SWITZERLAND Law and Practice Contributed by: Jürg Frick, Luca Dal Molin, Philippe Gobet and Carla Bertossa, Homburger
to non-qualified investors in Switzerland (see also 4.4 Rules Concerning Marketing of Alternative Funds ). The FinSA provides for a reverse solicitation exemp - tion, according to which constellations where informa - tion is only made available at the request or initiative of an investor, without any preceding advertising, are not considered an offering. Whether and to what extent such a reverse solicitation exemption also applies in the context of the offering of foreign AIFs under the CISA is not entirely clear, as the concepts of offering under the FinSa and the CISA are not identical. While there are good arguments that the provision of information upon the sole request of an investor without any prior marketing would not constitute an offering under the CISA, a cautious approach should be taken, as such a reverse solicitation exemption is very narrow and may not be relied upon as a business model. Foreign AIFs that are exclusively offered to qualified investors are not subject to FINMA authori - sation, which can be considered a private placement exemption (see also 4.4 Rules Concerning Marketing of Alternative Funds ). 4.7 Compensation and Placement Agents Compensation With regard to compensation, fund management com - panies have to comply with various regulations. In particular, they have to comply with FINMA’s circular 2010/1 “Remuneration schemes”. When compensat - ing personnel for sales efforts, the fund management company must adhere to the applicable principles laid out in the FINMA circular. Fund institutions are required to implement a salary and remuneration policy that is commensurate with their size and risk profile, and which motivates their employees to promote the long- term success of the collective investment schemes. This policy must align with the minimum standards set out in the FINMA circular. In particular, they must refrain from providing any financial incentive for con - duct that might damage the investors’ interests. This includes, for example, bonus payments based on the volume of exchange transactions carried out. In this context, it is important to note that in relation to services delegated to third parties (eg, delegation of distribution), fund management companies must waive the compensation owed to them in accord -
ance with the fund regulations, company agreement, investment regulations or discretionary management agreement where such compensation is not used for the payment of the services rendered by such third parties. Placement Agent It is relatively common for Swiss fund management companies to hire placement agents, especially for firms with smaller investor relation teams. Fund mar - keting may constitute a financial service under the FinSA, and placement agents must therefore comply with various regulatory requirements when providing financial services in Switzerland (see 4.4 Rules Con- cerning Marketing of Alternative Funds ). 4.8 Tax Regime for Investors Swiss resident individual and corporate investors are subject to private income tax and corporate income tax, respectively, on the income of contractual funds, SICAVs and LPCIs. The taxable event is the time of distribution and/or the time of reinvestment of the income. The distribution of paid-in capital is not subject to taxation at the level of domestic investors (return of capital). Further, distributions of income from direct ownership of immovable property are not sub - ject to private or corporate income tax, while capital gains, provided they are separately disclosed in the financial statements of the fund, are not subject to income tax for private individual investors. Swiss resi - dent individual and corporate investors can reclaim Swiss withholding tax deducted and remitted by the fund based on Swiss law (see 2.4 Tax Regime for Funds ). SICAFs are taxed like a corporation. Hence, Swiss resident individual and corporate investors of SICAFs are taxed in the same way as those holding an invest - In principle, contractual funds, SICAVs and LPCIs are not considered resident persons under the double tax treaties of Switzerland. However, Switzerland has concluded intergovernmental agreements with certain EU countries, the UK, Australia and Canada under which contractual funds, SICAVs and LPCIs may – on behalf of investors resident in Switzerland – claim ment in a capital corporation. 4.9 Double Tax Treaties
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