Alternative Funds 2020

Last Updated October 13, 2020


Law and Practice


Meyerlustenberger Lachenal AG is one of the most reputable international business law firms in Switzerland. Over 100 experienced and dynamic lawyers form a strong team of specialists who stand for innovative and solution-focused services. With offices in Zürich, Geneva, Zug, Lausanne and Brussels, the firm is present in the key Swiss economic centres and the heart of Europe. Its Chinese and Latin American desks are a gateway to and from these regions. The key areas of practice in relation to the investment funds sector are fund structuring; drafting/adapting legal product documentation for Swiss purposes; compliance; drafting/negotiating investment management agreements; applications to the Swiss Financial Market Supervisory Authority (FINMA) for licences; applications to FINMA for approval of domestic and foreign funds; advice regarding Swiss distribution rules, including training for new market participants; listing of exchange-traded funds; listing of structured products; enforcement procedures; and updates on legal developments.

Managers of Alternative Funds

Switzerland is home to several of the world's significant alternative investment managers. Furthermore, most of the top-class managers domiciled in other jurisdictions, have a presence in Switzerland as a major European financial centre. The country attracts this business thanks to its political stability, highly developed and reliable infrastructure, as well as its large pool of talented professionals.

There are currently 229 licensed asset managers of collective investment schemes in Switzerland, according to the list published by FINMA as of 16 September 2020. This does not, however, provide an accurate reflection of the number of managers of alternative products. This is because no distinction is made between the managers active in the alternative business and those devoted only to traditional investing. Also, market participants holding a more encompassing licence, such as a bank or a securities dealer licence, are also allowed to manage investment funds.

Alternative Fund Domicile

Switzerland currently has 116 funds that fall into the categories of "real-estate funds" and "other funds for alternative investments".

Compared to its competition in on and offshore jurisdictions, Switzerland is often considered a less attractive place to establish the fund itself. This is mainly due to taxation considerations which are not optimal for foreign investors. The alternative funds set up in Switzerland are therefore mainly targeted at Swiss investors. See 2.11 Tax Regime.


Switzerland is home to many large institutional investors from the banking and insurance sectors, pension funds and large corporations. Furthermore, this small country is notorious for attracting wealthy individuals along with their fortunes and family offices. In short, the country is highly ranked as a fundraising destination.

The most common form of alternative fund established in Switzerland is the real estate fund. This type of product is actually treated as a separate fund category. Other types of Swiss alternative funds are less common although there are some private equity, venture capital and various types of hedge funds set up within the jurisdiction. Current trends such as lending and crypto-asset funds are not as popular in Switzerland as in other jurisdictions, not only due to the tax environment but also because all Swiss funds need to obtain the approval of the Swiss regulator, FINMA. Nevertheless, Switzerland is an active centre for the portfolio managers of diverse alternative strategies.

Open-End Alternative Funds

There are two forms of regulated Swiss open-end collective investment schemes (regardless of whether they invest in traditional or alternative assets).

The first is a contractual fund with no legal personality (FCP), and the second is a corporate fund in the form of an Investment Company with Variable Capital (SICAV). Both FCPs and SICAVs are subject to the same investment rules. They are both divided into "fund categories", based on their investment strategy.


The most common and flexible categories for open-end Swiss alternative investment funds are the so-called "other funds for alternative investments" and "real estate funds".

Depending on the overall strategy and asset allocation, it is also possible to structure a vehicle investing in alternatives as a fund for "traditional investments".

"Securities funds" (the Swiss equivalent of the European Undertakings for Collective Investment in Transferable Securities – UCITS) have even been used to pursue an alternative strategy. However, in such a case, it is very challenging to meet the strict investment restrictions imposed by the legislation on these vehicles.

Closed-End Vehicles

Regulated alternative funds can also be set up as closed-end structures. The Collective Investment Schemes Act of 23 June 2006, as amended, (CISA) provides for a Limited Partnership for Collective Investment Schemes and a Company with Fixed Capital. There is a further (unregulated) investment vehicle that can be used for alternative investments: the Investment Company.

Limited Partnership for Collective Investment (LPCI)

The LPCI is basically structured as a typical limited partnership as used in all common fund jurisdictions. Its sole purpose is collective investment, primarily in venture capital. Investments in companies or projects can take the form of equity capital, lending or mezzanine financing. Permitted investments generally include real estate development and infrastructure projects.

