Private Equity 2026 - Switzerland

What are the most common types of private equity transactions in your jurisdiction? What is the current state of the market for these transactions?

All of the standard transaction strategies to acquire portfolio companies are commonly used in Switzerland. We assume that regular leveraged buyouts have accounted for the majority of the transactions in recent years. In 2025, the total deal volume in the private equity sector remained stable, with a further slight increase in the number of deals from the low of 2023 (according to the KPMG M&A Sector Reports for Switzerland from January 2026, available at https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/sector-report-clarity-on-mergers-acquisitions-switzerland-2025.pdf.coredownload.inline.pdf). For 2026, a further slight recovery is expected due to an exit backlog.

What are the most significant factors currently encouraging or inhibiting private equity transactions in your jurisdiction?

In connection with current protectionist policies, unpredictability remains, creating a high level of uncertainty. This has so far thwarted further significant recovery. In addition, the latest rise in energy costs could inhibit growth in M&A activity, even when considering the above-mentioned exit backlog.

Are you seeing any types of investors other than traditional private equity firms executing private equity-style transactions in your jurisdiction? If so, please explain which investors, and briefly identify any significant points of difference between the deal terms offered, or approach taken, by this type of investor and that of traditional private equity firms.

A number of family offices are playing an active role in Swiss private equity-style transactions, both in co-investments with private equity funds and as sole investors. In particular, in the latter case, their approach can differ from traditional private equity firms, e.g. in terms of structuring in connection with tax considerations.

What are the most common acquisition structures adopted for private equity transactions in your jurisdiction?

Usually, private equity funds investing in Swiss portfolio companies set up a NewCo/AcquiCo in Switzerland as an acquisition vehicle. The NewCo is held either directly or via Luxembourg, the Netherlands or a similar structure. We have also seen AcquiCos incorporated outside of Switzerland.

Management usually invests directly in the AcquiCo rather than via a management participation company. Often, a single shareholders' agreement ("SHA") is concluded between the financial investor(s) and management, which governs all aspects of the investment (governance, exit procedures, share transfers, good/bad leaver provisions, etc.). In other cases, a main SHA is concluded between the financial sponsors and a separate, smaller SHA with management.

What are the main drivers for these acquisition structures?

The acquisition structure is mainly tax-driven (tax-efficient repatriation of dividends/application of double taxation treaties, tax-exempt exit). Directly investing in the AcquiCo may allow Swiss-domiciled managers to realise a tax-free capital gain on their investment when the AcquiCo is sold on exit (see questions 10.2 and 10.3 below).

How is the equity commonly structured in private equity transactions in your jurisdiction (including institutional, management and carried interests)?

A Swiss NewCo often has only one class (or a maximum of two classes) of shares. Preferential rights, exit waterfall, etc. are implemented on a contractual level in the SHA. NewCos incorporated abroad often have several classes of shares.

If a private equity investor is taking a minority position, are there different structuring considerations?

Structuring is, in principle, not fundamentally different from majority investments. Pre-existing structures are often maintained to a certain extent. However, on a contractual level, increased protection is sought (veto rights, the right to trigger an exit, etc.).

In relation to management equity, what is the typical range of equity allocated to the management, and what are the typical vesting and compulsory acquisition provisions?

Management equity amounts and terms depend very much on the individual deal. Typically, the management stake ranges between 3–10%. In most cases, standard drag-along and tag-along provisions and good/bad leaver call options for the benefit of the financial sponsor will apply. Put options for the benefit of management are less prevalent.

For what reasons is a management equity holder usually treated as a good leaver or a bad leaver in your jurisdiction?

Good leaver cases typically encompass: (i) termination of employment by the company absent cause set by the manager; (ii) termination of employment by the manager with cause set by the company; and (iii) death, incapability, reaching of retirement age or mutual termination.

Bad leaver cases on the other hand usually include (i) termination of employment by the company with cause set by the manager, (ii) termination of employment by the manager absent cause set by the company, and (iii) material breach by the manager of the SHA or criminal acts.

What are the typical governance arrangements for private equity portfolio companies? Are such arrangements required to be made publicly available in your jurisdiction?

The predominant model for acquisitions of portfolio companies in Switzerland is the stock corporation (Aktiengesellschaft). Sometimes, limited liability companies ("LLCs" or "GmbH") are used, which have the advantage of being treated as transparent for US tax purposes.

The stock corporation is governed by a board of directors that has a supervisory function and resolves on strategic and important issues (appointment of senior management, etc.). A director is elected ad personam; proxies (e.g. in the case of absence at meetings) are not possible.

Day-to-day management is normally delegated to management, based on organisational regulations. They often contain a competence matrix defining the competences of each management level and the decisions that need approval by the board or even shareholders.

Such division of competence is – together with board composition, quorum requirements, etc. – also reflected on a contractual level in the SHA.
Neither the organisational regulations nor the SHA are required to be made publicly available in Switzerland; only the articles of association.
Our above comments regarding stock corporations also largely apply to LLCs.

