this category.

  • Income Taxes
  • Withholding taxes of 35 percent apply to dividends paid by a Swiss firm, interest payments on bonds, cash bonds, money market instruments, and any customer deposits in Swiss banks.

In addition, withholding tax applies to the revenue distributed from Swiss funds (including reinvestment in non-distributing funds) (based on the so-called “”Affidavit Procedure”” no withholding tax is however levied if more than 80 percent of the income generated by the fund is foreign-sourced and the unitholder is resident outside Switzerland which is evidenced).

In the case of loans secured by Swiss property, a specific tax must be taken from the interest payments (the tax rate applied depends on the canton where the real estate is located).

There is no withholding tax on earnings transferred from a Swiss branch to the overseas main office.

Furthermore, in Switzerland, if the arm’s length principle is followed, no withholding tax is applied to royalties, management and service fees, and interest on loans. The arm’s length principle may not be met in the instance of payments made to a connected person or entity, and as a result, withholding tax may be applied. According to the arm’s-length principle, the recipient would receive a net 65 percent dividend after deducting the withholding tax, and thus the withholding tax would be 53.8 percent. In this case, the recipient would receive a net 65 percent dividend after deducting the withholding tax, and thus the withholding tax would be 53.8 percent.

Share capital and share premiums that qualify for the so-called “”capital contribution principle”” are not subject to withholding taxes (former direct shareholder contributions qualifying as capital contribution reserves).

Refund procedures generally allow Swiss residents, both individuals and legal entities, to obtain a complete refund in the event of a Swiss withholding tax. Even for intra-group dividends paid inside Switzerland, the so-called “”notification method”” may allow for a complete reduction in withholding tax at the point of origin.

In light of Switzerland’s vast tax treaty network, a complete or partial refund of withholding tax payable on dividend payments from a Swiss firm to its foreign shareholder should be conceivable, provided the relevant requirements are satisfied. A complete or partial reimbursement of the withheld tax may be available under the EU-Swiss Savings Agreement (which is a bilateral agreement between Switzerland and the EU). Depending on the circumstances, a notification process may be required when the corporate shareholder is a resident of the EU or a country with which Switzerland has a double tax treaty.

As long as the necessary circumstances are satisfied, there should be no tax repercussions for reorganizations (please also refer to the above comments).

Imposition of Stamp Duty

A 1% stamp tax on the cash or fair market value of the assets donated by the direct shareholder is levied on Swiss firms when equity is issued or increased (first MCHF 1 million is however exempt). Bond and commercial paper issuances are exempt from the issuance stamp tax.

Stamp duty may be waived in certain types of reorganizations provided certain requirements are satisfied (please also refer to the comments above).

If specific conditions are satisfied, the shareholders of an over-indebted corporation may also be eligible for an exemption.

Transfer Tax on the Sale of Financial Instruments

When a Swiss bank or another Swiss securities dealer serves as a counterparty or an intermediary in the transfer of ownership of Swiss and foreign taxable securities, securities transfer tax may be applicable.

Swiss securities dealers include the following parties:

Securities with a book value greater than MCHF 10 that are held by Switzerland’s banks and bank-like financial institutions as well as the Swiss national bank; Swiss individuals, corporations, partnerships, and branches of foreign companies that engage exclusively or substantially in trading securities on third-party accounts or in brokering such securities

In the case of Swiss securities, the tax rate is 0.15 percent, whereas it is 0.33 percent for international securities (remuneration paid generally to be considered when determining respective tax liability).

Certain transactions, on the other hand, may be excluded from taxation (e.g. qualifying reorganizations, please also refer to the above comments). Additionally, certain counterparties may be free from taxation, which means that just one of the parties involved (or, if both are exempt, none of them) is responsible for paying the tax.

In Switzerland, Value Added Tax (VAT) is charged on the supply of products and services, on the import of commodities, and on services acquired from outside by enterprises that are registered for VAT purposes. VAT is not charged on a number of certain products and services (e.g. financial services, real estate transactions, the transfer of shares).

Swiss VAT does not apply to exports or turnover produced outside of Switzerland or Liechtenstein.

However, anyone or any legal entity (such as a subsidiary, branch, or trader) that engages in a commercial, professional, or non-profit activity that generates income must register for and charge VAT if the total annual supply of goods, services, and self-consumption within Switzerland exceeds CHF 100,000.

Individuals and legal organizations that acquire services from outside the country should be aware that VAT may be due.

In Switzerland, the current VAT rates are as follows:

  • The standard interest rate is 7.7%.
  • Food, medicine, newspapers, and books all have a reduced tax rate of 2.3%.
  • 3.5 percent discount for accommodation services

Input VAT may be eligible for a full or partial refund (reduction of the input tax only with regard to exempt turnover and certain so-called “”non-turnover””).

A group of Swiss companies may be formed for VAT reasons. In certain situations, it is feasible to achieve tax efficiency via voluntary VAT registration, which may be used to optimize VAT.

Overview of the Swiss VAT

VAT in Switzerland

In 1995, Switzerland implemented its present value Added Tax (VAT) system. Federal Tax Administration (FTA) is now in charge of overseeing Swiss VAT returns, compliance, and registration for non-resident traders. A non-resident trader registration is required for EU companies doing business in Switzerland, whether buying, selling, or importing products. All sales, including those of raw materials, are subject to VAT.

What is the Swiss VAT?

If you’re planning to establish a Swiss business, you need to keep in mind that you’ll also need to register for VAT after the company registration process.

Since 2011, Switzerland has had the lowest VAT rate in Europe, at 8 percent. Companies that sell food, medicine, newspapers, and books will also be eligible for lower VAT rates of 2.5 percent. There is a 3.8 percent VAT on accommodations, but there is no tax on public health, education, or social or financial services of any kind. A UID number, which local customs agencies already use for Swiss enterprises exporting products, will be required by the VAT Office for local businesses. Importers from outside Switzerland must utilize their EORI number to do business here.

Unlike other EU member states, Switzerland is free to determine its VAT rates and isn’t bound by EU regulations (a standard rate of 15 percent or above). A VAT filing is required for all service providers to collect the right VAT rate and the tax and pay it to Swiss tax authorities.

Switzerland’s current VAT rates are as follows:

-standard rates have been reduced from 8.7% to 7.77%;

– some tourist activities, such as hotel stays, are subject to a reduced tax rate of 3.7%;

– an additional reduced rate of 2.5% applies to a broad range of items sold in Switzerland such as food and beverages (except those sold in hotels); agricultural supplies; water; printed materials; medicines; cultural and sporting events.

– Exports of products and services for aviation operations are tax-free.

Businesses from other countries operating in Switzerland must adhere to local VAT regulations:

• They must utilize foreign currency rates that the relevant authorities have authorized.

• Make any required changes.

• Ensure that clients are invoiced by Swiss VAT legislation.

• The receiver’s signature, legitimacy, and consent must be included in the electronic invoices.

• A minimum of 10 years is required for keeping records.

In Switzerland, who must register for VAT?

According to Swiss law, both individuals and businesses are obliged to register for VAT if they sell or supply products or services subject to VAT.

When a firm first begins operating, registering for VAT is entirely optional. However, the national law stipulates that it might become necessary after generating a certain amount of revenue.

When establishing a business in Switzerland, foreign companies are also needed to register for VAT. A business in Switzerland may benefit from the country’s low VAT rate, which is one of Europe’s lowest standard VAT rates.