Investments in LPCIs are open to qualified investors only (as described in 4.3 Rules Concerning Marketing of Alternative Funds). LPCIs do not have legal personality, but can enter into obligations and exercise their rights, as a company with legal personality can.

At least one partner’s liability is unlimited (the general partner). Only a Swiss corporation can act as the general partner. The other investors' (limited partners) liability is limited to the amount of their contribution to the partnership. There are currently 22 registered LPCIs in Switzerland.

Company with Fixed Capital (SICAF)

Not a single SICAF has been established in Switzerland at this time. For this reason, this structure will not be addressed in detail.

(Unregulated) Investment Company (IC)

Finally, ICs can be established for investments in alternative assets. Such companies are subject only to the applicable company rules in the Swiss Code of Obligations (CO). To remain out of scope of CISA, the following conditions need to be met:

  • the shares must be listed on a Swiss stock exchange; or
  • only registered shares are issued; and
  • investment is restricted to qualified investors.

If these conditions are not fulfilled, the company falls within the scope of the (regulated) SICAF.

Based on the information available regarding listed ICs, they are most used for investment in private equity, hedge funds, venture capital and real estate vehicles. No information is publicly available for unlisted ICs.

Regulation of the Funds (Product Regulation) and Supervision

All regulated alternative Swiss funds as described in 2.2 Fund Structures are subject to:

  • the Swiss Collective Investment Schemes Act (CISA);
  • the Swiss Collective Investment Schemes Ordinance (CISO); and
  • the FINMA Swiss Collective Investment Schemes Ordinance (FINMA-CISO).

They need to be approved by FINMA and remain supervised by the regulator for their entire life cycle. This entails, in particular, ongoing documentation and reporting obligations.

Only the unregulated Investment Company is not subject to these rules, but exclusively to the CO.

Permitted Investments and Investment Techniques

Open-end alternative funds

As mentioned, the two common categories for "truly" alternative investments for FCPs and SICAVs are "other investment funds for traditional investments" and "other investment funds for alternative investments".

Both of these categories can invest in equity, funds, money market instruments, call and time deposits of up to 12 months, precious metals, derivatives and structured products with varied underlyings.

The investment techniques permitted for other funds for traditional investments include:

  • loans of up to 25% of the net assets;
  • pledging or transfer as collateral of up to 60% of the net assets; and
  • commitment to an exposure of up to 225% of the net assets.

They can engage in short selling.

Other investment funds for alternative investments provide the most flexibility and minimal diversification requirements. Further to the above, they may also invest in all kinds of commodities, raw materials and their respective certificates.

Permitted investment techniques include:

  • loans of up to 50% of the net assets;
  • pledging or transfer as collateral of 100% of the net assets; and
  • commitment to an exposure of up to 600% of the net assets.

They can also engage in short selling.

FCPs and SICAVs also take the form of real estate funds. They may invest, in particular, in real estate, real estate companies, interests in real estate funds and real estate assets abroad. The use of derivatives is permissible, subject to limitations. As security for loans, real estate funds may not encumber their real assets on average for an amount exceeding one third of their market value.

Closed-end alternative funds

LPCIs are closed structures intended for investment in venture capital, private equity, real estate and infrastructure projects, and "other alternative investments". The applicable legislation does not provide for restrictions on the investment techniques, so they are set out in the fund documents, subject only to approval by FINMA. These vehicles are not very common and have been used mainly for real estate and real estate development.

As mentioned, there are no SICAFs, even though this form of closed-end fund is a theoretical alternative to setting up an alternative investment vehicle.

The permissible investments for "other funds" described above apply also to SICAFs. However, CISA does not include particular investment restrictions or techniques regarding SICAFs.

Accordingly, as for LPCIs, such rules need to be included in the fund documents, subject only to approval by FINMA.

Alternative funds can, in principle, originate loans. However, there are currently only two approved Swiss lending funds.

There are various reasons for this. Firstly, all Swiss funds must go through the FINMA approval process regardless of their nature. Approval processes can be avoided in other jurisdictions. Furthermore, as the case may be, such funds may be deemed to trigger a banking licence if they accept public deposits in excess of CHF100 million, engage in advertising to this effect or substantially refinance themselves through third-party banks.

