SWITZERLAND Law and Practice Contributed by: Marcel Dietrich, Richard Stäuber and Katharina Bratvogel, Homburger
1. Legislation and Enforcing Authorities 1.1 Merger Control Legislation
by foreign investors will be subject to review in certain industries if the companies provide non-substitutable services or if state entities in security-relevant areas are critically dependent upon them. A new Federal Act on FDI Control Furthermore, and regardless of the sector, the review is envisaged for investments by for - eign states or state-related actors. The Federal Council published the preliminary draft bill and opened the consultation process for a new Fed - eral Act on Foreign Direct Investment Control in May 2022. In that draft, it was proposed to intro - duce a notification and approval requirement for certain takeovers of domestic undertakings by foreign investors (prior to closing) that pose a risk to or threaten public order or security in Switzerland. Whereas the focus was on state- owned and state-related foreign investors (notifi - cation and approval requirements for all sectors, except for the de minimis threshold), private for - eign investors were also subject to notification and approval requirements in particularly secu - rity-relevant sectors, partly if certain turnover- related thresholds were met. Revised bill with limited scope The consultation process for the new bill ended in September 2022. Then, on 10 May 2023, the Federal Council decided to substantially revise the proposal from the consultation. It announced the drafting of a heavily revised bill for the atten - tion of parliament and instructed the Federal Department of Economic Affairs, Education, and Research (EAER) to draw up a bill by the end of 2023 that is limited to the investments most critical for security. A limitation in scope was announced, stating that the investment review will take effect when a foreign state-controlled investor acquires a domestic company that is active in a particularly critical area. See 9. For -
Swiss merger control is governed by the Federal Act on Cartels and Other Restraints of Competi - tion (the “Cartel Act” or CartA) and the Ordinance on the Control of Concentrations of Undertak - ings (the ”Merger Control Ordinance” or MCO). In addition, the Swiss Competition Commission (“ComCo”) and its Secretariat have published communications and guidelines on the applica - tion of the relevant merger control provisions. 1.2 Legislation Relating to Particular Sectors There is currently no general foreign investment control regime in force in Switzerland. Special requirements apply in certain sectors where the conduct of business requires prior authorisa - tion – in particular, in sectors that were formerly served by public monopolies, such as telecom - munications, broadcasting and airline transport services. Furthermore, the acquisition of a real estate company (a company with the primary purpose of holding real estate) in Switzerland may require a permit from the competent can - tonal authority under the Federal Act on the Acquisition of Real Estate by Foreign Persons. This legislative framework may change, however. Foreign Investment Control Legislation In March 2020, the Swiss parliament requested that the Federal Council (Switzerland’s execu - tive branch) propose foreign investment control legislation with a particular focus on protecting Swiss expertise, employment, public order, and safety. In August 2021, the Federal Council pre - sented the key points of its proposal for Swiss investment control. Under the planned regime, the acquisition of control over Swiss companies
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