Swiss VAT registration in 2022

As a result of Switzerland’s adoption of the EU’s reverse charge laws in 2010, the number of businesses registering for VAT has decreased significantly.

Companies that are required to register for VAT are those that do the following:

• import items to Switzerland.

• Buying and selling items inside the nation.

• Create an online shopping experience for Swiss customers. 

• Warehouse storage of items till resale

• Organize performances and live events that sell tickets.

• In Switzerland, services are delivered on the reverse charge rule (even if they are non-VAT traders)

Before applying for VAT in 2022, a firm must be registered with the Commercial Registry. It may then submit an application in person or online at a Local Federal Tax Administration office. The authorities issued a tax identification number (UID), and the process is complete (Unternehmens-Identifikationsnummer).

Switzerland’s voluntary VAT registration

While VAT registration is not required to start a company in Switzerland, getting a tax identification number is necessary.

However, a Swiss VAT number should be obtained as soon as possible, as it will save time later when the firm must wait for the number to be given, saving money. Businesses might seek voluntary registration when they expect their operations to bring in enough revenue to justify required registration.

Registration is required in Switzerland.

As soon as a company’s annual revenue surpasses 100,000 CHF, it becomes exempt from paying corporate taxes in Switzerland. If this is the case, you have 30 days from the day you meet the need to finalize your VAT registration.

Switzerland’s VAT compliance

In Switzerland, all individuals and businesses, foreign or domestic, must comply with the country’s VAT laws. Among the many:

– they must produce invoices that include the VAT amount and the rate at which it was imposed;

– the need to keep VAT records and accounting (which must be kept at the company’s headquarters for a minimum of 10 years);

– if necessary, they must also produce credit notes.

Taxpayers may send electronic invoices that need a signature and other verification components. As for overseas VAT payers, they must follow Swiss invoicing rules. Invoices may be issued using a variety of allowed currency rates.

The following requirements must be followed when it comes to reporting and paying VAT:

– Reporting may be done on a monthly or quarterly basis;

– After reporting, the VAT payment must be made within 30 days.

In certain circumstances, VAT exemptions apply. There are a few exceptions: healthcare, education, and culture. VAT exemptions also apply to the sale or leasing of real estate.

VAT refund in Switzerland

All earnings produced in Switzerland are subject to Swiss VAT. The Swiss government offers tax refunds to companies that pay VAT in Switzerland. Certain foreign corporations are eligible for VAT refunds just once a year; however, this does not apply to all of them. Application signed by the business owner must be submitted to the Federal Tax Administration of Switzerland by June 30 of that year to be eligible for a refund. In 2022, he must provide genuine invoices and confirmation of Swiss VAT registration. If the proof is approved, the company owner will get the return within six to nine months.

Deportation-related purchases are eligible for VAT refunds. A Switzerland VAT Refund Station must be visited to get the VAT refund, which requires receipts for the products bought and, if possible, evidence of departure. Airports, tourism offices, and international travel hubs are popular targets.

Intra-community VAT will be in place in Switzerland in 2022.

A common set of tax rules governs Switzerland’s trade dealings with the EU since the country is a member of the Economic Free Trade Association. Any business that sells products or services, regardless of whether it is based in the EU or Switzerland, must charge VAT to the customer’s nation. Electronics, telecommunications, television, catering, education, and culture are exceptions.

VAT registration in Switzerland in 2022 is simple.

Switzerland’s accounting services

Switzerland has a three-tiered corporation taxation structure that might be challenging for international investors to understand. Although Switzerland is not a member of the European Union (EU) and does not have to apply the normal VAT rate at a minimum of 15%, some elements must be addressed when dealing inside the European Union (EU).

Swiss Data Protection Act Compared to General Data Protection Regulation (GDPR) of the EU

The new Data Protection Act (DPA) of Switzerland has been passed in the Swiss Federal Parliament on the 25th of September 2020 and is expected to step in to force this year in the summer.

What will the new Swiss law on data protection bring and how will it apply with the GDPR?

More regulation?

One of the main changes with the new law is new obligations to maintain:

  • Records of the processing activities of personal data;
  • Reporting losses of data and other security breaches to the “FDPIC” – Federal Data Protection and Information Commissioner;
  • “DPIA” – Data Protection Impact Assessments;

The above-mentioned was basically copied from the GDPR and will result in heavier loads of work for the companies in Switzerland who will have to adapt to these new changes.

However, the basics of data processing have not been changed all that much. Private companies in general, will not have to do many changes in the way they process personal data. The Swiss principle (legal grounds) by which the processing of personal data is permissible and justification remains the same.   

This means the Swiss Data Processing act although is made to comply with GDPR, in a way it is still different.

When it comes to providing consent Swiss DPA is less restrictive than GDPR

Unlike GDPR, Swiss DPA does not oblige the Data Processor to inform the subjects about the possibility to withdraw their consent about the processing of their personal data. Also, a combination of multiple consents is possible according to the DPA. The reasons for justifying the activities of data processing, in general, have remained the same.

The new principle “Privacy by Design” which was explicitly included in the new Swiss DPA is not actually new, it has always existed in the Swiss data protection law. As a matter of fact, “Privacy by Default” is the single new provision in the new Swiss DPA which refers to cases where an online service provides, is obliged to provide settings for data protection as an integral part of the services.

New Swiss DPA does not require data protection officers (DPOs)

Even though the new Swiss law on data mentions “Data protection advisors” which basically are Data Protection Officers (DPOs), Swiss companies have no obligation to employ one, unlike EU states.

In reality, if larger companies wish to remain compliant and implement the new laws in a proper manner, they will have to appoint DPOs as this field requires a lot of expertise and knowledge of data protection regulations. Some large corporations have implemented whole new sectors to address this issue and to be able to comply and avoid being fined for failing to do so.

There is a restriction on the Right to information

The rights of the subjects under this new law have also been defined more clearly and a bit extended.

“The right to be forgotten” which comes from GDPR has already been implemented in the old DPA and will remain in the new one as well. Also, the principle for data processing to be allowed as long as necessary remains in force.

“The right to data portability” however, is quite a new concept introduced in the new Swiss DPA that entails the option for subjects to be able to request their personal data stored with providers of online or other services to be transferred.  

Agreements for data processing

Companies will have to draft contracts with third parties who will have access to the personal data they possess of their employees, clients, subcontractors, and others.

Privacy policy declarations are now mandatory

With the new DPA, companies will be obliged to provide mandatory information on connection to the personal data they process. Such information mainly is provided on their websites which should appear when a person opens the link to the site. As an example, these policies will have to provide information of which data is collected from the subjects, legal grounds of collecting such data, the contact information of the Data protection officer (if appointed), exports of personal data, and reasons to do so.

The new DPA will bring more severe fines, but with the exception

Previously the FDPIC could only issue recommendations to data controllers and processors who did not comply with DPA. However, with the new DPA, this governing body will be able to issue direct orders, so instead of an advisory role, the FDPIC will have the role of an enforcement body.

Also, the new DPA provides fines for the controllers and processors who will fail in compliance up to CHF 250.000 which in comparison to the fine amounts provided under GDPR is insignificant. The body responsible for issuing fines is awarded to the Cantonal law enforcement authorities, who do not have expertise in data protection.

What should companies do to comply with the new regulation?