Finally, due to limitations foreseen in dedicated legislation on consumer credit, they cannot lend directly to consumers.

No Swiss fund investing in cryptocurrencies has yet been approved in Switzerland, although the wording of the applicable legislation on investments in alternative assets would, in theory, permit it. Until now, the projects submitted to FINMA have not been deemed to meet the high investor protection standards (particularly with respect to custody) expected by the regulator. Foreign funds investing in crypto-assets can nevertheless be offered in Switzerland if the marketing rules generally pertaining to foreign funds are complied with. Finally, it is noteworthy that the first Swiss asset manager of foreign cryptocurrency funds was granted a licence by FINMA two years ago.


At the present time, all Swiss funds that can invest in alternative assets are regulated by FINMA, with the notable exception of investment companies as described in 2.2 Fund Structures.

Going forward, a new form of unregulated Swiss fund, the Swiss "Limited Qualified Investor Fund" will be available. However, the relevant draft legislation is currently still not approved by parliament. Refer to 2.19 Anticipated Changes for more information on this new development.

Timing of Licensing Process

The time it takes to obtain approval for any of these funds can vary greatly depending on the workload of FINMA, the complexity of the project and the sophistication of the parties involved. It is common for an approval process to take between three and six months.

However, with respect to special standardised applications (so-called "fast-track" processes), funds open only to qualified investors are to be automatically approved upon submission – except for funds in the category "other funds for alternative investments", for which approval takes four weeks. Nevertheless, since these deadlines only begin to run once FINMA is satisfied with the documentation provided, the approval process usually takes longer than the foreseen deadlines.

Only a Swiss fund management company or a Swiss self-managed corporate fund vehicle may be entrusted with the (overall) management of the relevant collective investment scheme. Nevertheless, portfolio/investment management can then be delegated by the manager to an appropriately regulated entity in Switzerland or abroad. The terms of the delegation are subject to FINMA approval. In particular, the Swiss auditor of the Swiss alternative fund must not be hindered in its tasks by the delegation of the portfolio management abroad. Furthermore, if required by the delegated foreign country's laws, an agreement on the automatic transmission of information must be entered into between FINMA and the relevant regulator.

The effective management of Swiss funds must in all cases remain in Switzerland. This means that the most important decisions regarding the funds must be made in Switzerland.

The fund management company must be in the form of a Swiss corporation. In order to ensure that management functions can be exercised at all times, the equivalent of at least three full-time employees (each with joint signatory powers with another employee) must be appointed. They must live somewhere that will allow them to carry out their duties as representatives of the fund management company on an ongoing basis. Practically, this means that they need to reside in Switzerland or very close to Switzerland, eg, in a neighbouring country, close to the Swiss border.

As regards the LPCI, the General Partner may only be a Swiss corporation.

As mentioned above, irrespective of these requirements, certain tasks can be delegated abroad, eg, portfolio management (see 2.7 Requirement for Local Investment Managers).       

Contractual funds and SICAVS must in all instances enter into an agreement with a custodian for the fund's assets. Only a Swiss bank licensed under the Swiss Banking Act can be appointed in such capacity. Self-managed funds, the fund management company and the custodian may all, subject to FINMA's approval of the set-up, make use of the services of other providers (eg, IT) both in Switzerland and abroad under their own responsibility and, generally, in compliance with Swiss law (in particular regarding data protection.)

The main requirement for a foreign service provider concerns foreign natural persons marketing funds in Switzerland either in their own name or on behalf of a foreign non-regulated entity. Such people will need to be registered in a Swiss client adviser register according to the new Swiss Financial Services Act. Furthermore, in some instances, an affiliation with an ombudsman in Switzerland is required. More information is provided in 4.3 Rules Concerning Marketing of Alternative Funds.

Swiss FCPs, SICAVs and LPCIs are fiscally transparent. The income from the net assets of these funds is directly attributed to investors.

There are two exceptions to this regime: funds that directly hold real estate are liable to income tax and annual capital tax for the income and net assets of such real estate; they remain transparent with respect to other assets and income.

Distributions made by tax-transparent Swiss collective investment schemes (CISs) are subject to Swiss withholding tax (35% rate). However, no withholding tax applies on distributions consisting of capital gains or income from real estate assets that are directly held. Swiss investors may claim a refund of withholding tax if they declare the income in their annual tax return.

