In this article, we will analyze the regulation of private M&A transactions in Switzerland. Acquisitions of private enterprises in Switzerland can usually be through the purchase of shares or assets.
Protectionism of Swiss companies
Switzerland has always been an open and hospitable country towards foreign investment. There are no mechanisms in place to control foreign investment and public authorities may not influence or restrict the completion of mergers or acquisitions of private Swiss firms.
However, the situation may change quite soon. The Swiss Parliament believes that Swiss companies should be better protected from hostile takeovers by foreign, primarily Chinese, investors. The parliament has recently instructed the national government to set up an appropriate supervisory and licensing body.
The legislative framework for the new licensing body is currently being worked out, which would include a comprehensive assessment of projects by "troubled" foreign investors, especially Chinese ones, in Switzerland. This body will have to intervene whenever, firstly, the investment project is in theory capable of harming national security or public order in Switzerland, and secondly, if there is no reciprocity in terms of investment terms and conditions, ie if the investor's country of origin does not offer investors from Switzerland a level playing field.
Also, factors such as sanctions against certain countries, groups or individuals that prohibit investing in Switzerland should not be discounted.
Share purchase of a Swiss company
Every year, new companies appear on the Swiss market with new products and services, and if you think that these are great products and services that did not exist before or that have huge advantages, you should ask about their promotions.
If you are a foreigner and want to buy shares of a Swiss company that are not listed on the stock exchange, then you should know about some restrictions. If the capital is large, then you are probably targeting a portfolio consisting of a large number of shares, that is, not only a variety of companies, but also the number of shares.
The purchase must be authorized by the Swiss government if:
- the consolidated assets of the target company consist of non-commercial real estate;
- the actual purpose of the legal entity is to acquire or trade in real estate;
- the legal entity has significant land reserves suitable for residential and industrial real estate, which will not be used for three years.
Agricultural real estate cannot be acquired by non-farmers.
Purchase and sale transactions of the company in Switzerland
Private acquisitions are usually the subject of negotiations between the parties involved. The offer process, as in the case of government acquisitions, does not apply. Although the Swiss Code of Obligations applies to most transaction structures, most of its relevant provisions are not binding and can be concluded.
If you are considering buying a business in Switzerland, you need to keep in mind that some transactions, such as mergers, divisions, transformations, and business transfers in this jurisdiction, must be registered in the commercial register and real estate in the land register.
We have provided a brief review of the process of buying and selling private companies in Switzerland. Regardless of the complexity, our experienced specialists offer assistance in conducting an M&A transaction in Switzerland. You can also schedule a consultation on regulating the purchase and sale of companies in Switzerland from our legal advisors. To check how we can be useful in your specific case, there's no better way to act right now: a first phone contact with a professional of ours can be decisive. Alternatively, you can fill out the form below for quick contact.