SWITZERLAND Law and Practice Contributed by: Marion Bähler, Ramona Wyss, Florian Gunz Niedermann, Fabienne Limacher and Urs Hofer, Walder Wyss Ltd
7.2 Restrictions Competition Law and Merger Control
FDI Regulation Switzerland has so far not implemented a com - prehensive foreign investment control regime. In December 2023, the Swiss Federal Council pub - lished a draft for a Federal Act on the Control of Foreign Investments, which has yet to pass par - liament (and a potential referendum). The scope of the draft legislation is limited to investment by state-controlled foreign investors in certain particularly critical industries. Furthermore, the draft envisages turnover thresholds. In addition, there are restrictions that can impact foreign investment in certain specific sectors already in force. For example, the Federal Act on the Acquisition of Real Estate by Persons Abroad (Lex Koller) provides for restrictions on the (direct or indirect) acquisition of real estate that is not used as a permanent establishment of a commercial, manufacturing or other business by non-Swiss persons or entities, which may affect the sale or issuance of shares to foreign investors in certain instances. As another exam - ple, pursuant to the Federal Act on Banks and Savings Banks, additional authorisation from the FINMA is required if a Swiss bank becomes foreign-controlled after its establishment. Financial Market Regulation Broadly speaking, financial services regulations may impose restrictions and regulatory require - ments on venture capital investment structured as collective investment schemes or on activities that go beyond the realm of corporate financing and qualifying as financial services.
The Swiss Cartel Act provides for a notification obligation to the Swiss competition commis - sion (CompCo) in case of one or several inves - tors obtaining sole or joint control over a Swiss company, provided that: (i) the relevant turnover thresholds are met; or (ii) CompCo has previ - ously established that at least one of the inves- tors concerned holds a dominant position on a certain market in Switzerland and the investment concerns that or a neighbouring market. Joint control does not necessarily require a majority in terms of voting rights or board rep - resentation but may also be achieved through sufficiently broad veto rights (as commonly seen in shareholders’ agreements) if these are grant - ed to individual investors or a specific group of investors in a manner that no longer allows for changing majorities. The turnover thresholds are met if in the busi - ness year preceding the investment either (i) one of the investors reached a total turnover of at least CHF2 billion or a turnover in Switzerland of at least CHF500 million or (ii) at least two inves - tors reached a turnover in Switzerland of at least CHF100 million, in each case applying a group perspective. Therefore, the application of merger control regulations should be carefully assessed, in particular when dealing with strategic investors or their venture arms. Furthermore, competition law issues may also arise with respect to non- compete and non-solicitation undertakings in shareholders’ agreements.
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