Non-resident investors may qualify for an exemption from Swiss withholding tax under the affidavit procedure that is applicable to Swiss CISs that generate at least 80% foreign-sourced income.

Moreover, SICAFs are fiscally opaque entities – ie, subject to income and annual capital taxes like corporations. Distributions are subject to 35% withholding tax.

However, as mentioned previously, SICAFs do not presently play a significant role in the Swiss fund industry.

In general, tax transparent funds (SICAVs, contractual funds and LPCIs) do not qualify for benefits under double-tax treaties concluded by Switzerland, since these funds are fiscally transparent and not considered as resident. Exceptions apply where Switzerland and the contracting state have signed a bilateral agreement to extend treaty benefits to alternative funds on the basis of which the Swiss funds are entitled to a (full or partial) reduction or refund of foreign withholding taxes on behalf of the Swiss tax-resident investors holding interest in the fund. SICAFs and non-regulated investment companies that are incorporated in Switzerland are entitled to double-tax treaty protection like any Swiss tax-resident companies.

Swiss alternative funds in corporate form may use subsidiaries to hold different investments. This may, in some cases, serve tax optimisation purposes.

The promoters and sponsors of Swiss alternative funds are mainly Swiss (with a few exceptions) The large Swiss banks and pension funds play the leading role. This is because large foreign players seek to reach an international investor base for which the Swiss tax regime applicable to foreign investors in Swiss funds is not advantageous (stamp duty and withholding tax).

The investor base is mainly Swiss for the same reasons as described in 2.14 Origin of Promoters/Sponsors of Alternative Funds. Further to those mentioned there, large Swiss corporations, Swiss HNWIs and family offices do invest in such products.

Swiss alternative funds make worldwide investments.       

A major trend in Switzerland, and worldwide, is currently environmental, social and governance (ESG) considerations in all aspects of projects. This is, in particular, driven by the adaptation of ESG standards in the EU and the high demand by investors for ESG products. Alternative credit in different forms is also picking up speed, but not at the rate seen in other jurisdictions. AI and digitalisation technology projects are even more visible, particularly as a result of the COVID-19 pandemic.

Open-End Funds

FCPs and SICAVs must issue a prospectus, of which, investment regulations are usually an integral part. The minimum content of the prospectus is now provided in an appendix to the Swiss Financial Services Ordinance (FINSO), whereas the information to be included in the fund regulations is provided in CISA.

FINMA must approve the fund regulations of the FCP and the SICAV as well as the articles of incorporation of the SICAV. FINMA may waive all or some of the disclosure requirements when the fund is open only to qualified investors.

Furthermore, any alternative fund that may be offered to retail investors (which, in any case, excludes LPCIs and ICs) requires a "key investor document" (KID) as now foreseen in the Swiss Financial Services Act (FINSA). For open-end funds established prior to the change of legislation, there is a transitional period until 31 December 2020 during which they can continue to use their existing "simplified prospectus" or "key investor information document" (KIID).

Closed-End Funds

LPCIs must submit the partnership agreement/prospectus to FINMA for approval. Its content requirements are to be found in CISA. A SICAF is also required to issue a prospectus with its articles of incorporation and fund regulations. Both LPCIs and SICAFs are subject to FINMA approval. As mentioned, there are currently no SICAFs registered by FINMA and, accordingly, they are factually of no practical relevance in the Swiss alternative fund landscape.

Since LPCIs are not open for investment to retail investors, no KID is required. However, if a SICAF were ever established, the rules above pertaining to the issuance of a KID would apply.

Foreign Funds

Alternative foreign funds can only be marketed to qualified investors as defined in the revised CISA.

Under the old CISA, appointing a Swiss representative and a paying agent was required, except to market to regulated institutional investors.

Furthermore, the offering and marketing documents needed to include specific disclosure regarding, in particular, the Swiss representative and the paying agent, the country of origin of the fund, the place of performance and jurisdiction, and information on the payments of retrocessions and rebates.

Although FINSA has done away with these appointment and disclosure rules (except when marketing to HNWIs), last-minute transitional provisions have been included in FINSO. As a result, until the fund marketer is fully compliant with the new FINSA conduct and organisational rules, these (old) obligations continue to apply. The transitional period ends upon compliance with the relevant new FINSA rules, which must be implemented by 31 December 2021 at the latest.