 First, they need to revise their statements on data processing and protection and check if they comply with the new law, make the required changes or create new ones where they didn’t exist in the first place. 

Next, they should identify their data processors, i.e. to whom they allow access to their own personal data, and bring contracts for data processing in place. Where these contracts already exist, they should be checked if they comply with the new regulation.

Hire Data protection advisors who have expertise in this field. Even though Swiss companies are not obliged by law to do so, this step can significantly make the complicated process of implementing the new law easier and faster.  

Introducing their employees to the new regulations, especially those who will have access to personal data is probably the most important step to strengthening their data processing practices.

Finally, all companies should implement a process for identification, analysis, reporting, and handling of possible security breaches.

Établir une SARL en Suisse en 2022 : exigences du droit des sociétés

L’une des structures commerciales suisses les plus choisies est la Gesellschaft mit beschränkter Haftung (GmbH) ou la Société à Responsabilité Limitée (SARL), une combinaison d’une société anonyme et d’une société de personnes. La loi impose des exigences spécifiques pour réussir à créer une telle entité (art. 772-827 CO).

En Suisse, les entreprises sont régies par le droit fédéral, tel qu’il est énoncé dans le “Code des obligations”. Une entreprise peut acquérir le statut de SARL suisse sous certaines conditions qui varient d’un canton suisse à l’autre.

Les exigences, les procédures et le régime fiscal peuvent également différer en fonction de facteurs spécifiques : la forme juridique de l’entreprise et le canton où la société a été enregistrée.

Une SARL est une société commerciale dotée d’une personnalité juridique propre et d’un faible capital de départ. Elle constitue un excellent choix pour les petites et moyennes entreprises car elle est relativement facile à constituer, à gérer et à exploiter. Il y a plus de 207’000 entités SARL enregistrées en Suisse.

Informations générales

Pour être dûment constituée, une SARL doit être inscrite au registre du commerce du lieu où elle a son siège (art. 778 CO). L’acte de fondation qui crée la société doit être notariée. Les fondateurs doivent déclarer la constitution par un acte officiel, établir les statuts, convoquer l’assemblée des associés, désigner les organes de gestion (art. 777 I CO).

Il doit y avoir au moins un actionnaire, il n’y a pas de nombre maximum, et chaque actionnaire doit détenir au minimum une action. Les actions peuvent généralement être transférées librement ; un accord écrit entre les parties concernées suffit pour effectuer le transfert.

Le capital social doit s’élever à 20’000 francs suisses au moins (art. 773 CO), et il doit être apporté sous forme d’espèces ou en nature. Contrairement aux dispositions du droit antérieur régissant les SARL, il n’y a pas de limite supérieure pour le capital social. L’apport le plus bas par associé, qu’il soit en espèces ou en nature, s’élève à 100 CHF (art. 774 CO).


Dans le cas d’une SARL, la société est entièrement responsable de ses dettes. Les actionnaires ne sont généralement pas responsables des dettes ou des engagements de la société, à l’exception du paiement du prix de l’action, et au cas où il y aurait une obligation d’effectuer un paiement supplémentaire ou de fournir un service auxiliaire inscrit dans les statuts.

Cette obligation est destinée à couvrir les pertes du bilan afin de permettre à la société de poursuivre son activité. Le montant total des versements complémentaires ne doit pas dépasser le double de la valeur nominale de l’action détenue par un actionnaire individuel (art. 795 CO).

Système comptable

L’un des avantages importants de la création d’une SARL en Suisse est le système fiscal attractif auquel elle sera soumise. La Suisse offre actuellement l’un des taux d’imposition les plus bas d’Europe.

Les entreprises suisses sont soumises à l’impôt leurs bénéfices imposables générés en Suisse. Les entreprises sont imposées à trois niveaux : fédéral, cantonal et communal.

En Suisse, le taux de l’impôt fédéral direct sur le revenu des sociétés est fixé à un taux fixe de 8,5 %. Toutefois, étant donné que les paiements d’impôts déductibles sont autorisés, le taux de l’impôt fédéral sur le revenu peut être abaissé à 7,8 %. Pour l’émission d’actions d’une valeur supérieure à 250’000 CHF, un droit d’apport de 1% sera prélevé.

En outre, si la société holding détient 20% du capital social d’une autre société, elle peut également bénéficier d’un taux d’imposition réduit sur les sociétés au niveau fédéral.

En plus de l’impôt fédéral direct sur le revenu des sociétés, chaque canton a sa propre loi fiscale et prélève des impôts cantonaux et communaux sur le revenu et le capital des sociétés à des taux différents. En règle générale, le taux d’imposition effectif combiné se situe entre 12 % et 24 % pour les sociétés soumises à l’impôt ordinaire, en fonction de la résidence de la société en Suisse.

Les SARL qui dépassent deux des seuils mentionnés ci-dessous pendant deux années fiscales consécutives seront soumises à un contrôle ordinaire (art. 727 CO) :

  • Un bilan de plus de 20 millions de CHF
  • Un chiffre d’affaires supérieur à CHF 40 millions
  • Nombre d’employés : 250

Les entreprises publiques et les entreprises qui ont l’obligation d’établir des comptes consolidés doivent également procéder à un contrôle ordinaire.

Selon le droit suisse, une SARL doit faire appel à un réviseur agréé par l’Etat pour un contrôle restreint (art. 727a I CO). Toutefois, les entités qui emploient jusqu’à dix personnes à plein temps en moyenne annuelle peuvent être dispensées de procéder à un contrôle externe annuel. (art. 727a II CO).

L’assemblée des actionnaires

L’assemblée des associés représente le noyau de la SARL. Les compétences de l’assemblée des associés sont les suivantes

  • Adopter et modifier les statuts ;
  • nommer ou révoquer les gérants ;
  • approuver le compte de résultat annuel et le bilan et la distribution des dividendes ;
  • décider de l’utilisation des bénéfices
  • voter la décharge de responsabilité des administrateurs ;
  • réviser la gestion.

Retrait, transmission

La cession d’un apport en capital dans une SARL doit être confirmée par écrit (art. 785 CO). En outre, elle doit être accompagnée de l’approbation de l’assemblée des associés. Pour que la cession soit définitive, il faut qu’au moins deux tiers des associés y consentent (art. 786 et 808b I. n°4 CO).

La cession du patrimoine ou de l’activité d’une SARL est encadrée par les dispositions de la loi sur la fusion (art. 181 IV CO). En cas de transfert des rapports de travail, l’art. 333 CO est applicable.

La raison sociale choisie peut être conservée pour une durée illimitée. En cas de société de personnes, le changement d’associés n’a pas d’incidence sur la raison sociale (art. 954 CO).

En conclusion

Une société à responsabilité limitée (SARL) ou une société à responsabilité limitée (Sàrl) suisse présente de nombreux avantages tels que le régime fiscal, l’environnement favorable aux affaires et la situation géographique. Ces avantages clés ont fait de la SARL suisse un véhicule d’entreprise populaire pour les propriétaires d’entreprises locaux et étrangers.

Nos avocats sont à votre disposition pour toute question relative à la SARL.

What do Swiss Businesses Need to Know About the New Data Protection Act?

As a result of the new Swiss Federal Act on Data Protection (“FADP”), major aspects of the processing of personal data will be altered beginning in 2022. On September 1, 2023, firms will be required to adhere to stronger regulations, and they will need to adjust their current standards and data protection declarations to meet those requirements.

