Legal and regulatory framework

Types of transaction

What types of transactions are classified as ‘corporate reorganisations’ in your jurisdiction?

In comparison with other jurisdictions, the term ‘corporate reorganisation’ is not consistently used in Swiss legal practice and does not presuppose specific legal qualifications (eg, tax-neutral transfers of assets or shares). In general, corporate reorganisations comprise transactions such as mergers, demergers or conversions of legal entities. However, the transfer of shares or assets and liabilities (business units or individual assets or liabilities) under the Swiss Merger Act or in the form of traditional share or asset deals within a group of companies, the change of a company’s registered seat or domicile or the voluntary liquidation of a legal entity are also considered corporate reorganisations.

Restructuring transactions involving distressed entities and insolvency proceedings are not discussed in this chapter. The same is true for transactions with group external third parties (eg, strategic mergers).

Rate of reorganisations

Has the number of corporate reorganisations in your jurisdiction increased or decreased this year compared with previous years? If so, why?

The covid-19 pandemic has put pressure on numerous Swiss companies to reconsider their internal structures and adjust them to become more efficient and innovative within a very short time period. Also, larger groups had to reorganise their business under refinancing transactions. As a result, internal corporate reorganisations were stable or even increasing during 2020. Due to the measures of the Swiss government (the guarantee programme, short work easements, etc), there has not yet been a wave of insolvencies or restructurings on the Swiss market. However, given that some of these measures have run out, pressure on companies in several sectors will increase to have even more efficient corporate structures in place. 

In addition, the Swiss corporate tax reform entered into force on 1 January 2020, which can be identified as a driver for internal group corporate restructurings. As a result of the Swiss corporate tax reform, previously existing tax privileges (such as finance branches, mixed domiciliary, principal and holding regimes) were abolished and replaced by other Organisation for Economic Co-operation and Development (OECD)-compliant measures (patent box, additional research and development (R&D) reduction etc), leading to a reduced corporate income tax liability.

Jurisdiction-specific drivers

Are there any jurisdiction-specific drivers for undertaking a corporate reorganisation?

In the course of the implementation of the corporate tax reform, as of 1 January 2020, Switzerland has abolished its previously existing tax privileges (such as finance branches, mixed, domiciliary, principal and holding company regimes) and has introduced other OECD-compliant measures such as the IP box, R&D super deduction, notional interest deduction and the step-up of hidden reserves for companies immigrating to Switzerland to defend its traditional premium ranking as a global business location. This change of the Swiss tax environment is expected to be an impetus for tax-driven corporate reorganisations and, particularly in view of the international pressure on offshore structures, Switzerland is often a favourable jurisdiction when it comes to the onshoring of offshore companies. 


How are corporate reorganisations typically structured in your jurisdiction?

The main types of corporate reorganisations, such as mergers, demergers, conversions or simplified transfers of assets and liabilities, are governed by the Federal Act on Merger, Demerger, Conversion and Transfer of Assets and Liabilities of 3 October 2003 (the Merger Act). In contrast, internal group sales, and transfers of shares and assets (individually transferred) are governed by the Federal Act on the Amendment of the Swiss Civil Code of 30 March 1911 (Part Five: Code of Obligations) amended on 1 January 2021 (the Code of Obligations). ‘Quasi-mergers’ (ie, the combination of two entities without merging their legal forms or liquidating one of the entities) are also ruled by the Code of Obligations. In this scenario, the combination takes place by way of a share-for-share transaction or the formation of a new legal entity that assumes assets and liabilities of or the shares in the two combined legal entities in exchange for its own shares. Finally, demergers can also be implemented under the Code of Obligations by way of a two-step transaction (ie, incorporation of a special purpose vehicle (SPV)with a contribution-in kind of certain assets into the SPV followed by a distribution of the shares in the SPV). From a tax perspective, corporate reorganisations are often structured as book value transactions, as Swiss tax law allows the implementation of corporate reorganisations, in many cases, in a tax-neutral manner if, inter alia, assets or liabilities are transferred at book value.

Laws and regulations

What are the key laws and regulations to consider when undertaking a corporate reorganisation?

In Switzerland, the Merger Act governs the main parts of corporate reorganisations. The Merger Act has beenpartly revised and amended, the last time in 2014. The Merger Act is supplemented by other federal and cantonal statutes and circulars, including:

  • the Federal Act on the Swiss Civil Code of 10 December 1907, amended on 1 January 2021;
  • the Federal Act on the Amendment of the Swiss Civil Code of 30 March 1911 (Part Five: Code of Obligations), amended on 1 January 2021;
  • the Federal Act on Private International Law of 18 December 1987, amended on 1 January 2021;
  • the Ordinance on the Commercial Register of 17 October 2007, amended on 1 January 2021;
  • the Federal Act on Direct Federal Tax of 14 December 1990, amended on 1 January 2021;
  • the Federal Act on Harmonisation of the Direct Cantonal and Communal Tax as of 14 December 1990, amended on 1 January 2021;
  • the Federal Act on Withholding Tax of 13 October 1965, amended on 1 January 2020;
  • the Federal Act on Stamp Duty of 27 June 1973, amended on 1 January 2020;
  • the Federal Act on Value Added Tax of 12 June 2009, amended on 1 January 2020;
  • the Cantonal Acts on Cantonal Taxes;
  • Circular Letter No. 5 of the Swiss Federal Tax Administration of 1 June 2004;
  • Circular Letter No. 6 of the Swiss Federal Tax Administration of 6 June 1997;
  • Circular Letter No. 27 of the Swiss Federal Tax Administration of 17 December 2009; 
  • Circular Letter No. 29a of the Swiss Federal Tax Administration of 9 September 2015; and
  • Circular Letter No. 29b of the Swiss Federal Tax Administration of 23 December 2019.
National authorities

What are the key national authorities to be conscious of when undertaking a corporate reorganisation?

As many corporate reorganisations have a tax impact, it is often recommended to apply for a tax ruling with the competent Swiss tax authorities, in particular with the Swiss Federal Tax Administration and the relevant cantonal tax authorities. Transactions involving the change of the legal entities’ articles of association or requiring the necessity for a filing with the competent register of commerce (eg, mergers, demergers, conversions, capital increases, liquidations) will have to be approved by the competent cantonal register of commerce. Finally, in corporate reorganisations involving the transfer of employees, the competent cantonal social security authority and, in the case of foreign employees, the competent cantonal office for economy and labour might have to be informed.

Law stated date

Correct on

Please state the date on which the law stated here is accurate.

1 February 2021