Based on FINSA, all financial services providers, including fund distributors and advisers must disclose in advance to the client any payments they receive from third parties (such as the manager of the fund) in connection with this activity. Unless the client provides a waiver, it is entitled to claim the amount of the retrocessions paid to the financial services provider.


Swiss funds must generally issue and provide FINMA with (unaudited) semi-annual reports within two months of the end of the first half of the business year. Audited annual reports are to be prepared and filed with FINMA within four months of the end of the business year. Furthermore, open-end funds must publish the net asset value of their shares at regular intervals. There are numerous additional reporting obligations to FINMA concerning changes to the approved organisation of the fund, changes pertaining to the persons in management, and to the fund documents. Many of these changes require approval from FINMA before they can be implemented. Finally, publications on the platform chosen by each fund are required as a means to inform investors.


An initiative for a new Swiss unregulated fund to be included in CISA was launched in June 2019. The dispatch with the Bill was issued on 19 August 2020 and now needs to be addressed by parliament. The draft legislation would allow the establishment of a new category of Swiss fund, the "Limited Qualified Investors Fund" (L-QIF), which would not require FINMA approval and would be the first Swiss unregulated vehicle of its kind to qualify as a fund. The draft provides for a wide range of investment categories. This is a welcome potential addition to the Swiss fund products on offer. Time to market would decrease substantially, which would allow Switzerland to become more competitive as a fund domicile. Nevertheless, the Bill currently foresees that only a Swiss-registered fund management company can manage the vehicle. Also, withholding tax issues affecting foreign investment have not been addressed. It is anticipated that the new legislation could come into force in January 2022 at the earliest.

Swiss fund management companies are required to be established as a Swiss law corporation. The same applies to General Partners of LPCIs.

A self-managed SICAV (fund and fund management company in one entity) is a special form of combined Swiss law corporation, according to the CO, with special provisions (particularly pertaining to variable capital) in CISA. SICAFs (although none has yet been established) have a similar legal structure: a corporation according to the CO with special provisions foreseen in CISA. Unregulated ICs are usually established as Swiss law corporations.

Swiss fund management companies are subject to an extensive licensing process by FINMA. It is one of the most comprehensive licensing processes there is and is comparable with those of securities firms. The company must demonstrate that it fulfils all the legal requirements set out in the Swiss Financial Institutions Act (FINIG). The scope of the process includes satisfying legal requirements and FINMA expectations pertaining to internal organisation, irreproachable business conduct, governance, capital, capital adequacy, segregation of assets, etc. The fund management company is subject to ongoing extensive prudential supervision by FINMA based on regular reporting and audits.

There is no specific tax treatment available to management companies, partners or employees. Swiss management companies are subject to corporate income tax on their net profit at federal, cantonal and communal level. They may also be subject to tax on their net equity at cantonal and communal level. There is no specific tax treatment available to management companies. They may need to register as a securities dealer for transfer stamp taxes if they are regularly trading in securities. There is no registration duty for fund management companies that predominately trade in derivatives, commodities, real estate or precious metals. Registration as a securities dealer for stamp taxes implies reporting obligations towards the Swiss tax authorities.

Funds established outside Switzerland can be managed by a Swiss management company without creating a significant permanent establishment risk for the fund.

However, the fund may become liable for Swiss withholding tax if the legal substance is predominantly Swiss (board members are mostly Swiss-resident and meetings are held in Switzerland).

There is no particular tax treatment. Carried interest is subject to ordinary corporate and personal income tax.

Nevertheless, managers that invest their private wealth in alternative funds can earn tax-exempt capital gains on their investments.

Managers may outsource some of their investment functions and business operations. See 2.7 Requirement for Local Investment Managers to 2.10 Requirements for Non-local Service Providers.

See 2.7 Requirement for Local Investment Managers to 2.10 Requirements for Non-local Service Providers.

No Swiss fund can be managed from outside Switzerland. However, certain functions, including asset/portfolio management, can be delegated to foreign managers under certain conditions. See 2.7 Requirement for Local Investment Managers to 2.10 Requirements for Non-local Service Providers.

There is substantial appetite for alternative funds among investors in Switzerland. Investor interest in such funds continues to increase, especially in light of the poor returns in several forms of traditional investments. The negative interest rate environment in particular is adding to the search for higher yields, even if this results in taking higher risks.

