SWITZERLAND Law and Practice Contributed by: Nicolas Wehrli and Melanie Wilhelm, Loyens & Loeff
share transfers to strategic or financial buyers. Venture capital investors may co-sell or roll over their stakes, while founders and key managers often reinvest part of their proceeds into the buyer’s equity. Cash is the primary form of consideration, though rollovers may include equity. Exit terms are governed by shareholders’ agreements, which usually include drag-along and tag-along rights. Representations and warranties are negotiated in advance, with liability capped at each shareholder’s pro rata share and structured on a several, not joint, basis. Founders should ensure deal readiness by cleaning up the cap (capitalisation) table, resolving IP ownership, and aligning with Swiss corporate and securities law. While IPOs remain rare, Switzerland’s energy transi- tion and ESG momentum are attracting more private capital and strategic buyers, making structured exits increasingly viable for early-stage companies. Spin-offs are not yet widespread in Switzerland’s ener- gy and infrastructure sectors, especially compared to more dynamic areas like technology or life sciences. However, the landscape is evolving. As companies respond to the pressures of energy transition, decar- bonisation, and digital transformation, spin-offs are increasingly considered as a strategic tool to stream- line operations and unlock value. While traditional utilities and infrastructure operators have historically maintained vertically integrated mod- els, recent developments suggest a shift. For exam- ple, ABB E-mobility’s spin-off and pre-IPO financing, and Shell’s investment in EVPass, reflect a growing trend of separating high-growth, innovation-driven units from legacy operations. 3.2 Tax Consequences Spin-offs can be structured as tax-neutral reorgani- sations at the corporate level (including a so-called holding spin-off) if certain requirements are fulfilled, regardless of the execution under civil law (eg, asset 3. Spin-Offs 3.1 Trends: Spin-Offs
deal, two-step demerger or statutory demerger). The most important requirements for Swiss tax purposes are that: • the spin-off business remains taxable in Switzer- land; • the values previously relevant for income tax are taken over; • one or more businesses or parts of businesses are transferred; and • the legal entities that exist after the spin-off con- tinue to operate a business or part of a business. It should be noted that, especially in the case of tax- neutral spin-offs, the key element is the so-called double business requirement, meaning that an inde- pendent business must remain operative within the transferring entity (in addition to the business trans- ferred to the new entity). If the above conditions are fulfilled, the tax neutrality of spin-offs also applies to the shareholders, provided there will be no gain in the nominal value or so-called capital contribution reserves (for individuals). There is no blocking period for Swiss tax purposes, provided the spin-off qualifies as a tax-neutral spin-off and, in particular, not as a tax-neutral hive down (the transfer of a business from a company into a subsidi- ary). 3.3 Spin-Off Followed by a Business Combination In principle – and bearing in mind that a tax-neutral spin-off is based on the requirement of two separate businesses without being subject to a blocking period – a spin-off immediately followed by a business com- bination should be possible for Swiss tax purposes, if structured properly. Whether or not independent busi- ness operations exist is assessed based on various criteria, as developed by the Swiss tax authorities. It should always be considered whether or not the general rules for tax avoidance may be applicable to the case at hand. Generally, tax avoidance would be assumed if:
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