On 1 January 2023, Switzerland saw a general corporate law reform enter into force. The aim of the reform was to modernise corporate governance by strengthening (minority) shareholder rights and, for listed companies, promoting gender equality in boards of directors and in senior management. Furthermore, the new law facilitates company formation, makes capital rules more flexible (e.g. allows for capital to be denominated in certain foreign currencies) and partially amends the rules on corporate restructurings.

Do private equity investors and/or their director nominees typically enjoy veto rights over major corporate actions (such as acquisitions and disposals, business plans, related party transactions, etc.)? If a private equity investor takes a minority position, what veto rights would they typically enjoy?

If a private equity investor holds a minority of the voting rights, its veto rights usually depend on the stake held: while a small investor (up to 20%) normally enjoys only fundamental veto rights aimed at the protection of its financial interest (dissolution, pro rata right to capital increases, no fundamental change in business, maximum leverage, etc.), investors holding a more significant minority stake (20–49%) usually also have veto/influence rights regarding important business decisions and the composition of senior management. The exit rights for private equity investors holding a minority position are usually heavily negotiated.

Are there any limitations on the effectiveness of veto arrangements: (i) at the shareholder level; and (ii) at the director nominee level? If so, how are these typically addressed?

At shareholder level, veto rights may be created by introducing high quorums for certain shareholders' decisions in the articles of association and the SHA. Such veto rights are generally regarded as permissive, provided the arrangement does not lead to a blockade of decision-taking in the company per se.

At board level, individual veto rights of certain board members cannot be implemented based on the articles of association or other corporate documents. However, such individual veto rights are regularly incorporated in the SHA; i.e. the parties agree that the board shall not take certain decisions without the affirmative vote of certain nominees. A board decision taken in contradiction to such contractual arrangement would still be valid but may trigger consequences under the SHA. Furthermore, directors are bound by a duty of care and loyalty vis-à-vis the company. If abiding by instructions given by another person based on contractual provisions leads to a breach of such duties, the board member may not follow such instructions and will likely not be in breach of the SHA (at least if the latter is governed by Swiss law).

Are there any duties owed by a private equity investor to minority shareholders such as management shareholders (or vice versa)? If so, how are these typically addressed?

Purely from its position as a shareholder, in principle, a private equity investor does not have such duties; shareholders of a Swiss stock corporation do not have any duty of loyalty.

However, directors, officers and management have a duty of care and loyalty towards the company and, to a certain extent, also to the minority shareholders. Under special, limited circumstances, a private equity investor or an individual acting for it may be regarded as de facto/shadow director of the company and, consequently, also be bound by such duties. The claim that a shareholder or one of its representatives is a shadow director might be successfully made if such person has de facto acted as an officer of the company, e.g. by directly taking decisions that would actually be within the competence of the board, etc.

Are there any limitations or restrictions on the contents or enforceability of shareholder agreements (including (i) governing law and jurisdiction, and (ii) non-compete and non-solicit provisions)?

SHAs are common in Switzerland and are normally governed by Swiss law. The parties are largely free to determine the rights and duties but there are certain limitations. The most important are:

• an SHA may not be unlimited in time/valid during the entire lifetime of the company, but may have a maximum term of ca. 20–30 years; and
• as per mandatory corporate law, directors must act in the best interests of the company (duty of care and loyalty), which may hinder the enforcement of the SHA if its terms would conflict with such duties.

An SHA is only enforceable against its parties. There is a debate in Swiss legal doctrine as to what extent the company itself may be party to an SHA and be bound by its terms. While a majority acknowledges that the company may fulfil some administrative duties, entering into further obligations is questionable.
Non-compete obligations of the shareholders in favour of the company are typically enforceable if the respective shareholders are (jointly) controlling the company. Furthermore, non-compete obligations need to be limited to the geographical scope and scope of activity of the company.
To secure share transfer provisions of the SHA, the parties often deposit their shares with an escrow agent under a separate share escrow agreement. Sometimes, SHAs also provide for penalty payments in case of breach.

Are there any legal restrictions or other requirements that a private equity investor should be aware of in appointing its nominees to boards of portfolio companies? What are the key potential risks and liabilities for (i) directors nominated by private equity investors to portfolio company boards, and (ii) private equity investors that nominate directors to boards of portfolio companies?

On a practical note, at least (i) one person with individual signatory power residing in Switzerland, or (ii) two individuals with joint signatory power both residing in Switzerland, must be able to fully represent the company (entry into the commercial register). It is not necessary that such persons are board members (but, e.g., managers). Additional individual or collective signatory rights may also be granted for persons residing outside Switzerland.