Banks and other asset managers looking for better returns for their clients will consider allocations to alternative funds within the limits of their client mandate. Swiss pension funds are currently allocating to more alternatives, hoping to compensate for insufficient yields within the scope of the legal restrictions applicable to them. Large Swiss companies as well as HNWI also invest in this asset class themselves or through family offices. It is important to point out that this substantial interest does not particularly focus on Swiss products. Much of Swiss investors' allocation to alternative products flows into funds established outside of Switzerland.


This depends on the chosen fund structure. Open-end Swiss alternative funds (contractual funds and SICAVs) may, based on their approval by FINMA, be made available to all (including retail) investors. However, FINMA may grant exemptions to the manager, particularly pertaining to risk diversification requirements, if the circle of investors is voluntarily limited to qualified investors.

LPCIs, SICAFs and ICs are only open to qualified investors.

Foreign alternative funds can only be marketed to qualified investors and the limitations mentioned in 2.18 Disclosure/Reporting Requirementsapply.

Client Segmentation

The marketing rules differ according to the qualification of the client.

Under these new rules, the following are deemed qualified investors:

Institutional investors:

  • financial intermediaries pursuant to the Banking Act dated 8 November 1934, the Financial Institutions Act dated 15 June 2018 or the Collective Investment Schemes Act;       
  • insurance companies as defined in the Insurance Supervision Act;       
  • foreign clients subject to prudential supervision, such as the persons listed above;
  • central banks; and
  • a national or supranational public entity with professional treasury.

Other professional investors:       

  • public entities with professional treasury;
  • pension funds or other institutions that serve the purpose of an occupational benefits scheme with professional treasury;
  • companies with professional treasury;
  • large companies;        
  • private investment structures with professional treasury established for HNW retail clients that have requested in writing to be treated as a professional investor (opt-out);       
  • HNWIs who have requested in writing to be treated as a professional investor (opt-out); and       
  • a retail client for whom discretionary asset management or investment advisory services are being provided based on a long-term written asset management or investment advisory agreement with a regulated financial intermediary as listed above, or with a foreign asset manager subject to equivalent prudential supervision which has not declared that it does not want to be treated as a qualified investor.

Clients that are not listed as institutional or professional investors are considered to be retail investors.

Swiss Alternative Funds

New conduct and organisational rules generally apply to the provision of financial services to end clients. Fund intermediation falls within the scope of financial services according to FINSO.

The relevant conduct rules include, in particular:

  • providing information on the financial services provider to the client;
  • performing suitability and appropriateness tests;
  • documentation and reporting obligations; and
  • (as the case may be) best execution obligations.

These conduct rules do not apply to marketing to institutional investors. Furthermore, professional investors can waive some of these obligations. This is not, however, the case for marketing to retail investors.

Some of the relevant organisational rules include (to the extent applicable):

  • appropriate internal organisation of the service provider;
  • having sufficiently well-trained staff;
  • appropriate handling and disclosure of conflicts of interest; and
  • compliance with applicable disclosure and waiver rules related to compensation from third parties (retrocessions).

Transitional Rules

A transitional period has been foreseen for financial service providers to implement these conduct and organisational rules until 31 December 2021.

Until these new provisions have been implemented, the prior regime under the old CISA, including the conduct rules (in particular the loyalty obligation, duty of care, information obligations), the obligation to keep records of the needs of the clients and the reason for recommending a particular fund, as well as the implementation of self-regulation of the Swiss Funds and Asset Management Association (SFAMA) on distribution of funds, continue to apply.

The transition to the new rules above, can take place at any time prior to 31 December 2021. For Swiss financial service providers, the auditors need to be notified of the date of the regime switch.

Foreign Alternative Funds

Persons and entities marketing foreign alternative funds in Switzerland must comply with the same FINSA conduct and organisational rules described above within the same timeframe and with the same option to implement the changes earlier (transitory rules). However, until the new conduct and organisational rules are implemented, further old regime rules continue to apply, and the obligation to appoint a Swiss representative and paying agent when marketing only to qualified investors, as defined above, remains in place temporarily. Once the new system is implemented, this obligation will no longer exist, except if marketing to HNWIs. In the latter case, the old regime is maintained. The SFAMA is currently working on adapting self-regulation to these changes.

