SWITZERLAND Law and Practice Contributed by: Beda Kaufmann, Alexander von Jeinsen, Daniel Raun and Laurent Riedweg, Advestra
activities that negatively affected public order or secu - rity in Switzerland or elsewhere, whether the investor has conducted industrial espionage or has been the subject of sanctions, and whether the investor would gain access to security-relevant information or sensi - tive personal data. SECO has to take into considera - tion whether the services, products or infrastructure of the target could be replaced within a reasonable time. The criteria contained in the FICA are non-exhaustive, meaning that other considerations could be taken into account to the extent that they are relevant to assess whether a transaction could jeopardise public order or security. 7.3 Remedies and Commitments The FDI review is initiated upon request by the foreign investor, but SECO may commence a review proce - dure ex officio in cases of suspected non-compliance with the approval requirement. The foreign investor(s) and other persons involved are obliged to provide information and documents as requested by SECO. Non-compliance with the duty to provide such infor - mation during the review can lead to a fine of up to CHF100,000. Where the review is obstructed or infor - mation required from foreign authorities is outstand - ing, the deadlines mentioned above may be extended. Instead of prohibiting a transaction, SECO may grant its approval subject to conditions, provided the threat to public order and security can thereby be eliminated. 7.4 National Security Review Enforcement Under the draft FICA, as long as a transaction has not been approved, it may not be consummated and the effectiveness of the transaction under civil law is suspended. If a transaction subject to the approval requirement is consummated without the required approval, the Federal Council may order the neces - sary measures (including a divestment) to restore the lawful state. In addition, a fine of up to 10% of the domestic target’s average annual turnover during the two last fiscal years may be imposed if: • a transaction that is subject to approval is consum - mated prior to the granting of approval; • a transaction is consummated based on approval obtained on the basis of misrepresentation; • a measure ordered by the Federal Council to restore the lawful state is not implemented; or
• a condition for the approval of a transaction is not complied with.
8. Other Review/Approvals 8.1 Other Regimes
In the absence of a general FDI screening and approv - al regime, only sectoral restrictions currently apply – most notably in the real estate and banking sector. The Federal Act on the Acquisition of Real Estate by Persons Abroad (commonly referred to as “Lex Koller”) generally prohibits the acquisition of residen - tial real estate by non-Swiss citizens, subject to certain exceptions (such as for EU citizens with residence in Switzerland). This not only includes direct investment in, or acquisition of, real estate but also the acquisition of shares in a real estate company. In the financial sector, the establishment of foreign control over a bank or securities firm is subject to a special licence requirement by the Swiss financial reg - ulator FINMA. The granting of the additional licence requires, among other things, that the jurisdictions in which the persons holding a qualified participation (ie, at least 10% of the capital or voting rights) grant reciprocal rights. Changes of the foreign holders of qualified participations trigger a new licensing require - ment. A bank or securities firm is deemed to be under foreign control if foreigners holding qualified participa - tions directly or indirectly hold more than half of the voting rights or otherwise have a controlling influence. In other sectors, specific additional licensing require - ments apply for foreign investors, including in avia - tion, telecommunications, nuclear energy and radio/ television.
9. Tax 9.1 Taxation of Business Activities Corporate Income Tax
Corporations with their statutory seat or place of effec - tive management in Switzerland (Swiss tax-resident corporations) are subject to corporate income tax on their worldwide profits – albeit excluding profits allo - cated to a fixed place of business, permanent estab -
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