Capital: Bern
Largest city: Zurich
Official Language: German, French, Italian, Romansh
Government: Federal semi-direct democracy under a multi-party assembly independent directorial republic
Area: 41,285 km2
Population: 8,570,146
Currency: Swiss Franc (CHF)
GDP total: CHF 526 billion (USD584 billion)
GDP per capita: CHF 60,908.15 (USD67,557)
Time zone: UTC +1/ UTC +2
Calling code: +41
Internet TLD: .ch / .swiss

[Source: Wikipedia]

Total Foreign Investment in Switzerland
2018: USD1.513 trillion (CHF1.359 trillion)
2019: USD1.525 trillion (CHF1.370 trillion) with the top 3 foreign investors being the United States, Ireland and the United Kingdom

[Source: Swiss National Bank]


3 largest trading partners: United States, Germany and China
Top 3 exports: Gold (unwrought), Medication mixes in dosage and Blood fractions


Q&A on Foreign Investment
  1. Are there any foreign investment laws in Switzerland?
    No, foreign investments are not directly regulated or subject to approval under Swiss law. Swiss laws which potentially have an impact on foreign investments are the Swiss Code of Obligations (CO), the Swiss Federal Act on the Acquisition of Real Estate by Persons Aboard (also known as “Lex Koller”), certain financial markets laws such as the Swiss Act on Banks and Savings Banks or the Swiss Federal Act on Financial Market Infrastructures, and the Swiss Antitrust Act. However, except for the Lex Koller, none of the above-mentioned statutes directly address foreign investments, but rather set the general rules applicable to both Swiss and foreign investors.
  2. Is there a governing or regulatory body responsible for overseeing foreign investment in Switzerland?
    No, there is no general regulatory authority governing foreign investments and neither are there any significant investment reporting obligations. Regulatory bodies are competent for certain regulated business areas irrespective of an investment’s origin, for example, in the areas of banking, financial services and insurance, telecommunication, transport, energy, aviation, gambling, military equipment, and precious metals.
  3. What restrictions exist in Switzerland on foreign investment?
    Swiss legislation that directly addresses or aims to restrict foreign investments is uncommon.
    Antitrust law provides for merger control to avoid the elimination of competition in the case of company takeovers. In the case of takeovers of listed companies, stock exchange law regulates the notification requirements for shareholding acquisitions. In both cases, Swiss law does not differentiate between domestic and foreign investors.
    Company law sets out certain minimum substance standards, such as the obligation that at least one authorized signatory of a company must be resident in Switzerland (irrespective of the director’s nationality).
  4. Can foreign investors acquire real estate/ property/ land in Switzerland?
    Foreign investors are free to acquire real estate in Switzerland provided the real estate serves a commercial purpose. However, there are significant obstacles to the acquisition of residential property by foreign nationals, for example, requiring prior approval from the competent local authority.
  5. Which industries do these restrictions apply to (if any)?
    See answers to questions 3 and 4 above. Except for the acquisition of residential property by foreign nationals, there are no industry sectors with restrictions explicitly targeting foreign direct investments.
  6. Are there any sanctions or restrictions on foreign investors from certain countries?
    Except for the usual sanctions lists issued by the United Nations, the United States of America and/or the European Union, which are usually (but not in every case) replicated by the Swiss government, there are generally no sanctions or restrictions on foreign investors from certain countries.
  7. Are any governmental approvals required for foreign investment in Switzerland?
    The only approval specifically required by foreign investors applies in the case of investments in residential property, for example, investment in real estate management companies or apartment hotels with a self-use right of an apartment by the foreign investor for a certain period of time per annum.
  8. What are the common types of foreign investment in Switzerland?
    Generally, companies in the pharmaceutical, plastic and life sciences industry, engineering and high-tech industry, the commodities trading and the finance sector attract foreign investors.
    Around 35% of all foreign direct investments in Switzerland are equity investments (both listed and private). Another 35% of foreign direct investments are debt investments, and the remaining 30% of foreign direct investment originates from reinvested profits of existing Swiss investments. The overall amount of foreign direct investments is between CHF 30 billion and CHF 100 billion per year. Since 2018, the amount of foreign direct investments has decreased in general, and within all foreign direct investments, there is a tendency towards more equity instead of loan investments.
  9. What are the common business entities open to foreign investors?
    The two most common entities are the company limited by shares (Aktiengesellschaft, Ltd., which is less common, combined with elements of a limited partnership) and the limited liability company (LLC). Swiss company law allows for a comparably flexible and tailor-made design of such legal entities.
    The company limited by shares with a minimum share capital of CHF 100,000, half of which must be paid up at incorporation, is more capital-based than the Swiss LLC and requires less formal filings with the commercial register. It is, therefore, the preferred choice of foreign investors. However, investors from certain countries, in particular the United States of America, prefer the LLC for tax reasons (despite its slightly more burdensome filing requirements). The Swiss LLC is considered an “eligible entity” pursuant to the American “check-the-box” principle and, therefore, has tax planning benefits.
  10. Are there any tax advantages for foreign investment in Switzerland?
    Switzerland is organized as a federation, wherein the main power is with the states, the so-called Cantons. Particularly with respect to profit taxes, the main tax authority lies with each of the 26 Cantons, next to limited taxation authority at the federal level. As the general welfare and financial needs differ from Canton to Canton, tax rates vary from one Canton to another and from one municipality to another.
    Switzerland in general and most Cantons in particular are interested in attracting foreign investors. Therefore, many Cantons offer tax exemptions and other tax incentives if certain business and project-related conditions are met. In order to apply for tax advantages, most Cantons require evidence that the investor follows a growth strategy, that the project creates jobs and that the funding, economic viability and business development of the project is sustainable. The maximum tax exemption is 10 years.
    Furthermore, it is not uncommon that Cantons or municipalities, sometimes even the federation, subsidise important business projects with co-investments into the project, or auxiliary investments, for example, in necessary infrastructure (roads, railways, access to highways, etc.).
