Raising funds by way of CIS in the Confederation of Switzerland is mainly regulated by CISA, FINMA-CISO (product wise) & the recently adopted FinSA (service wise). Because the country isn't an EU member, AIFMD isn’t applicable.
Meant to improve the regulation of the financial services sector in Switzerland, FinSA introduces the following legislative novelties:
- no licensing requirements for distributors qualifying as FSPs;
- replacing the concept of distribution with the concepts of ‘financial services", “supply’ & "advertising";
- harmonization of customer categorization rules;
- no requirement for the appointment of a Swiss representative to offer FCI to qualified investors.
There’s a 2-year transition period applicable to the majority of FinSA requirements. Individuals seeking to get an FSP license in the Confederation of Switzerland should keep in mind that they must ensure compliance with the corresponding provisions of the previous regime until the new rules come into effect.
PEFs that invest in the Swiss economy can create both resident & non-resident structures to raise funds. Choosing a suitable legal form for this depends on various factors, including:
- transparency of an applicable tax mechanism;
- limitations for investment-related activities;
- managers & investors’ limited liability;
- a fund’s nature.
Fundraising in the Confederation of Switzerland requires:
- creating a Swiss LP;
- registering an investment company in Switzerland;
- create any foreign legal structure.
Please keep in mind that LP is the most popular legal form with foreign investors.
Switzerland: Setting up an LP
A Swiss LP is mainly geared toward property ownership, infrastructure projects & real estate development. Opened by at least two participants, they’re based on an agreement & a prospectus.
Their minimum capital must be no less than one hundred thousand Swiss francs (full payment is required).
Establishing an LP in the Confederation of Switzerland requires participation of several GPs, whose total paid-up capital must be no less than one hundred thousand Swiss francs. Decisions related to investment & any other activities may be delegated to 3rd parties.
Investing in Swiss LPs is an activity reserved exclusively for qualified investors. To be eligible for that, they’re required to apply for a license with FINMA (an authority regulating their activities).
SICAF Registration in Switzerland
SICAFs’ main goal is to manage their own assets & refrain from engagement in business activities. Their investment-related policies, limitations & equity investments are defined in their AoA & prospectus. Those looking to establish an AG in the Confederation of Switzerland should keep that they mustn’t comply with CISA nor FINMA if its shares are listed on a Swiss stock exchange.
Establishing a Swiss LP: Publicly Available Information
An LP is to be registered in a commercial register of a canton where it’s been created. Containing information about capital, registered offices & persons entitled to sign agreements, registers can be accessed by the general public. Please note that concluding a partnership agreement in Switzerland requires getting FINMA authorization; it’s not until approval is obtained that it can be included in a commercial register & become publicly accessible.
Financial statements can be accessed by investors but aren’t available to the general public. Commercial registers must also reflect information on the capital commitments of limited partners. However, their individual commitments & names mustn’t be publicly available.
Raising funds for startups in the Confederation of Switzerland is increasingly being done through ICO. This prompted FINMA to issue guidelines according to which regulation of ICO in Switzerland is achieved. Please keep in mind that issuers of tokens might have to create a prospectus & obtain a securities dealer license in the Confederation of Switzerland.
To make CIS more attractive, the Swiss government is taking steps to launch new categories of funds which won’t be regulated by CISA or FINMA. Called L-QIFs, they’ll be aimed exclusively at qualified investors.
Seeking to establish an LP fund in Switzerland? Need advice on FDI regulation in Switzerland? Why not contact IQ Decision UK?