Directors, officers and managers of the company (including nominees of the private equity investor) have a duty of care and loyalty towards the company and must safeguard the (sole) interest of the portfolio company, even if such interest is contrary to the interest of the appointing private investor. Under special, limited circumstances, a private equity investor or an individual acting for it may be regarded as a de facto/shadow director of the company and, consequently, also be bound by such duties. To prevent such a scenario, decisions should solely be taken by the competent bodies.

Further, directors, officers and managers may be held liable in case of non-payment of certain social security contributions and taxes by the company.

How do directors nominated by private equity investors deal with actual and potential conflicts of interest arising from (i) their relationship with the party nominating them, and (ii) positions as directors of other portfolio companies?

In the case of a conflict of interest, the concerned director must inform the other board members and abstain from participating in the respective discussion and decision-making process. In typical Swiss private equity set-ups with one or few financial sponsor(s) that are each represented on the board, issues related to conflicts of interest are of limited relevance in practice.

What are the major issues impacting the timetable for transactions in your jurisdiction, including antitrust, foreign direct investment and other regulatory approval requirements, disclosure obligations and financing issues?

If certain turnover thresholds are met, a Swiss merger filing must be made. Unless the Competition Commission ("CC") decides to initiate a four-month phase II investigation, clearance is granted within one month (phase I) after filing the complete application. Phase I may be extended by one additional month and phase II by an additional two months. It is strongly recommended that a draft filing be submitted for review by the Secretariat (which usually takes one month) to make sure that the filing is complete (thereby triggering Phase I) and not rejected as incomplete 10 days after filing. From 2027 onwards, transactions will be assessed under the stricter "Significant Impediment to Effective Competition" ("SIEC") test (instead of the previous dominance plus test). As a result, procedures may take more time and the CC may ask for remedies more often to clear a transaction.

Acquisitions by foreign state-owned investors in certain critical sectors must be reported to the State Secretariat for Economic Affairs ("SECO") once the new foreign direct investment regulations take effect (expected in mid-2027). Upon receipt of the complete notification, SECO will decide within 1 month (Phase I) whether to initiate a three-month long Phase II.

For transactions regarding certain industries, governmental approvals must be obtained (e.g. financial institutions, telecoms, etc.). The impact on the timetable depends on the respective regulation and on the authorities involved.

Other than that, practical timing constraints such as setting up a NewCo (ca. 10 days) are similar to other European jurisdictions.

Have there been any discernible trends in transaction terms over recent years (i.e., trends in terms of regulatory approval)?

During the past two to three years, the Swiss M&A market has become less seller-friendly, with transaction processes generally being less competitive. As a result, there has been a shift from highly seller-friendly share purchase agreements towards more balanced arrangements. This is reflected in the more frequent use of purchase price adjustment mechanisms and earn-out provisions, as well as more balanced liability regimes and covenant packages.

From a regulatory perspective, while Switzerland has not seen a fundamental overhaul of its merger control regime, there is a noticeable trend towards increased scrutiny and longer review timelines, particularly in transactions involving sensitive sectors or significant market shares. Parties are therefore placing greater emphasis on:

• clear allocation of regulatory risk, including more detailed "hell or high water" or reasonable best-efforts clauses;
• long-stop dates that better reflect potentially extended approval timelines; and
• conditions precedent tailored to specific regulatory approvals.

In addition, there is a growing awareness of foreign investment control developments internationally, which can indirectly affect Swiss transactions with cross-border elements, leading to more complex approval processes and deal structuring considerations.

As a general observation, Swiss share and asset purchase agreements still tend to be significantly shorter than their US or UK counterparts, reflecting Switzerland's civil law framework.

What particular features and/or challenges apply to private equity investors involved in public-to-private transactions (and their financing) and how are these commonly dealt with?

Anyone who acquires equity securities that, when added to equity securities already owned, exceed the threshold of one-third of the voting rights (irrespective of whether these voting rights are exercisable) of a Swiss listed company, is obliged to make a public tender offer for all listed equity securities of the company (mandatory tender offer), barring exemptions granted by the Swiss Takeover Board. The target company may, however, have either increased such threshold in its articles of association to a maximum of 49% of the voting rights (opting up), or completely excluded the obligation to make an offer (opting out).

Further, anyone who reaches or exceeds certain thresholds of the voting rights in a Swiss listed company (the lowest triggering threshold is 3%) is obliged to make a notification to the company and the stock exchange (disclosure obligation).

Moreover, to carry out a statutory squeeze-out or a squeeze-out merger subsequent to a public tender offer, the bidder must hold at least 98% (for a statutory squeeze-out) or 90% (for a squeeze-out merger) of the voting rights of the target company. Voluntary tender offers are regularly made subject to a minimum acceptance condition, which, however, does normally not exceed two-thirds of the target company's shares (depending on the circumstances, the Takeover Board may grant exemptions). Thus, the bidder can typically not structure the offer in a way to exclude the risk of ending up holding less than 90% and, consequently, not being able to squeeze out the remaining minority shareholders. In practice, however, bidders reach squeeze-out levels in most Swiss public acquisitions.