What does the new FADP entail, exactly?

It’s important, first and foremost, that the Data Protection Act be updated to reflect the rapidly evolving technical and social environment (such as the rise of big data, social media, and the Internet of Things), as follows: The goal is to increase the capacity of the individual to make decisions on their own data. It will also be updated to comply with European privacy laws: Swiss data protection standards must be upheld for data transfers between Switzerland and the EU to continue to be uncomplicated in the future, according to the goal of this law.

Is there a reason why the revision is so crucial?

For Swiss businesses, if the EU Commission no longer acknowledged that Switzerland’s level of privacy is adequate, the interchange of data with EU businesses would become more complex, placing them at a competitive disadvantage.

How soon will the new FADP come into force?

As of September 1, 2023, both the new FADP and a related Ordinance to the FADP will come into effect simultaneously.

When will businesses be required to comply with the new data protection laws?

The updated FADP came into effect on January 1, 2014.

What are the relevant transition periods?

In the revised FADP, there are no transition periods for new members. The consequences for failing to comply with FADP requirements by this deadline are as follows:

  • The amended FADP gives the FDPIC more authority to enforce it. On its initiative, or after being notified, it may open an investigation into an organization and, in cases of violations of data protection laws, drastic mandate steps such as adjusting or suspending data processing or even removing files entirely if necessary.
  • Additional civil law remedies are available to data subjects under the updated FADP. As part of a series of reforms to the Civil Procedure Code, judicial procedures must be free of charge.

In the worst-case situation, how much can a corporation anticipate to pay in penalties for breaking the updated FADP?

Private people may be penalized up to CHF 250,000 if they intentionally infringe the new FADP, such as violations of responsibilities to disclose information, collaborate, or exercise duties of care. There is a maximum punishment of up to CHF 50,000 that may be imposed on corporations if it is impossible to identify the culprits, and no fine of more than CHF 50,000 can be imposed on such individuals.

The GDPR, on the other hand, does not penalize people but imposes far larger penalties on corporations.

What are the most important changes?

When it comes to data protection, the FADP now only protects the data of individuals, as opposed to the data belonging to organizations, as was previously the case.

Genetic and biometric data are now considered highly sensitive.

Improved transparency:  Businesses are now required to disclose information in greater detail than previously. Not only is it necessary to notify individuals about the gathering of highly sensitive data, but it is also necessary to do so when data is gathered from third parties, such as public databases or publicly available sources. In addition to revealing the data controller’s name and contact information, it is necessary to reveal the aim of the processing, the recipients or groups of recipients, and, if the data is exported, the country to which it will be sent. The updated FADP is much tougher than the GDPR in this regard.

Companies must retain a list of processing activities with the necessary information, although they are no longer needed to keep a list of data acquisitions. List of processing operations. It is recommended to connect these directories effectively, especially if the same program or database is used for many data processing tasks. The Federal Council may make exceptions for enterprises with fewer than 250 workers. As of right now, there is no official word on when the new regulation will be put into effect.

An adequate assessment of the data processing on personal or basic rights of the data subjects is now required by law for all companies. Data protection impact assessments are now mandatory for all companies. This must be recorded, and it must be done in writing.

Profiling: Automated data processing may also be used to analyze personal features like an individual’s health, interests, behavior, and location. The new FADP additionally controls profiling. The amended FADP, in contrast to the GDPR, does not impose a general need to get permission. Only in the case of the very high-risk profile is such a requirement enforced.

Data security breaches, such as accidental or unlawful loss, deletion, destruction, alteration, or unauthorized access to personal data, must now be reported quickly to the FDPIC (within 72 hours under the GDPR)). In general, the controller is obligated to notify the data subject if doing so is essential for the data subject’s safety or if the FDPIC so requests.

Designing apps with data protection in mind from the outset means that organizations must not rely on default privacy settings to get users’ agreement for processing that isn’t strictly essential; this is known as privacy-by-design and privacy-by-default.

What exactly do the acronyms stand for?

The Swiss Data Protection Act (FADP) is an example of federal law (Federal Act on Data Protection). The new Data Protection Act is referred to as the amended FADP in the revised FADP.

The ordinance of the Federal Council pertaining to the FADP is known as OFADP. It includes all of the specifics for putting the plan into action. An updated law has yet to be published in full. On June 23, 2021, the Federal Council issued the proposed ordinance for public comment.

The General Data Protection Regulation (GDPR) of April 27, 2016, is the European Union’s law. Since May 25, 2018, it has been immediately applicable to all European Union member states. Even though this is a European rule, specific constraints apply to Swiss businesses when implementing it.

What remains unchanged?

Because of this, the amended FADP does not fundamentally alter the way data is handled in the same way as GDPR does. As in the past, and in contrast to the GDPR, private firms are not obliged to get permission or other justification for processing personal data, provided:

  • Compliance with data protection and privacy laws is ensured by the use of open data processing principles such as accordance with the information duties, the connection to a specified purpose, proportionality, and the protection of personal data.
  • No objections have been raised by the individual whose data is being processed.
  • Furthermore, no highly sensitive personal data (intended for use by third parties) is shared.

Only the processing of especially sensitive personal data and the use of high-risk profiling necessitates obtaining the user’s explicit permission.

Do foreign companies also need to comply with the new law?

Does the new FADP follow the “effects doctrine” when it comes to the geographic area of application? Yes. If you’re a foreign company operating in the Swiss market or if your data processing influences the Swiss market, the GDPR applies to you as well.

If they frequently handle a considerable amount of personal data in Switzerland in connection with product or service offerings or monitor the behavior and if the processing represents a high risk for data subjects, enterprises with foreign offices must appoint a representative in Switzerland.

The FADP, on the other hand, mandates the appointment of a data protection officer for all Swiss enterprises that handle the personal data of EU citizens. Regardless of the level of threat.

Which companies are at a higher risk of breaching the new FADP?

Among them are organizations that handle a large quantity or especially sensitive personal data, conduct profiling, manage webshops or produce automated individual judgments, or transmit personal data overseas (outside the EU).

How much time will it take for business owners to implement the full overhaul of the FADP?

A company’s level of effort will depend on whether or not its operations make it a target of the new advances and how well it has already adapted. GDPR-compliant companies will need to make little or no changes. Companies that solely do business in Switzerland, on the other hand, should immediately begin a gap analysis.

Is it now mandatory for every business to have a data protection advisor on staff?

According to GDPR, a data protection adviser is not required, but several advantages do so. This adviser serves as the primary point of contact for workers, customers, and government agencies when it comes to data security problems. For high-risk data protection impact assessments, obligatory consultation of the FDPIC is not necessary if a data protection expert is engaged.

Does every company now have to appoint or hire a data protection advisor?

Whether or whether a corporation has a legal department or a data protection officer who meets the requirements of the old FADP is a factor to consider. In the absence of that, we highly urge getting outside assistance.”

What will a business have to do starting in 2022 to comply with the new data protection regulations?

  • Personalize online and promotional and commercial agreements’ privacy policies by reviewing and modifying them.
  • Organize and revise internal procedures for data processing
  • Set up a computer system for processing data.
  • Implement a mechanism that guarantees that data subject rights are processed promptly (e.g., requests for information or deletion)

When there is a data breach, notify affected parties

If you’re using new, high-risk processing technologies or processing highly sensitive data on a large scale, you should do a data protection impact assessment beforehand.

