SWITZERLAND Law and Practice Contributed by: Marcel Dietrich, Richard Stäuber and Katharina Bratvogel, Homburger
9. Foreign Direct Investment/ Subsidies Review
On 15 December 2023, the Federal Council adopted the dispatch on the Investment Con - trol Act. In comparison to the preliminary draft of 2022, the draft bill presents a minimal solution with a significantly reduced scope of application. According to the draft, acquisitions of Swiss undertakings will only be notifiable if: • a foreign state investor acquires control; • a (security-)critical sector is concerned; and • certain de minimis or turnover thresholds are exceeded. Examples of (security-)critical sectors include defence equipment, electricity grids and pro - duction, as well as health and telecoms infra - structures. The investment control rules will be separate from the merger control rules. It is envisaged that the notification must be submitted to SECO and that the decision not to approve a notifiable investment will, however, be held exclusively by the Federal Council at the request of the EAER. The draft Investment Control Act is now being tabled in parliament for deliberation. The Nation - al Council, as one chamber of parliament, tight - ened the draft bill in September 2024. Specifi - cally, it decided that investment controls should also apply to non-state investors. In addition to public order and security, the supply of essential goods and services is explicitly mentioned as worthy of protection. The Council of States, the other chamber of parliament, is currently debat - ing the draft bill. It is currently unclear when it will come into force.
9.1 Legislation and Filing Requirements There is currently no general foreign invest - ment control in Switzerland; however, special requirements apply in certain sectors where prior government approval is required (eg, banking, securities, and real estate) – see 1.2 Legislation Relating to Particular Sectors . However, the legal situation might change in the future. In March 2020, the Swiss parliament requested that the Federal Council propose foreign invest - ment control legislation with a particular focus on protecting Swiss expertise, employment, public order, and safety. Following the presentation of the key points of a proposal for Swiss invest - ment control in August 2021, the Federal Council published the preliminary draft bill and opened the consultation process for a new Federal Act on Foreign Direct Investment Control in May 2022. Following the consultation process, this draft turned out to be too extensive in scope. According to the initial draft, the acquisition of control over Swiss companies by foreign inves - tors should be subject to review in certain indus - tries if the companies provide non-substitutable services or if state entities in security-relevant areas are critically dependent upon them. Fur - thermore (and regardless of the sector), the review was envisaged for investments by foreign states or state-related actors. According to that initial draft, private foreign investors were also subject to the notification and approval require - ment, particularly in security-relevant sectors.
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