What deal protections are available to private equity investors in your jurisdiction in relation to public acquisitions?

The bidder and the target company can agree on break fees unless the fee payable by the target company will result in coercing shareholders to accept the offer or deter third parties from submitting an offer. As a rough rule of thumb, break fees should not considerably exceed the costs in connection with the offer. The Swiss Takeover Board usually accepts break fees of less than 2% of the transaction value. The parties must also disclose such agreements in the offer documents.

In addition, block trades secure an improved starting position and decrease the likelihood of a competing bid (although disclosure obligations must be complied with). An alternative would be tender obligations from major shareholders. These would, however, not be binding in the event of a competing offer.

What consideration structures are typically preferred by private equity investors (i) on the sell-side, and (ii) on the buy-side, in your jurisdiction?

In the seller-friendly market of more than three years ago, the locked-box purchase price mechanism (with leakage protection) was used in a majority of the transactions. In the last two years, we have seen a shift to more balanced agreements, including with respect to purchase price mechanics; the locked-box mechanism, generally preferred on the sell-side, and NWC/Net Debt adjustments, based on closing accounts, preferred on the buy-side, are now equally common in Switzerland.

What is the typical package of warranties / indemnities offered by (i) a private equity seller, and (ii) the management team to a buyer?

Usually, a customary set of representations and warranties ("R&W") is granted by a private equity seller and co-selling managers, which is not materially different from what strategic sellers offer. Quite often, tax indemnities are seen.

If warranty and indemnity ("W&I") insurance is taken out, claims can only be brought against the latter.

What is the typical scope of other covenants, undertakings and indemnities provided by a private equity seller and its management team to a buyer?

Typically, the parties agree on non-compete and non-solicitation obligations for a period of one to three years.

To what extent is representation & warranty insurance used in your jurisdiction? If so, what are the typical (i) excesses / policy limits, and (ii) carve-outs / exclusions from such insurance policies, and what is the typical cost of such insurance?

W&I insurance has become quite common in Switzerland.
Usually, a W&I insurance policy will usually not cover: (i) liabilities arising from known facts, matters identified in the due diligence ("DD") or information otherwise disclosed by the seller; (ii) forward-looking warranties; (iii) certain tax matters, e.g. transfer pricing and secondary tax liabilities; (iv) pension underfunding; (v) civil or criminal fines or penalties where insurance cover may not legally be provided; (vi) post-completion price adjustments and non-leakage covenants in locked-box deals; (vii) certain categories of warranties, e.g. environmental warranties or product liability; and (viii) liabilities arising as a result of fraud, corruption or bribery.

What limitations will typically apply to the liability of a private equity seller and management team under warranties, covenants, indemnities and undertakings?

The liability for breaches of R&W is typically subject to a de minimis amount (depending on deal size) and a threshold amount (often approximately 1% in mid-cap transactions), as well as a cap in the range of 10–30%. Title and tax representations are often not subject to such limitations.
Managers are only liable in proportion to their shareholding.

Do (i) private equity sellers provide security (e.g., escrow accounts) for any warranties / liabilities, and (ii) private equity buyers insist on any security for warranties / liabilities (including any obtained from the management team)?

Escrows to secure R&W are not uncommon; in particular, in case of multiple sellers (e.g. when a large number of managers are co-sellers).

How do private equity buyers typically provide comfort as to the availability of (i) debt finance, and (ii) equity finance? What rights of enforcement do sellers typically obtain in the absence of compliance by the buyer (e.g., equity underwrite of debt funding, right to specific performance of obligations under an equity commitment letter, damages, etc.)?

Typically, in relation to the equity portion, the private equity fund provides an equity commitment letter that may be enforced by the seller (obliging the private equity fund to provide the NewCo with the necessary funds). The debt portion is usually comforted by binding financing term sheets, interim loan agreements or similar. In the context of public transactions, the availability of funds must be confirmed by the review body before the launch of the offering.

Are reverse break fees prevalent in private equity transactions to limit private equity buyers' exposure? If so, what terms are typical?

Reverse break fees are relatively rarely seen in private equity transactions; sellers often insist on actual financing proof (see above).

What particular features and/or challenges should a private equity seller be aware of in considering an IPO exit?

