M&A transaction in Switzerland

Acquiring private companies in Switzerland is a process that consists of two stages:

• signing an agreement;
• closing a deal.

The signing of an agreement & closing of a deal can take place simultaneously if there’s no additional criteria to be met.

Requirements

Acquiring assets or stakes in a Swiss company requires getting approval from its BoD. Transferring all of its assets/stakes requires approval of an absolute majority of shareholders. Transferring limited assets may require getting government approval & signing a binding agreement between purchasers & sellers.

Transferring stakes of a private company in Switzerland requires signing a written declaration, while transferring a PLC’s shares in Switzerland may require getting approval of its BoD. Acquiring an LLC’s stakes in Switzerland requires summoning a shareholder meeting & getting approval of the majority of stakeholders. Exercising voting rights in acquired companies requires the acquirer to register in a company's register of shares. As far as LLCs are concerned, stakeholders must be registered in a commercial register.

There’s no law requiring getting government approval as far as concluding international transactions is concerned. However, in some industries specific approval may be required in order to enter into a transaction with a foreign buyer (i.e acquiring a bank in Switzerland).

Structuring

Once a deal is closed, a company’s liabilities can be transferred by way of sole or universal succession. The former requires meeting certain formalities for each class of transferred assets. Transferring patent rights, TMs or industrial designs in Switzerland requires getting a written order. In its turn, transferring real estate requires signing a written agreement that has to be registered in a land register & legalized by a notary.

Employment contracts with staff members objecting to the transfer are signed by the purchaser but terminated with a statutory notice. The seller must inform or hold consultations with the employees or their representatives prior to the transfer.

To transfer assets by way of sole succession, purchasers can also use a Swiss subsidiary.

Transferring liabilities by way of universal succession requires complying with a formal procedure. The latter provides for the registration of an agreement on asset transfer (in written form & legalized by a notary) in a commercial register. 

Once a transaction is registered in a commercial register, the transferring of assets is considered completed. Prior to registering the transaction, transferred employees must be informed on how it can potentially affect them.

Taxes

Swiss tax legislation provides for participation exemption; hence, sellers having a legal personality status will find transactions with shares more attractive from a tax point of view. Disposal of all other types of assets is taxed at regular rates.

If a company’s shares are owned by a Swiss national, capital gains from the sale of such shares aren’t taxed. If a company has certain tax incentives (e.g. capital contribution reserves that can be distributed without paying taxes), acquiring a Swiss company’s shares may be more attractive to the purchaser.

Transactions with domestic assets, including those carried out by a foreign purchaser’s Swiss subsidiaries, are subject to VAT.

Switzerland: Acquiring Banks

Acquiring banks’ assets in Switzerland is a preferred choice of purchasers; by doing so, they’re able to isolate legal risks from the remainder of a transferred business. For foreign purchasers, deals with shares are often the only viable option (unless they have a subsidiary with a banking license in Switzerland). Acquiring Swiss banks requires approval from the FINMA; acquisitions undertaken by foreign or foreign-controlled entities must receive special authorization.