Client Adviser Register

Under FINSA, any natural person providing financial services (eg, fund mediation to end clients) in Switzerland qualifies as a client adviser (regardless of whether any advice is provided). This applies both for independent marketers and for those employed by a company offering such services. 

All client advisers who do not act on behalf of a prudentially supervised financial institution in Switzerland, must register with a new adviser register in Switzerland in order to market funds. Client advisers acting on behalf of a prudentially supervised financial institution abroad are exempt from registration if they limit their marketing efforts in Switzerland to professional investors.

Based on the applicable transitional rules, such a registration, when required, must take place by 19 January 2021.

Affiliation with an Ombudsman Office

All financial service providers active in Switzerland (even from abroad) must become affiliated with a Swiss ombudsman office to ensure clients are able to make use of mediation proceedings in the event of a disagreement or conflict. This affiliation must take place by 23 December 2020, based on the applicable transitional provisions. In the meantime, a new Bill in parliament appears likely to exempt foreign service providers who do not deal with retail investors from such an affiliation. If effectively passed, this change will, however, only come into force after the end of the transitional period (first half of 2021).

Local investors may invest in alternative funds in Switzerland. Retail investors may, however, only invest in those alternative funds which are open to them.

Refer to 4.3 Rules Concerning Marketing of Alternative Funds with respect to registration as a client adviser and affiliation with an ombudsman office.

Refer to 2.18 Disclosure/Reporting Requirements with respect to required disclosures to investors.

Transparent Funds

The income earned by transparent funds, whether distributed or accumulated, is generally subject to ordinary income tax at the level of the investors holding the units as private assets. To the extent that the fund income derives from capital gains, it is tax-exempt if disclosed separately in the fund accounts or distributed by a separate coupon. The profits from direct (Swiss or foreign) real estate investments by the funds are also tax-exempt. Capital gains realised upon the sale of units/participations in a collective investment scheme (CIS) are tax-exempt.


Private individuals holding the fund units in a CIS as business assets, as well as legal entities, are subject to income taxes for any income realised by a transparent CIS, excluding income from direct (Swiss or foreign) real estate income.

Contractual Funds, SICAVs or LPs

Private individuals holding fund units in contractual funds, SICAVs or LPs, as private or business assets, are subject to cantonal and communal net-wealth taxes. The fund units are valued at current market values.


Dividend payments by a SICAF to investors domiciled in Switzerland are subject to income taxes, just like dividends paid by any corporation. A dividend relief can apply to substantial interest/participations exceeding 10%. The dividend amount is then only partially (70%) subject to tax. Corporate investors may benefit from the participation-exemption regime.


The agreement between Switzerland and the United States on co-operation to simplify the implementation of FATCA came into force on 2 June 2014. The corresponding implementation Act has been in force since 30 June 2014.

FATCA implementation in Switzerland is based on Model 2, which means Swiss financial institutions disclose account details directly to the US tax authority with the consent of the US clients concerned. Where US clients do not give their consent, the United States has to request this data through normal administrative assistance channels.

Since 20 September 2019 – when the protocol of amendment to the double-taxation agreement between Switzerland and the USA came into force – FATCA group requests can be made for cases dating from 30 June 2014.

On 8 October 2014, the federal council approved the mandate for negotiations with the United States on switching to Model 1, which provides for the automatic exchange of information. It is still unknown at the present time when there will be a corresponding agreement.


The legal basis for CRS came into force on 1 January 2017. Switzerland usually implements CRS according to the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). Switzerland has concluded more than 100 agreements.

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Law and Practice


Meyerlustenberger Lachenal AG is one of the most reputable international business law firms in Switzerland. Over 100 experienced and dynamic lawyers form a strong team of specialists who stand for innovative and solution-focused services. With offices in Zürich, Geneva, Zug, Lausanne and Brussels, the firm is present in the key Swiss economic centres and the heart of Europe. Its Chinese and Latin American desks are a gateway to and from these regions. The key areas of practice in relation to the investment funds sector are fund structuring; drafting/adapting legal product documentation for Swiss purposes; compliance; drafting/negotiating investment management agreements; applications to the Swiss Financial Market Supervisory Authority (FINMA) for licences; applications to FINMA for approval of domestic and foreign funds; advice regarding Swiss distribution rules, including training for new market participants; listing of exchange-traded funds; listing of structured products; enforcement procedures; and updates on legal developments.

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