A private equity seller should be aware of the following features and challenges for a company going public:

• Lock-up: typically, existing shareholders holding more than 3% of the share capital prior to the offering, as well as the members of the board of directors and the executive management, will be required by the underwriters to sign lock-up undertakings of six to 18 months after the initial public offering ("IPO"). Therefore, SHAs among private equity investors and agreements with directors and managers should provide for respective undertakings.
• Drag-along rights: SHAs should also include drag-along rights to ensure that there are sufficient shares to be sold in the secondary tranche.
• Incentive plans: private equity-owned companies often implement equity-based management incentive plans, which should already anticipate a potential listing of the company (e.g., termination of the plan at listing, accelerated vesting, lock-ups).
• Corporate governance: private equity-owned companies will have to adapt their corporate governance regimes in order to make the company fit for an IPO (including amendments to the articles of association, board composition, internal regulations, executive compensation, etc.).
• Regulation: as in most jurisdictions, Swiss law and the listing rules of the SIX Swiss Exchange provide for additional obligations of a public company (e.g. obligations regarding financial reporting, compensation of the board of directors and the senior management, ad hoc announcements, disclosure of major shareholdings, disclosure of management transactions, and obligations regarding transparency on non-financial matters such as Environmental, Social, and Governance ("ESG")). These obligations require additional resources within the company and the support of external specialists.
• Liability: the liability regime and exposure in connection with an IPO is different to a trade sale. While in a trade sale, the liability of the seller(s) is primarily contractual (i.e. under the SPA) and, therefore, subject to negotiation, the main liability risk in an IPO results from the statutory prospectus liability (including potential criminal sanctions). However, since the company going public is primarily responsible for preparing the prospectus, the sellers' exposure under this statutory regime is, in most cases, limited. In addition, the underwriters typically require the selling shareholder(s) to also make some limited representations in the underwriting agreement, and it is advisable that these are agreed early in the process.
• Full exit: a full exit at the listing, i.e. a sale of all shares held by the private equity seller, is typically not possible via an IPO. Therefore, the private equity seller will need to sell the remaining shares gradually or in one or more block trades after the lock-up has expired.

What customary lock-ups would be imposed on private equity sellers on an IPO exit?

Existing shareholders holding more than 3% of the share capital prior to the offering, as well as the members of the board of directors and the executive management, will typically be required by the underwriters to sign lock-up undertakings of six to 18 months after the IPO. Therefore, SHAs among private equity investors and agreements with directors and managers should provide for respective undertakings.

Do private equity sellers generally pursue a dual-track exit process? If so, (i) how late in the process are private equity sellers continuing to run the dual-track, and (ii) were more dual-track deals ultimately realised through a sale or IPO?

This is heavily dependent on the general market conditions. If an IPO is considered, dual-track processes are often seen. However, if an IPO is not the preferred route from the outset, companies often tend to initiate a trade sale (auction) process. Dual-track processes are being pursued until very late in the process, although parties try to make their final decision before the intention to float is published. Preferably, the timelines for both tracks are aligned so that the analyst reports and investor feedback on the IPO track are available simultaneously with the binding offers on the trade sale track. This allows the decision on the track to be made once there is a relatively clear view on the valuation.

Please outline the most common sources of debt finance used to fund private equity transactions in your jurisdiction and provide an overview of the current state of the finance market in your jurisdiction for such debt (including the syndicated loan market, private credit market and the high-yield bond market).

Private equity investors usually provide financing in the form of subordinated loans. In leveraged buyouts, investors typically use senior and junior debt in the form of credit facilities provided by financial institutions. In the context of acquisitions, debt providers usually require that existing debt is refinanced at the level of the acquisition debt providers. Security released in connection with the refinancing typically serves as collateral for the new acquisition financing. The ability of Swiss target group companies to provide collateral is limited under Swiss law due to Swiss corporate law restrictions. Upstream and cross-stream security may only be granted if certain prerequisites are met, and only for the amount of the relevant Swiss company's freely distributable reserves.

Despite the challenging macro-environment marked by global conflicts and economic uncertainty, Switzerland remains a desirable debt-financing market due to its economic and political stability. However, as in other jurisdictions, the debt-financing market is not as vigorous as in the past years and legal practitioners have observed a slight increase of recovery cases. Moreover, the failure of Credit Suisse and the merger into UBS has ignited a trend to propose stricter regulations of regulatory capital requirements. At the moment, interest rates remain low; the Swiss National Bank's key policy rate was confirmed at 0.00% in March 2026.

Are there any relevant legal requirements or restrictions impacting the nature or structure of the debt financing (or any particular type of debt financing) of private equity transactions?

Certain limitations on leverage result from the thin capitalisation rules applied by Swiss tax authorities with respect to related-party debt. Additionally, interest paid on amounts of debt provided by shareholders exceeding certain thresholds may be requalified as a hidden dividend if paid to a shareholder or a related party of a shareholder. Consequently, such interest would not be tax-deductible and subject to 35% dividend withholding tax. The Swiss tax authorities publish maximum safe haven interest rates for intercompany loans on an annual basis. Higher interest rates can be justified with a third-party test.