Third-party contracts for data processing should be examined. A notification obligation should be included in the case of a data breach or when data is transferred to subcontractors. Specifically, Data security must also be maintained by the responsible party.

As soon as it is no longer important to handle personal data, make sure it is deleted or anonymized.

To guarantee that personal data is only released in countries with proper protection, specify which countries will get the data. Storage on foreign systems is likewise affected by this rule (cloud). A comparable list is published by the Federal Council (previously the FDPIC). However, data may still be sent to countries that aren’t included on this list that can’t export data.

Provide suitable technological and organizational safeguards to ensure the protection of sensitive data. A breach of security should be prevented at all costs. Right now, the Federal Council has not determined what the bare minimum is. Email encryption should be provided for sensitive personal data since data transfer through email is unsafe.

It’s important to ensure data portability when handled electronically, particularly when directly related to concluding or carrying out a contract comparable to the GDPR.

Notification of the FDPIC of a data protection adviser (data protection officer) appointment. The contact information for this adviser must be made public. The GDPR, on the other hand, makes it essential to notify a data protection officer.

Le processus d’achat de biens immobiliers en Suisse

Ce qu’il faut savoir pour acheter en Suisse

L’achat d’une maison peut parfois être une expérience stressante. Si la propriété est située dans un pays étranger, ceci peut être accentué davantage. Il peut être difficile pour les étrangers qui s’installent en Suisse de comprendre le marché immobilier suisse. Les lois sur l’acquisition de propriété par les étrangers et les réglementations hypothécaires suisses peuvent faire perdre son sang-froid à n’importe quelle acheteur. En lisant ce guide, vous trouverez des informations sur le processus et les conditions d’achat d’une propriété en Suisse, que vous soyez un étranger ou un citoyen suisse.

Le Notaire

Lorsque vous avez convenu d’acheter une maison, vous devez d’abord engager un notaire. Le notaire doit être enregistré dans le canton où se trouve la propriété afin de représenter à la fois le vendeur et l’acheteur.

Il est courant qu’un agent commercial ou un promoteur recommande un notaire efficace et maîtrisant l’anglais. Le notaire est souvent choisi en raison de sa familiarité avec les documents administratifs d’une transaction antérieure.

Le Permis étranger

La tâche la plus importante du notaire est d’obtenir le permis des acheteurs pour les non-citoyens. Dans certaines stations de ski, la commune locale refuse de fournir des permis aux étrangers pour l’achat de la propriété. À Zermatt, les étrangers doivent obtenir une autorisation pour acheter une résidence secondaire, alors qu’à Verbier, ils sont libres de le faire. Si l’étranger est citoyen d’un pays de l’UE, il peut acheter une propriété à Zermatt s’il est résident suisse. Ce n’est pas simple !

Les permis pour étrangers sont de deux sortes : généraux et spécifiques.

Un permis général “conditionnel” doit être obtenu si le projet est nouveau. Dans la plupart des cas, un permis de résidence secondaire permettrait de vendre 15 des nouveaux appartements à des étrangers sur un total de 20.

Ensuite, il faudra une autorisation spéciale pour vendre l’unité X à l’acheteur Y. Le notaire ne doit demander une autorisation particulière que si un étranger détient déjà la propriété. Les cantons fournissent les autorisations, mais la Confédération doit également les autoriser à Berne avant qu’elles puissent être mises en œuvre.

Autres documents

L’architecte doit diviser le titre de propriété en titres distincts pour chaque unité lors de la construction d’une nouvelle structure ou de la transformation d’une propriété ou d’un hôtel existant en plusieurs propriétés. Il rédigera un contrat qui précise la part des dépenses totales de l’immeuble que chaque unité doit payer et la manière dont les propriétaires et l’administrateur de l’immeuble collaboreront.

Ce document est appelé PPE dans les régions francophones et SWTE dans les régions germanophones. L’établissement et l’enregistrement de ces documents peuvent prendre des semaines, voire des mois. Dès que ces documents ont été complétés et enregistrés, le notaire peut demander le permis général et le permis particulier en même temps afin d’accélérer le processus.

Le notaire demandera une copie du passeport de l’acheteur et des informations sur le formulaire de demande de permis d’étranger.

Accord de réservation

Il se peut que l’on vous demande de signer un accord de réservation et de verser un dépôt si vous achetez une propriété à un promoteur. Vous devrez souvent payer à une agence ou à un concessionnaire, car le notaire n’est pas autorisé à percevoir un dépôt avant l’arrivée de votre permis d’étranger.

Seules les propriétés dont la surface habitable nette est inférieure à 200 mètres carrés et dont la surface totale du terrain est inférieure à 1 000 mètres carrés peuvent être vendues à des étrangers. Une “Bestätigung”, un certificat attestant que la propriété est conforme à la réglementation sur les m2, peut être exigée même si un étranger en est déjà titulaire.

Si le bien est particulièrement grand, construit de toutes pièces ou transformé en hôtel, le notaire peut également exiger que le vendeur et l’acheteur signent les plans. Les parties signeront également une description technique décrivant le niveau de finition inclus dans le prix de vente s’il s’agit d’une nouvelle construction ou d’une rénovation récente.

Le Prêt hypothécaire

Votre hypothèque doit être complétée pendant que vous attendez l’autorisation de l’étranger. Les banques suisses ont des exigences et des processus de prêt uniques, vous devez donc vérifier au préalable quelles sont les exigences particulières.

Maintenant que vous avez obtenu un prêt hypothécaire, il est temps de signer les documents. Dans certaines banques cantonales et petites banques suisses, l’emprunteur doit signer tous les documents en personne. Plusieurs banques étrangères vous permettent de signer en personne ou même en ligne, selon l’endroit où vous vous trouvez dans le monde.

L’Acte de vente

Vous avez 30 jours pour signer l’acte de vente du notaire, une fois que celui-ci a obtenu l’autorisation appropriée pour les étrangers. Le notaire doit demander un nouveau permis si l’acte de vente n’est pas signé dans ce délai. L’acheteur peut verser le dépôt et les paiements échelonnés au notaire après avoir reçu le contingent de nouvelle construction.

L’acte de vente doit être rempli en personne devant un notaire ; toutefois, les vendeurs et les acheteurs peuvent désormais signer par voie électronique plutôt qu’en personne.

La Date d’achèvement

Les parties peuvent convenir d’une date d'”achèvement”, qui peut être celle du paiement intégral par l’acheteur ou celle de l’achèvement de la propriété dans le cas d’une nouvelle construction ou d’une rénovation. Si vous achetez un bien d’occasion, il est courant que le contrat de vente stipule que le paiement du solde doit être effectué dans les 30 jours suivant sa signature.


Le vendeur doit fournir un certificat d’électricien attestant que le système électrique a été évalué et autorisé avant de vous vendre un bien de revente de plus de 20 ans. Les vendeurs en Suisse ont des exigences et des garanties légales supplémentaires liées à la dissimulation intentionnelle de défauts.

Clés et argent

Les vendeurs et les acheteurs pensent généralement que l’affaire est “terminée” lorsque les clés sont remises à l’autre partie. Pour les acheteurs et les vendeurs non suisses, ce n’est pas toujours le cas dans le pays.

