SWITZERLAND Law and Practice Contributed by: Marco Toni, Gilles Pitschen, Leonard Baumann and Lara Pafumi, Loyens & Loeff
2. Establishing a New Company, Early-Stage Financing and Venture Capital Financing of a New Technology Company 2.1 Establishing a New Company Among other features that make it one of the most innovative countries in the world, Switzerland offers a business-friendly legal framework ensuring fast and cost-effective incorporations. Therefore, Switzerland is an attractive location in which to incorporate a start- up company. Swiss corporate law offers all the rele- vant features required for a start-up company to oper- ate successfully ‒ notably, with regard to pre-seed, seed financings and subsequent capital contributions from financial sponsors or strategic investors. Differ- ent share classes with voting/non-voting structure, dividend and/or liquidation preferences are some of these prominent features. The entire incorporation process for a new company typically requires two to four weeks, depending on ‒ among other things ‒ the canton of the company’s intended seat, the country of residence of the inves- tors (particularly for opening the required blocked bank account) and the efficiency of the founders in deliver- ing the necessary documents. Unless the founders choose a partnership with full personal liability, an ini- tial capital contribution is required to establish a new company (see 2.2 Type of Entity for required capital amounts). 2.2 Type of Entity Entrepreneurs are typically advised to incorporate an entity in the form of a corporation ( Aktiengesells- cha ft) or a limited liability company ( Gesellschaft mit beschränkter Haftung ). Both types of entities are endowed with a separate legal personality and pro- vide for a liability limited to their share capital. The minimum share capital to incorporate a corporation is CHF50,000 (partially paid in) or CHF100,000 (fully paid in), whereas investors naturally favour fully paid- in capital to have recourse to a higher adhesion sub- strate. An entity may also be incorporated as a limited liability company. The main differences from a corpo- ration are the lower minimum share capital require- ment of CHF20,000, the disclosure of the sharehold- ers in the commercial register and somewhat limited
Switzerland currently has no general FDI screening mechanism, and the Federal Council has consistently opposed broad investment controls, emphasising the importance of openness for economic competitive- ness. However, following a parliamentary motion, the Fed- eral Council introduced a draft Investment Screening Act in mid-December 2023, which is now under par- liamentary debate. A particularly controversial issue is whether private, non-state investors should also be subject to FDI control, a position supported by the National Council, while the Council of States favours a narrower scope limited to state-controlled investors and sensitive sectors. The EU Artificial Intelligence Act (the “EU AI Act”), which came into force on 1 August 2024, has an extraterritorial reach. This means it applies to Swiss companies whose AI systems are available or used in the EU. In contrast, the Federal Council decided not to introduce a standalone Swiss AI Act in February 2025. Instead, Switzerland will ratify the Council of Europe’s AI Convention and address AI-related issues through targeted amendments to existing legislation. Rapid advances in AI and the accelerating pace of digital transformation are prompting companies to rethink and adapt their business models. This shift is expected to continue driving M&A activity in Switzer- land’s TMT sector, as businesses seek innovative solu- tions and strategic growth opportunities. Therefore, the outlook for the Swiss TMT M&A market remains cautiously optimistic. Easing inflation and lower inter- est rates are gradually improving overall conditions for deal-making. Furthermore, Switzerland’s stable economy, sound financial system, and business- friendly legal and political environment continue to position the country as a highly attractive destination for technology-focused transactions.
238 CHAMBERS.COM
Powered by FlippingBook