Furthermore, there are restrictions on Swiss companies granting loans or providing security that are of an upstream or cross-stream nature (see question 8.1 above).
In order to avoid interest withholding tax of 35%, financing of a Swiss acquisition company must comply with the so-called "10/20 non-bank rules". While interest paid on loans is generally not subject to Swiss withholding tax, withholding tax applies to interest payments on bonds (at a rate of 35%). According to guidelines of the Swiss tax authorities, a loan is considered a bond if either the aggregate number of non-bank lenders (including sub-participations) exceeds 10 under financing arrangements with identical terms, or if the aggregate number of non-bank lenders of a Swiss borrower exceeds 20. Against this background, transfer restrictions and other Swiss 10/20 non-bank rules-related language must be incorporated into the relevant loan document (such additional language is also known as "Swiss finish").

What recent trends have there been in the debt-financing market in your jurisdiction?

Despite the challenging macro-environment marked by global conflicts and economic uncertainty, Switzerland remains a desirable debt-financing market due to its economic and political stability. However, as in other jurisdictions, the debt-financing market is not as vigorous as in the past years and legal practitioners have observed a slight increase of recovery cases. Moreover, the failure of Credit Suisse and the merger into UBS has ignited a trend to propose stricter regulations of regulatory capital requirements. At the moment, interest rates remain low; the Swiss National Bank's key policy rate was confirmed at 0.00% in March 2026.

How prevalent is the use of continuation fund vehicles or GP-led secondary transactions as a deal type in your jurisdiction?

Because private equity funds are typically not structured as Swiss collective investment schemes, these types of transactions are not commonly seen in Switzerland as a fund jurisdiction. However, GP-led secondaries and stapled transactions are also extended to Swiss investors from time to time.

Are there any particular legal requirements or restrictions impacting their use?

See above. Where Swiss investors are targeted in GP-led secondary transactions, the Swiss fund marketing regime may need to be considered (cf. see also section 11 below).

What are the key tax considerations for private equity investors and transactions in your jurisdiction? Are off-shore structures common?

Switzerland is not known as a very attractive location for the establishment of private equity funds, mainly due to the Swiss withholding tax (Verrechnungssteuer) and securities transfer tax (Umsatzabgabe) regimes. Therefore, private equity funds are typically established in jurisdictions such as Cayman Islands, Guernsey, Jersey, Luxembourg or Scotland, but also Germany, Liechtenstein or the Netherlands.

Private equity acquisitions in Switzerland are mainly performed by NewCo acquisition vehicles (holding company) from jurisdictions with which Switzerland has concluded a double taxation treaty and which foresee a 0% Swiss withholding tax for a qualifying (generally a minimum of 10% shareholding) dividend distribution from a Swiss company. The entitlement for a withholding tax reduction requires sufficient substance and beneficial ownership of the shareholder in the Swiss target.
For financing considerations, see question 8.2 above.

Have there been any significant changes in tax legislation or the practices of tax authorities (including in relation to tax rulings or clearances) impacting private equity investors, management teams or private equity transactions and are any anticipated?

The substance of foreign acquisition companies is important in order to benefit from a Swiss dividend withholding tax reduction under a double tax treaty. Thus, a diligent set-up and advance tax ruling confirmation are recommended, particularly as a future buyer will generally inherit the current Swiss withholding tax situation under the so-called "old reserve" regime, if the Swiss target has distributable reserves and the target group has excess cash that could be distributed before closing, and address such withholding tax risks in the purchase price determination. Under the OECD's multilateral instrument, Switzerland has opted to apply a principal purpose test, which should, however, not change the currently applied practice. A recent anti-abuse practice may result – in certain cases – in non-refundable Swiss withholding tax on dividends by the Swiss target in cases where the Swiss acquisition company is held by a fund/non-treaty shareholder and is financed with intercompany debt/capital contribution reserves, which can be repaid without withholding tax (so-called "extended international transposition"). Economic reasons for the Swiss acquisition company may help and should be confirmed in an advance tax ruling.

Further, Swiss tax authorities tend to scrutinise tax-exempt capital gains for selling managers, in particular within five years (see question 10.2 above). Earn-out arrangements for sellers continuing to work for the target or non-compete agreements may partly qualify as taxable income for the Swiss resident seller and should be structured carefully. It is important to also note that similar payments by related parties (instead of by the target company itself) could qualify as (taxable) salary, which is generally subject to social security contributions on the level of the employee and the Swiss employer as well as wage withholding tax, if applicable.
In February 2026, the Swiss Federal Tax Administration updated its securities transfer tax practice for employee participation plans. Share transfers involving Performance Share Units ("PSU") or Restricted Share Units ("RSU") are now exempt from the securities transfer tax.

For groups within scope of the OECD Pillar Two rules (consolidated revenue of at least EUR 750 million), Switzerland applies a Qualified Domestic Minimum Top-up Tax from 1 January 2024 and an Income Inclusion Rule from 1 January 2025, which should be factored into structuring and modelling. In late 2025, the OECD Inclusive Framework agreed on a Simplified Effective Tax Rate ("ETR") Safe Harbour (available from fiscal years beginning on or after 31 December 2026) and extended the Transitional Country-by-Country Reporting ("CbCR") Safe Harbour by one year. This reduces the compliance burden with the Pillar Two framework.

