SWITZERLAND Law and Practice Contributed by: Shelby R du Pasquier, Patrick Hünerwadel, Valérie Menoud and Marcel Tranchet, Lenz & Staehelin
vails. The main restriction occurs with respect to real estate property by application of the Lex Koller, which contains several restrictions and authorisation require- ments for the acquisition of non-commercial property by foreign or foreign-controlled investors (see 6.4 A Foreign Lender’s Ability to Enforce Its Rights ). In this context, foreign investment in a project company holding non-commercial real estate may be restricted by the Lex Koller. Switzerland has signed more than 120 bilateral invest- ment promotion and protection agreements (BITs) with developing and emerging market countries around the world. BITs improve legal certainty and the investment climate. Switzerland has the world’s third-largest net- work of such agreements after Germany and China. The purpose of BITs is (i) to afford international law protection from non-commercial risks associated with investments made by Swiss nationals and Swiss- based companies in partner countries, and (ii), recip- rocally, investments made by nationals and compa- nies of partner countries in Switzerland. Such risks include state discrimination against foreign investors in favour of local ones, unlawful expropriation and unjustified restrictions on payments and capital flows. The Swiss Constitution protects property rights. How- ever, in order to achieve planning goals, the competent authorities may – subject to the rules of expropriation – dispossess land from private persons. Expropria- tions are permitted if they are: • based on sufficient legal foundations; • in the public interest; • compliant with the principle of proportionality; and • the only (reasonable) way in which the relevant planning goals can be achieved. In addition, full compensation has to be made. 8.6 Common Financing Sources and Typical Structures The typical funding techniques for project financings are debt financing (including financings covered by the export credit agency), mezzanine financing, capital markets and state subsidies. Switzerland has an offi- cial export credit agency, the Swiss Export Risk Insur-
ance (SERV), which offers various insurance and guar- antee products to cover political and credit risks. So far, SERV’s products have primarily been relied upon for financings in the power, railways and mechanical engineering industries. That said, SMEs are increas- ingly relying on SERV’s support, which contributes to expanding the scope of industries seeking out SERV’s policies and commitments to facilitate financings. 8.7 Natural Resources Under Swiss law, land ownership extends down- wards into the ground to the extent determined by the owner’s legitimate interest. Therefore, any natural resources found on a property belong to the owner of the property, with the exception of groundwater rivers. However, mining rights and exploitation of natural resources – such as oil, gas or minerals – are usu- ally regulated by federal or cantonal legislation, and a governmental permit, licence or concession is neces- sary. A concession will be granted in exchange for the payment of concession fees or royalties. The amount of concession fees typically depends upon the val- ue of the concession. Domestic and foreign parties are treated equally in this regard. Export restrictions extend to nuclear energy, water for energy production, protected plants and animals. 8.8 Environmental, Health and Safety Laws Switzerland has enacted various environmental, health and safety laws and regulations. Such rules do not generally impact upon the financing of projects. The main regulatory body at a federal level is the DETEC. In particular, the Federal Office for the Environment within the DETEC deals with issues relating to the environment and health and safety. The main federal acts regarding the environment and health and safety are: • the Federal Act on Protection Against Dangerous Substances and Preparations; • the Federal Act on the Protection of the Environ- ment; • the Federal Act on the Protection of Nature and Cultural Heritage; • the Federal Act on the Protection of Waters;
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