Si l’acheteur est un étranger, la Confédération (Berne) dispose de 30 jours pour faire appel à l’autorisation du canton. Ainsi, tant que le délai de 30 jours n’est pas écoulé et que le changement de propriétaire n’a pas été inscrit au registre foncier, la transaction n’est pas “terminée”. Les autorités cantonales gèrent de nombreux registres fonciers, et l’enregistrement d’un changement de propriétaire peut prendre des semaines. En Valais, le délai de traitement est actuellement de six à huit semaines.

Le vendeur acceptera souvent de remettre les clés de la propriété une fois que l’acheteur aura payé la totalité du prix, car ces deux étapes ne sont que des formalités.

Si le vendeur est étranger, il y a un délai pour recevoir l’argent d’une transaction en raison de toutes les formalités légales (si l’acheteur est étranger). Afin de garantir le paiement de tous les impôts en souffrance, le notaire retiendra 5 % des bénéfices de la vente, même après le transfert de propriété enregistré. Il libérera les derniers 5% après s’être assuré que tout a été payé.

Que faut-il savoir d’autre ?

En outre, n’oubliez pas que la date de vente enregistrée dans le registre foncier correspondra au jour de la signature de l’acte de vente, et non à la date de vente de la propriété (et non plus à la date de traitement par le registre foncier). Si vous décidez un jour de revendre le logement, ce sera une considération essentielle car, dans le canton du Valais, un vendeur étranger ne peut le faire avant d’avoir détenu le bien pendant cinq ans.

Une demande d’autorisation spéciale auprès du notaire pour vendre votre bien avant la limite des cinq ans peut être faite. En cas de faillite, de divorce ou de maladie, elle vous sera accordée, mais vous ne pourrez pas le revendre à profit.

The Real Estate Purchase Process in Switzerland

What you need to know about purchasing in Switzerland

Buying a home may be a stressful experience at times. If the property is located in a foreign country, this might be emphasized even more. It might be difficult for foreigners relocating to Switzerland to understand the Swiss property market. Foreign ownership laws and Swiss mortgage regulations might lead anybody to lose their cool. You may learn how to purchase property in Switzerland whether you are an expat or a Swiss citizen by reading this guide.

The Notary

When you’ve agreed to purchase a house, you’ll first need to hire a notary public. The notary must be registered in the canton where the property is located in order to represent both the seller and the buyer.

It is common for a sales agent or developer to recommend a notary who is both efficient and proficient in English as part of their service. The notary is often picked because of their familiarity with the paperwork from a prior transaction.

The Foreigner Permit

The notary’s most critical job is securing a buyer’s permission for non-citizens. In certain resorts, the local commune refuses to provide any licenses for foreigners to purchase the property. In Zermatt, foreigners must get permission to purchase a second property, whereas, in Verbier, they are free to do so. If the foreigner is a citizen of an EU country, they may be entitled to purchase property in Zermatt if they are a Swiss resident. It isn’t straightforward!

Foreigner permits come in two flavors: general and specific.

A “contingent” general permission must be obtained if the project is new. In most cases, a second-home permit would allow for 15 of the new flats to be sold to foreigners out of a possible 20.

Afterward, they’ll require special permission to sell unit X to buyer Y. The notary only has to apply for a particular permission if a foreigner already holds the property. The cantons provide the licenses, but the Federal government must also authorize them in Bern before they can be implemented.

Other Documents

The architect must split the legal title into distinct titles for each unit when building a new structure or converting an existing property or hotel into several properties. They’ll draft a contract that specifies how much of the total building’s expenses each unit is responsible for paying and how the building’s owners and administrator will collaborate.

This document is referred to as a PPE in French-speaking areas and an SWTE in German-speaking areas. It might take weeks or even months to complete and register these papers. As soon as this has been completed and registered, the notary may apply for both the general and particular permits at the same time in order to expedite the process.

The notary will want a copy of the buyer’s passport and information from them on the foreigner application form.

Agreement for Reservation

You may be asked to sign a reservation agreement and pay a deposit if you purchase a property from a developer. You’ll often have to pay to an agency or a dealer since the notary isn’t allowed to collect a deposit until your foreigner permission arrives.

Only properties less than 200 square meters in net livable area and less than 1,000 square meters in the total land area are allowed to be sold to foreigners. A “Bestatigung,” a certification that the property conforms with the m2 regulations, may be required even if a foreigner already holds it.

If the property is particularly large, built from scratch, or converted into a hotel, the notary may also require the seller and buyer to sign the drawings. The parties will also sign a technical description outlining the grade of finishing included in the selling price if the home is new construction or recently refurbished.

The Mortgage

Your mortgage should be completed while you are awaiting the foreigner’s permission. Swiss banks have unique lending requirements and processes, so you need to check beforehand what are the particular requirements.

Now that you’ve secured a mortgage, it’s time to sign the paperwork. In certain cantonal and smaller Swiss banks, the borrower must sign all of the paperwork in person. Several foreign banks enable you to sign in person or even online, depending on where you are in the world.

The Deed of Sale

You have 30 days to sign the notary’s sales deed once the notary obtains the appropriate foreigner permission. The notary must apply for a fresh permit if it is not signed within that time frame. The buyer may pay the deposit and stage payments to the notary after the contingent for new construction has been received.

The sale deed must be completed in person before a notary; however, sellers and buyers may now sign electronically instead of in person. 

The Completion Date 

The parties can agree on a “completion” date, which might be when the buyer has paid in full or when the property has been completed in the event of a new construction or renovation. If you’re buying anything used, it’s common for the sales contract to stipulate that payment for the remaining amount must be made within 30 days of signing it.


The seller must give an electrician’s certificate that the electrical system has been evaluated and authorized before selling you a resale property older than 20 years. Sellers in Switzerland have additional legal requirements and assurances related to the willful concealing of faults.

Keys and Money

Vendors and purchasers commonly think that the deal is “finished” when the keys are handed over to each other. For non-Swiss buyers and sellers alike, this isn’t always the case in the country.

If the buyer is a foreigner, the Federal government (Bern) has 30 days to appeal to the canton’s permission. So, until the 30-day time has ended and the change of ownership has been recorded in the land registry, the transaction has not “finished.” The cantonal authorities manage many land registries, and it can take weeks to register a change of ownership. Valais currently needs six to eight weeks to process.

The seller will frequently agree to give over the keys to the property once the buyer has paid in full since these two stages are only formalities.

There is a delay in receiving money from a transaction if the seller is a foreigner because of all the legal paperwork (if the buyer is a foreigner). To guarantee that any outstanding taxes are paid, the notary will hold 5% of the selling profits even after the recorded property transfer. They’ll release the last 5% after they’re satisfied that everything has been paid.

What Else Would You Like to Know?

Additionally, keep in mind that the date of sale recorded in the Land Registry will reflect the day the sales deed was signed, not the date the property was sold (not the date the land Register processes it). If you ever decide to resell the home, this will be an essential consideration since, in Canton Valais, a foreign seller cannot do so until they have held the property for five years.

An application for special approval from the notary to sell your property before the five-year limit may be made. In the event of bankruptcy, divorce, or illness, you will be granted this, but you will not be allowed to resell it for a profit.

Company Types in Switzerland

What are the main forms of business types? What are the advantages and disadvantages of each company type?

The following are the two most common types of business vehicles in Switzerland:

  • Limited liability company
  • Corporation with limited liability

For each of these two types of organizations, the legal name and membership structure are different from each other. The LLC is better suited to small businesses because it doesn’t need as much money, has more control over how the company runs and must do certain things (like making sure all shareholders’ names are made public in the commercial register).