What are the key tax-efficient arrangements that are typically considered by management teams in private equity acquisitions (such as growth shares, incentive shares, deferred / vesting arrangements)?

From a Swiss tax point of view, "genuine" employee shares (i.e. participation instruments that qualify for dividend rights and liquidation proceeds) are generally more favourable, compared to instruments, which qualify as "non-genuine" employee participations (such as synthetic bonus schemes, phantom shares that are taxed upon realisation/exercise). Options for shares are taxed upon exercise or sale. The acquisition of shares at fair market value ("FMV") does not lead to taxable income. A capital gain on the sale of shares that have been acquired at FMV by a Swiss resident manager will generally qualify for a tax exemption. However, the determination of FMV is often difficult for non-listed shares and as a fall-back, a formula value can be applied as approximate for the FMV. The formula value, once chosen, must generally be applied for the entire duration of the employee share incentive plan. There are no specific tax reliefs or tax provisions for management share participations if shares are acquired below FMV (formula value), except for blocking period discounts (close to 6% per blocking year for a blocking period of up to 10 years with a maximum discount of 44.161%). The taxable income at acquisition is calculated as the difference between the (reduced) FMV of the shares and the price at which they are sold to the employee (if the latter is lower). A capital gain on the sale to a third party of shares that have been acquired at formula value, by a Swiss resident manager, more than five years ago, will generally qualify for a tax exemption. Otherwise, only the increase in the formula value at the time of sale is tax-free, whereas an excess profit is deemed taxable salary. A sale before the expiration of a blocking period may result in a taxable salary in the amount of the remaining blocking period discount applied at the FMV (formula value) at that time.

What are the key tax considerations for management teams that are selling and/or rolling over part of their investment into a new acquisition structure?

Swiss-resident managers generally try to achieve a tax-exempt capital gain upon the sale of privately held shares. In order not to qualify as salary (like synthetic bonus schemes), the managers should have full ownership rights (dividend, liquidation, voting rights). A tax-neutral roll-over is generally not possible. Whether the sale of shares under a management participation qualifies as a tax-exempt capital gain or as taxable salary is a case-by-case decision, since preferential terms (like sweet equity) or an investment at a formula value could lead to (partial) taxable salary for the managers upon sale and social security charges for the manager as well as the Swiss employer (as well as wage withholding tax, if applicable). Thus, it is recommendable to confirm the consequences of a specific management participation in an advance tax ruling (Swiss social security authorities generally follow the Swiss employment income tax treatment).

Have there been any significant legal and/or regulatory developments over recent years impacting private equity investors or transactions and are any anticipated?

Fundraising among prospective investors in Switzerland is materially governed by the Financial Services Act ("FinSA") and the Collective Investment Schemes Act ("CISA"). The FinSA/CISA regime is closely integrated with general financial instruments regulations and enables the offering of foreign investment funds, including private equity funds, to a relatively broad audience of qualified investors (including, for instance, regulated financial institutions, but also large corporates, occupational pension schemes and companies with professional treasury operations, as well as certain high-net-worth individuals and their investment structures on an opting-out basis) without having to seek approval of the fund by the Swiss Financial Market Supervisory Authority ("FINMA"). Furthermore, no licensing or supervision requirement applies to distributors of collective investment schemes. However, activities in or into Switzerland, aimed at the purchase of fund interests by Swiss prospective investors, may qualify as a "financial service" under the FinSA and may trigger specific point-of-sale duties and other regulatory requirements, even if conducted on a cross-border basis from abroad into Switzerland.

On 1 March 2024, a revision of the CISA came into force, by which a new Swiss fund category, the so-called "Limited Qualified Investor Fund" ("L-QIF") was introduced. The L-QIF is exempt from the requirement to obtain authorisation and approval from FINMA and does not have any specific limitations regarding the investment universe and risk diversification. However, the L-QIF may only be managed by certain institutions supervised by FINMA, which ensures a level of indirect supervision while preserving a faster time to market and cost efficiency on the product level. As such, the L-QIF is broadly comparable to similar unregulated fund categories in known fund jurisdictions (such as a Luxembourg reserved alternative investment fund). This could increase Switzerland's competitiveness as a fund jurisdiction in the future.