  11. Are there any incentives for foreign investors in Switzerland?
    Switzerland is a country with a legal framework particularly favourable to foreign direct investment, especially due to its economic, fiscal and political stability and a transparent administration. Therefore, Switzerland limits restrictions for foreign investors. Aside from potential tax exemptions (see answers to question 10) and very project-specific agreements, there are no incentives explicitly addressed to foreign investors.
  12. Are there any free trade zones in Switzerland, which are attractive to foreign investors?
    Switzerland is a member of the European Free Trade Association (EFTA), which is an intergovernmental trade organization and free trade area that operates in parallel with the European Union (EU). In addition, there are more than 30 bilateral agreements between Switzerland and more than 40 other nations or associations. However, there are no dedicated free trade zones within Switzerland.
  13. Can foreign investors obtain work visas in Switzerland?
    EU/EFTA citizens can freely enter Switzerland but must apply for a separate work permit. Such work permits are usually granted if the applicant can present an employment contract with a Swiss employer.
    Nationals of all other countries need to obtain a special residence permit with authorization to work in Switzerland. The application process is extensive and the authorities require more detailed proof of the employment opportunity and/or the business plan. Furthermore, the Swiss Federal Act on Foreign Nationals and Integration (FNIA) fully applies, which among others, sets a priority for the employment of Swiss nationals, thereby prohibiting the employment of a non-EU/EFTA national if a Swiss national equally fulfills the (reasonable) job conditions.
  14. Are there any foreign currency or exchange controls regulations in Switzerland relating to foreign investment?
    With the exception of certain regulations applicable to banks and finance companies, there are no exchange controls nor currency regulations. The Swiss National Bank (SNB) has the authority to introduce measures concerning minimum reserve requirements, foreign currency positions, foreign source funds, and a calendar for public issues of bonds and shares.
  15. Can foreign investors invest in government projects? If so, are there any restrictions or penalties imposed on the withdrawal of such investments?
    It is at the discretion of the respective (federal, cantonal, local) government to open or restrict projects into which foreign investors can invest. There are government projects open for (partial) foreign direct investment. However, critical government infrastructure is usually excluded from private investments, whether they be of Swiss or foreign origin.
  16. Are there any safeguards or investor protection frameworks in place in Switzerland for foreign investors?
    Despite the lack of comprehensive investment control in Switzerland, there are mechanisms to protect national security as well as sector-specific and cross-sector regulations which attenuate unrestricted influence by foreign investors.
    National security concerns through the sale of critical infrastructure can be addressed by maintaining public ownership over the relevant companies and infrastructure. Critical infrastructure comprises infrastructure to protect the population, ensure national security and maintain economic prosperity. This includes public institutions, energy, finances, health, information and communication, food, public safety and transportation.
    It can be said that the general protection laws related to property as well as intellectual property are extensive and equally include foreign direct investment assets. Expropriation requires that strict procedures pursuant to the Swiss Federal Act on Expropriation be followed.
  17. Is Switzerland a signatory to any investment protection treaties with any countries?
    Switzerland has signed over 120 Bilateral Investment Promotion and Protection Agreements (BITs).
  18. Have there been any recent changes in law or developments for reform that may affect foreign investment in Switzerland?
    No, however, in March 2020, the Swiss parliament voted for the Federal Council to draft an investment control act, which will serve parliament as the basis for a debate concerning the regulation of foreign direct investments (FDI) in Swiss companies. The discussion on FDI control was relaunched after it was last rejected in 2017. Those in favour of FDI control request that there be a level playing field between Swiss legislation and the legislation in other European jurisdictions.
    The process of drafting a bill and parliamentary debate will take a substantial amount of time and, to date, it still cannot be estimated what kind of investment control regulations will be introduced, or whether such legislation will even be introduced at all.
  19. What tips are there for foreign investors to be aware of when dealing with foreign investment in Switzerland?
    Even without comprehensive investment control, Switzerland has, as discussed above, instruments to protect national security as well as sector-and cross-sector regulations. The most obvious obstacles are the restrictions and limitations with regard to the acquisition of residential property (Lex Koller). Furthermore, there are certain de-facto hurdles that should be taken into account by foreign investors prior to making an investment.
    First, with regard to a Swiss company limited by shares, foreign investors should be aware of certain restrictions on the transfer of shares, which may apply if the company’s articles of incorporation provide for such restrictions (which is the case with respect to many private companies). The acquisition of shares then requires the approval of the board.
    Second, in connection with the incorporation or a takeover of a Swiss company, foreign investors are advised to contact Swiss banks in respect of the establishment of a banking relationship at an early stage. Swiss banks perform strict know-your-customer (KYC) and anti-money laundering (AML) reviews of foreign investors in connection with the opening of corporate accounts for Swiss companies owned or controlled by foreign nationals (both active and passive non-financial entities). Such KYC procedures and AML approvals can, in certain cases, be burdensome and time-consuming.
    Third, another de-facto restriction is the Swiss 35% withholding tax on dividend payments from Swiss companies. Such withholding tax is a security measure and, therefore, may be claimed back by the respective shareholder. However, the amount available for claim-back is reduced for foreign shareholders domiciled in a country with which Switzerland concluded a double tax treaty, or even excluded if there is no such double tax treaty. Therefore, investors from certain countries might be subject to additional de-facto taxation of up to 35% on dividend payments from Swiss companies. Diligent tax planning in order to avoid such unfavourable results is key.