There are times when other legal entities, like businesses, may be used as commercial vehicles.

  • Cooperative is a concept that refers to non-profit organizations that directly benefit its members.
  • The word “association” is appropriate for non-commercial professional groupings.
  • A partnership limited by shares differs from a corporation limited by shares in that at least one shareholder is jointly and severally responsible to creditors in a partnership limited by shares.
  • A foundation is a legal body that has no members but may have beneficiaries for philanthropic reasons.

The following are examples of unincorporated businesses:

  • Ownership by an individual
  • Simple partnership
  • Partnership in general
  • Partnership with a limit

With the exception of the sole proprietorship, these entities are seldom employed in business since all or at least part of the members are personally liable. Swiss law forbids a limited partnership in which the general partner is a corporation.

Establishing a Presence from Abroad

While a foreign firm may form a joint venture with a Swiss company, purchase an existing Swiss company, or form a partnership to do business in Switzerland, the following are the most prevalent options:

  • Establishing a local branch.
  • Creating a subsidiary corporation.

Local Branch

A Swiss branch office is a business facility that performs the same functions as the parent company’s headquarters while maintaining economic and commercial autonomy. The branch lacks its own legal existence and is wholly reliant on the parent company. As a result, the parent company is liable for all obligations and penalties incurred by the Swiss branch office. The branch office and its chosen authorized representatives, who must be registered in the business registration, are subject to Swiss law. Switzerland must have at least one single signature authority representative or two joint signature authority representatives at all times, or both of them.

Subsidiary Company

A Swiss subsidiary company is a legal entity subject to Swiss jurisdiction and controlled by Swiss law. The foreign parent firm often owns the majority of the shares in the subsidiary business and has managerial control over it. While the Swiss subsidiary firm is legally separate from the foreign parent business, its commercial and economic independence vary. For the most part, the foreign parent company is not responsible for the Swiss subsidiary’s debts or promises to pay.

The two most popular legal kinds of subsidiaries in Switzerland are corporations limited by shares and limited liability firms (LLCs). The required minimum capital in Swiss currency (CHF 100,000 for limited liability corporations and CHF 20,000 for limited liability partnerships) must be invested in the firm at the time of formation. When these businesses are registered under commercial registration, they get legal personality. At least one authorized representative with a single signature or two authorized representatives with joint signatures must reside in Switzerland and be registered with the business registry. Third-party shares (in a business limited by shares) or quotas may be issued or transferred (in an LLC). Another way for a limited liability subsidiary company to become public is to put its stock on a stock market.


Compared to subsidiaries, local branches offer the following advantages:

  • Swiss corporate income tax on earnings and yearly capital tax on taxable stock apply to Swiss branches and subsidiaries. However, profits returned to headquarters from branch offices are free from Swiss withholding tax.
  • The process of launching a branch office may be simpler and more cost-effective. Compared to a subsidiary company, branch offices dissolve more quickly in liquidation and have lower operating costs (like fees to register changes to the commercial register), which makes them cheaper to run.
  • Local branches are not obliged by law to have a certain amount of corporate capital.
  • If you’re only going to be in Switzerland for a short time and you don’t know what the future holds when you start a business, branch offices are better than subsidiary businesses.

The following are some of the benefits of having a subsidiary firm rather than a local branch:

  • Branches are immediately impacted by the bankruptcy or insolvency of the principal foreign business since they are an integral element of the foreign principal firm’s activities and depend on it.
  • Customers in Switzerland can choose to work with a local subsidiary instead of a global company (branch office).

Branch offices sometimes fall short when it comes to the parent company’s non-responsibility for the subsidiary company’s duties and pledges.

Except in the event of a regulated organization (such as a Swiss firm operating in the same industry), a foreign corporation may normally trade without acquiring a license in Switzerland. Trading can be conducted cross-border (via postal services, telecommunications, and occasional business travel to Switzerland), through the establishment of a representative or branch office in Switzerland, or through collaboration with a Swiss individual or legal entity acting as an agent, distributor, franchisee, or similar. The immigration legislation, which restricts the number of days foreigners may remain in Switzerland each year without acquiring a residency or work visa, may generate practical complications. 

If a foreign firm does business in Switzerland via a local branch, the branch must be registered with the commercial register.

General Partnerships

General partnerships, which must have at least two partners, are governed by articles 552 to 593 of the Swiss Code of Obligation (CO) (natural persons). After the parties sign a partnership agreement, the general partnership is formed. It is required to register with commercial registration (it is constitutive for businesses pursuing non-commercial aims and declaratory for businesses pursuing commercial aims). A general partnership has no minimum capital requirement.

A general partnership seems to be legally distinct. It may thus acquire rights, take on obligations, bring litigation, and be sued in its own name. The assets are held by the partners jointly. Any obligations taken on in the partnership’s name by the controlling partner, as well as any tortious conduct performed by a partner while performing partnership activities, are the responsibility of the partnership. The partners are jointly and severally accountable for the partnership’s commitments to third parties. A partner’s assets, on the other hand, are only held responsible in a secondary capacity (after the partnership’s assets have been exhausted). Individuals who join a general partnership after it has been created are jointly and severally responsible with their whole assets for the firm’s existing obligations. Creditors have five years from the date of dissolution to make claims against the partnership. The individual partnership agreement governs internal responsibility.

For tax reasons, the partnership is deemed transparent. Individual partners, on the other hand, are responsible for paying taxes on their portion of the partnership’s revenue and assets, as well as any additional sources of income and assets.

Limited Partnerships

Articles 594 to 619 of the CO regulate limited partnerships. Limited partnerships, like general partnerships, have quasi-legal personalities, are required to register with the commercial register (which is constitutive for non-commercial organizations and declaratory for commercial enterprises), and do not have a minimum capital requirement. Limited partnerships, unlike general partnerships, may incorporate legal entities as partners (but only as limited partners). Two partners are required, with at least one of them being a natural person with unlimited liability. The responsibility of the other partners is restricted to the amount specified in the business registration. If the restriction of responsibility is not written down in the business register, the “limited” partner is responsible for everything unless the partner can show that the third parties knew about the restriction of responsibility.

Joint ventures

In Switzerland, international joint ventures (JVs) are prevalent and may assume a number of legal forms. The stages involved in forming a JV differ depending on the legal structure chosen. Contractual joint ventures, for example, may be created via the execution of one or more agreements between existing legal entities; corporate joint ventures, on the other hand, need the formation of a new company. Additionally, agreements are often used in corporate joint ventures to define the enterprise’s governance.


Swiss law doesn’t allow trusts to be set up. In some cases, though, different legal methods may all lead to the same thing.

When the HCCH Convention on Trust Law and Recognition was signed in 1985, Swiss people agreed to sign it in 2007. For this reason, Swiss courts usually accept the results of trusts set up properly under a foreign law that the settlor named in the trust instrument.

Forming a Private Company

Regulatory Framework

A corporation limited by shares (SA) and a limited liability company (LLC) are both legal entities with distinct legal personalities. Shareholders (or quota holders in the case of an LLC) are their members, and their responsibility is limited to the registered company capital. Due to its reduced minimum capital requirement and customizable governance structure, the LLC model is preferred by several small to medium-sized firms. A limited liability company’s disclosure requirements are more stringent than those of a corporation limited by shares. 

