SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger, André Kuhn and Sabrina Kunz, Walder Wyss Ltd
6.2 Types of Commercial Leases There are no different types of commercial leases, but leases may qualify as regular, double-net or triple-net agreements. 6.3 Regulation of Rents or Lease Terms Swiss tenancy law contains various mandatory provi - sions (typically in favour of the tenants). Excessive rents are prohibited, and tenants have the right to challenge them in court as being abusive. 6.4 Typical Terms of a Lease Typically, the lease term is not below five years (due to the requirement of a minimum term of five years for the rent to be subject to indexation). Frequently, the parties agree on the tenant’s options to extend the lease. Lease terms may also be concluded for an indefinite period. With the exception of minor repair works, all mainte - nance and repair costs must be borne by the landlord. Double-net and triple-net structures are valid, subject to certain conditions (eg, the tenant must confirm that the transfer of maintenance and repair obligations to the tenant has been sufficiently reflected in the calcu - lation of the rent). Typically, rent is paid in advance, either monthly or quarterly. 6.5 Rent Variation The parties may agree on certain adaptations, sub - ject to changes of the interest rate level and, alterna - tively for leases with a minimum term of five years, of the Swiss Consumer Price Index (so-called indexed rent). The parties may also agree on staggered rents (although not in combination with indexed rents for the same period) and special types, such as turnover rents. If the landlord makes value-adding investments in the leased premises, it has the right to unilaterally increase the rent, subject to certain statutory regulations. 6.6 Determination of New Rent Typically, Swiss tenancy law provides the framework for the calculation of any rent increases.
ship limited by shares, must have a minimum share capital of CHF20,000. For investment fund vehicles, the capital requirements are generally higher. 5.5 Applicable Governance Requirements The governance requirements differ between invest - ment vehicles that require approval from Switzerland’s Financial Market Supervisory Authority (FINMA) and investment vehicles that do not require any public approval. For the latter, general corporate govern - ance rules apply. Authorisation for investment vehicles requiring FINMA approval is granted if the following requirements are met, amongst others: • the persons responsible for management and the business operations have a good reputation, guar - antee proper management and have the requisite specialist qualifications; • the significant shareholders have a good reputation and do not exert their influence to the detriment of prudent and sound business practice; • compliance with the duties is assured by inter - nal regulations and an appropriate organisational structure; and • sufficient financial guarantees are available. 5.6 Annual Entity Maintenance and Accounting Compliance The annual entity maintenance and accounting com - pliance cost varies strongly depending on whether it is a regulated or non-regulated investment vehicle, and depending on the real estate assets and structure of the vehicle. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Basically, Swiss (private) law provides for two types of purely contractual arrangements (as opposed to rights in rem such as ownership and ground lease): the lease and the usufructuary lease. Public bodies may also grant public works constructions for certain infrastructure projects.
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