Bruno Hunziker
Partner, GHR Rechtsanwälte AG

Bruno Hunziker’s practice focuses on corporate/M&A, real estate transactions (including works contracts and Lex Koller regulation on the acquisition of real property by persons abroad), as well as private clients (immigration and residence permits). He specializes in matters relating to the planning, development and construction of hotel and resort complexes and hybrid hotel and facility management projects. Bruno Hunziker represents domestic and foreign corporations as well as private individuals. He also acts as board member in various companies.

Stephan Hofer
Senior Associate, GHR Rechtsanwälte AG

Stephan Hofer’s practice focuses on national and international transactions and corporate structuring. He also advises Swiss SMEs and government organizations on privacy and data protection. By teaming up with IT and other professionals in the digital sector, he is able to provide holistic solutions to clients’ matters. Stephan Hofer also advises on contract and financial markets law.


Name: GHR Rechtsanwälte AG
Address: 1. GHR Rechtsanwälte AG, Tavelweg 2, P.O. Box, 3074 Bern Muri, Switzerland. 2. GHR Rechtsanwälte AG, Seidengasse 13, P.O. Box, 8008 Zurich, Switzerland
Telephone: +41 58 356 50 50
Website address:
Key contact: Mr. Bruno Hunziker, Founding Partner,
Established: 1992
Number of lawyers: 11
Languages: English, German, French

Brief description:
Founded in 1992 and registered as a corporation since 2000, GHR is a leading Swiss independent full-service business law firm with a proven track record and market recognition in corporate/M&A and other key areas of business law. From our offices in Bern and Zurich, we provide legal services to local and global clients, regardless whether they are small private business enterprises or multinational corporations, public sector organizations or individuals. As a member of three major independent law firm networks and with strong relationships with some of the world’s leading law firms, we have access to top tier legal advice worldwide.

Key practice areas:
Banking & Finance, Capital Markets, Commercial/Trade, Dispute Resolution and Arbitration, Corporate/M&A, Employment and Social Security, Energy and Natural Resources, Insolvency and Restructuring, Private Clients, Real Estate, Tax.

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