Transparency regulations for beneficial owners of companies and other types of legal entities, previously adapted as of November 2019, are once again the subject of a revision adopted by the Swiss parliament on 26 September 2025 to further strengthen the Swiss regime for the prevention of money laundering and combating the financing of terrorism. While the identification of beneficial owners currently takes place between the relevant company and its shareholders, the new legislation will establish a federal register of beneficial owners (as it already exists in other Financial Action Task Force ("FATF") Member States). All Swiss companies, as well as foreign companies with a branch office, real estate or de facto administration in Switzerland, must identify their beneficial owners and notify their personal data to the transparency register. Shareholders and beneficial owners must cooperate and provide the necessary information. While the register will not be publicly accessible, it will, e.g., be available to be consulted by financial intermediaries that have know-your-customer obligations under the Anti-Money Laundering Act. By the same legislative proposal, anti-money laundering ("AML") regulations will be extended to not only apply to financial intermediaries but also various service providers (particularly legal advisers) where they provide specific services associated with a risk of money laundering, such as incorporating or (advising on) transferring non-operating entities or in connection with real estate transactions (again in line with FATF recommendations). Where applicable, lawyers, as well as other service providers, will be required to diligently identify their clients and, if applicable, their clients' representatives and beneficial owners, and comply with further obligations under AML regulations. The new legislation is expected to enter into effect in the second half of 2026 and particularly larger companies must notify their beneficial owners to the transparency register within a few months from that date.

Are private equity investors or particular transactions subject to enhanced regulatory scrutiny in your jurisdiction (e.g., on national security grounds)?

Switzerland is expected to implement the Investment Screening Act ("ICA") in mid-2027. However, the ICA will only cover acquisitions of control over Swiss companies (active in critical sectors) by foreign state-owned investors (not by private investors). The aim is to protect public order and security while Switzerland remains open to foreign investments. Accordingly, private equity investors are subject to a filing under the ICA only if they are state-controlled and if the target is active in a critical sector.
Furthermore, sector-specific restrictions apply regarding foreign control over Swiss regulated entities, such as banks or securities firms.

Are impact investments subject to any additional legal or regulatory requirements?

At a supervisory level, FINMA's strategic priorities previously focused heavily on sustainability-related financial risks to both financial institutions and the broader financial system. Looking ahead, its strategic goals for the period 2025–2028 have shifted towards strengthening confidence in Switzerland's financial centre and promoting long-term financial stability through preventive, risk-based supervision. In that context, the FINMA Circular 2026/1 on "Nature-related financial risks" is relevant, although it does not establish an impact investment-specific regime. Rather, it introduces risk-management expectations for banks and insurers in relation to climate-related and other nature-related financial risks, which may have an indirect effect on private equity transactions where such regulated institutions are involved.

In the context of funds, ESG and impact investment-related regulation is being developed primarily through industry self-regulation. The key frame of reference for the Swiss industry bodies is the corresponding EU regulation.

How detailed is the legal due diligence (including compliance) conducted by private equity investors prior to any acquisitions (e.g., typical timeframes, materiality, scope, etc.)?

The legal DD usually covers the following areas: corporate; financing agreements; business agreements; employment; real property/lease; IP/IT; data protection; and litigation. The handling of compliance and regulatory matters depends on the specific case. Typically, an external legal counsel is engaged to conduct a red flag legal DD of two to four weeks' duration.

Has anti-bribery or anti-corruption legislation impacted private equity investment and/or investors' approach to private equity transactions (e.g., diligence, contractual protection, etc.)?

In DD as well as transaction agreements, a focus on compliance of target companies with anti-bribery, anti-corruption and economic sanctions has increased in over the years.

Are there any circumstances in which: (i) a private equity investor may be held liable for the liabilities of the underlying portfolio companies (including due to breach of applicable laws by the portfolio companies); and (ii) one portfolio company may be held liable for the liabilities of another portfolio company?

Under special, limited circumstances, a private equity investor or an individual acting for it may be regarded as a de facto/shadow director of the company and, consequently, be bound by directors' duties (see question 3.6 above).

A private equity investor that (solely or jointly) controls a portfolio company that has infringed competition law could be made jointly and severally liable for paying the resulting fine. While it is possible that a portfolio company may be made liable for the liabilities of another portfolio company, this is a less likely scenario. See also section 12 below.

Under normal circumstances, it is highly unlikely that a portfolio company will be liable for another portfolio company.

What other factors commonly give rise to concerns for private equity investors in your jurisdiction or should such investors otherwise be aware of in considering an investment in your jurisdiction?

In April 2014, the European Commission imposed a €37 million fine on Goldman Sachs ("GS") for antitrust breaches committed by a portfolio company that was formerly owned by its private equity arm, GS Capital Partners. GS and the portfolio company were held jointly and severally liable for the fine. GS was held liable on the basis that it exercised decisive influence over the portfolio company, although GS was not alleged to have participated in, been aware of or facilitated the alleged cartel in any way. Even though in Switzerland no such precedents in relation to private equity companies exist so far, it is possible that the Swiss CC could follow the European Commission's line of thinking. In Switzerland, holding companies tend to be found to be jointly and severally liable for the antitrust fines of their subsidiaries. Private equity investors should, therefore, implement a robust compliance programme in their portfolio companies to avoid antitrust law infringements.

ICLG – Private Equity 2026, 12th Edition