The name of the quotaholder, in particular, is recorded in the corporate registry and therefore accessible to the general public. A limited liability company (LLC) must have a minimum capital of CHF 20,000 (payable in full at the time of establishment), whereas a company limited by shares must have a minimum capital of CHF 100,000 (of which at least CHF 50,000 must initially be paid up).

The commercial registration authority of the canton in which the firm will be registered is the competent authority for the formation of a company limited by shares or LLC.

Licensing of Reviewing Bodies Under the Financial Services Act – An Initial Assessment


From January 1, 2020, FinSA (together with FinSO) implemented a new prospectus regime for Swiss capital markets, including specific statutory requirements, applicable to all financial instruments (subject to exemptions and customizations for certain financial instruments), under which

(i) any individual in Switzerland who makes a public offer to purchase securities or

(ii) any person seeking the admission of securities to trading on a Swiss trading venue must first publish a prospectus (article 35(1) FinSA).

Perhaps most significantly, and in contrast to the previous system, any such prospectus has to be submitted to a Reviewing Body for approval before publication (i.e., ex-ante prospectus approval) (article 51(1) FinSA). Notably, prospectus approval may be requested for qualifying debt instruments after the prospectus is published (i.e., ex-post prospectus approval).

BX Swiss AG (BX Swiss) and SIX Exchange Regulation AG (SIX Exchange Regulation) stated on May 28, 2020, that they had received clearance from FINMA to function as Reviewing Bodies under FinSA beginning on June 1, 2020. As a result, the prospectus review offices at SIX Exchange Regulation and BX Swiss accept prospectus review and/or deposit applications by FinSA.

According to FinSO, when a public offer or a request for admission to trade on a trading venue is submitted, the need to publish a FinSA approved prospectus will only take effect on December 1, 2020 (i.e., six months after the Reviewing Bodies were licensed by FINMA, article 108(1) FinSO). Therefore, until December 1, 2020, issuers may continue to comply with the former system, in which a so-called offering and listing prospectus may be prepared in line with the Swiss Code of Obligations (CO) and/or the listing requirements of the relevant exchange (where applicable) (article 109(2) FinSO).

After the six-month transition period expires, the duty to issue a FinSA compliant prospectus will apply to all publicly offered securities in Switzerland as well as to those looking to be admitted to trading.

Following their designation as Reviewing Bodies, SIX Exchange Regulation and BX Swiss have now issued the respective rules, lists, directives, and fee schedules of their prospectus offices as anticipated by FinSA and FinSO.

Importantly, if FINMA gives a license to more than one Reviewing Body, it must guarantee adequate coordination of their activity, under article 72(5) FinSO. The prospectus review offices of BX Swiss and SIX Exchange Regulation have collaborated on a number of directives and lists.

Under the new prospectus framework imposed by FinSA and FinSO, the prospectus approval procedure and entry to trade on a Swiss trading venue are often two concurrent processes:

– FinSA prospectus approval (i.e., by a Reviewing Body such as SIX Exchange Regulation or BX Swiss, subject to exclusions and adaptations); and

– Application for trading access on the applicable trading venue (i.e., by the exchange admission body, such as SIX Exchange Regulation).

Following the implementation of the new prospectus system, the Swiss stock exchanges revised their listing regulations to allow these two procedures to run concurrently. However, and probably most importantly, parties are not required to submit a prospectus for approval to the prospectus office of the trading venue on which they are also seeking admission to trade. For example, the BX Swiss prospectus office might approve a FinSA compliant prospectus for an issuer who is also seeking admission to trade on the SIX Swiss Exchange (through the SIX Exchange Regulation application procedure) and vice versa.

This might result in some rivalry in the Swiss market between the two licensed Reviewing Bodies in terms of, among other things, speed, efficiency, and accessibility. Nonetheless, FINMA must guarantee that their processes remain coordinated (see FinSO article 72(5)).

Corporate Audit Requirements in Switzerland in 2022

Recent Legislative Changes

The Enron crisis in the United States and the accompanying regulations (particularly SOX) directly influenced Switzerland. The modified provisions in the Swiss Code of Obligations (articles 727 et seq. CO) and the new law requiring auditors to be overseen by a regulator did, in fact, significantly change the CG landscape.

An examination of CG and auditing reveals, in my opinion, both improvements (e.g., the establishment of a supervisory authority for all auditing firms in Switzerland) and shortcomings (i.e., first, the rule that the smallest corporations may opt-out of the auditing process, which was previously mandatory for all corporations; second, the introduction of mere review auditing for small corporations with a lower independence standard for the auditors; and perhaps third, the presence of a supervisory authority for all auditing firms.

Mandatory Auditing by External Auditors?

Until lately, all companies in Switzerland — except the LLC – were subject to required external audits. The pertinent Swiss laws have been modified as of 2008.

As a general rule, all firms (excluding partnerships) must be audited, regardless of their legal structure (corporation or LLC); nevertheless, three “categories of auditing” exist, including ordinary auditing, review auditing, and opting out of auditing.

Under the new laws, only bigger organizations that fulfill particular criteria or other requirements (e.g., all publicly listed companies) must undergo regular audits (article 727 CO). Smaller firms, i.e., corporations that do not fulfill the specific criteria and standards for regular audits, may choose to review auditing at a lesser quality (article 727a CO). Finally, even the tiniest businesses may “simply say no” to any auditing at all (opting out of the auditing process following article 727a para 2 CO).

Tasks and Levels of Independence

The regular auditors must evaluate and report on whether the annual accounts and the board’s suggestions for the use of balance-sheet profits correspond with the legislation and the articles of incorporation (articles 728a et seq. ); especially, the regular auditors must verify the internal control system (article 728a para 1 Alinea 3 CO). In contrast to regular auditors, review auditors have fewer duties in line with articles 729a et seq.; for instance, the internal control system is not a problem.

Auditors’ independence is always a vital and frequently complex issue for CG reasons. However, in Switzerland, the independence standards vary depending on whether a regular or review audit is performed.

Of course, all audits must be independent in general, as underlined by articles 728 para 1 CO and 729 para 1 CO. However, as an additional general rule, regular auditors (article 728 CO) must meet a higher standard of independence than review auditors (article 729 CO); the main difference between the auditing providers is that review auditors are permitted to provide bookkeeping and other services, such as legal and tax advice, to the corporations to be reviewed by them (article 729 para 2 CO).

Auditors’ Civil Liability

Article 755 CO of Swiss corporate law explicitly allows for audit liability. All persons engaged in the audit of annual accounts and consolidated financial statements, etc., i.e., involved in auditing processes, are liable to the corporation and the shareholders and creditors for all damages caused by intentional or negligent breaches of their auditing duties.

If many people are accountable for damages, they are jointly and severally liable with the others (article 759 CO). This provision seems to jeopardize auditors if a claimant concentrates on them rather than the board members because of an alleged “deep pocket hypothesis.”

As a result, the current legislative reform wants to include a new clause in Swiss corporate law to limit auditors’ obligation to the plaintiff:

The Federal Council specifically included Germany and Austria in its initial proposal (bundesrätlicher Vorentwurf), which suggested limiting caps in case of negligence of CHF 10 million for private firms and CHF 25 million for listed corporations. In my opinion, such a clause would be inconsistent with Swiss general liability laws and would not qualify as a privilege for auditors. Nonetheless, the majority of observers support such a provision.

For complete information about the Audit Law and for audit services please contact our law firm in Switzerland.