Joint Ventures 2025 Comparisons

The most significant current geopolitical and economic factor affecting Switzerland is the US administration and its foreign policy, which has a direct impact on the Swiss economy. The Swiss economy is also heavily dependent on developments in Europe. The current economic slowdown in the EU will also have longer-term consequences for the Swiss economy. Additional key market drivers include inflation, interest rates and the ongoing war in Ukraine. As a result of these economic uncertainties, fewer joint ventures (JVs) involving foreign companies have been established, particularly involving large Swiss companies.

However, despite these global challenges, the Swiss JV market demonstrated resilience in 2024. In any case, and for the whole Swiss economy, interest rates remain a key factor, especially in relation to JV financing. Should rates not decrease further, JV parties may increasingly rely on internal funding or adopt structures that are less dependent on liquidity.

The construction industry (eg, in relation to building a second road tunnel through the Swiss Alps), industrial projects, research and financing are key for JVs in Switzerland. Industries such as retail and, in recent years, fintech also frequently engage in JVs. Generally, JV structures in Switzerland are chosen in situations where the parties rely on each other’s specific (market) knowledge, skills and/or assets to pursue a mid- to long-term business collaboration.

Swiss law does not provide for a specific legal definition or set of laws governing JVs, but the concept is legally well recognised, and the general rules for contracts and companies set forth in the Swiss Code of Obligations (CO) apply. This liberal framework allows partners to structure their undertaking according to their needs.

JVs are generally established in two main forms: corporate JVs or contractual JVs.

Corporate JV

In a corporate JV, the parties operate through a separate legal entity, which is typically structured as a Swiss corporation (Aktiengesellschaften (AG) or sociétés anonymes (SA)) or, less commonly, as a Swiss limited liability company (Gesellschaft mit beschränkter Haftung (GmbH)/Société à responsabilité limitée (Sàrl)).

A corporate JV has the following advantages.

• Separate legal entity: A corporate JV becomes a separate legal entity under Swiss law. This status enhances the JV’s stability and facilitates smoother interactions with third parties. External parties often prefer dealing with a familiar legal structure, which is particularly advantageous for cross-border JVs or when seeking direct financing from banks and lenders.
• Limited liability: Each JV party’s liability is limited to the amount of capital it has subscribed to the JV company. Swiss courts rarely pierce the corporate veil; liability protection is robust. However, third parties may require JV parties to guarantee the JV company’s obligations, particularly in early-stage undertakings. Furthermore, the insolvency of a JV company may still affect the reputation of the JV parties.
• Enhanced flexibility for change of JV parties/exit: In a JV company, the transfer of shares to a new owner is a relatively simple process, despite there being specific Swiss formalities to adhere to. The JV company’s corporate governance may be set up to allow for a smooth and rapid change of JV parties (including adding additional partners), and also with a view to a full or partial exit.

The disadvantages are as follows.

• Higher administrative costs: Establishment costs (drafting of agreements, notarisation and registration) are usually comparable with those of a contractual JV, but operating a corporate JV often involves higher (recurring) administrative costs. This is mainly because of ongoing corporate-related costs, such as those associated with maintaining a board of directors, annual shareholders’ meetings, book-keeping and (if necessary or desired) auditors.
• Formalities to adjust JV structure: A JV company must at all times comply with Swiss corporate law’s specific minimum legal requirements regarding share capital, organisational structure and governing bodies. Changes to these aspects usually require a formal procedure and may include the amendment of the articles of association and the registration of such changes with the Commercial Register. If the JV entity is eventually to be terminated (not just sold), it must undergo a formal liquidation process.
• Taxation: The JV company will be treated as an independent taxable entity, which may have tax implications and may result in additional tax complexities (double taxation). It is subject to corporate income tax and capital tax applicable at its domicile, whereas tax rates vary between municipalities.

Contractual JV

A contractual JV relies on a contractual arrangement between the participating parties, accompanied by a series of ancillary agreements on an as-needed basis. It generally qualifies as a simple partnership (einfache Gesellschaft/société simple) under Swiss law. Unlike a corporate JV, this is not a distinct legal entity; instead, the JV parties operate collectively as a group directly in the market.

Note that JVs formed as general partnerships (Kollektivgesellschaft/Société en nom collectif) are not common in Switzerland. This is mainly because Swiss law prevents legal entities from becoming general partners.

A contractual JV has the following advantages.

• Simplicity and reduced administrative costs: Establishing a contractual JV is generally less complex and involves fewer administrative procedures than establishing a separate legal entity. This simplicity can result in cost savings during the start-up phase.
• Flexibility in structure: Contractual JVs offer greater flexibility in structuring the partnership. The terms and conditions can be tailored to the specific needs of the parties involved, allowing for more customised arrangements.
• Easy termination: Termination of a contractual JV is often less complicated and more straightforward than the formal liquidation process required for corporate JVs.
• Confidentiality and control: Since no separate entity is created, each party may have more control over its proprietary information and intellectual property (IP), making it easier to maintain confidentiality.
• Shared resources and expertise: The contractual JV allows the parties to pool their resources and expertise for a specific project or venture while maintaining their autonomy outside of the collaboration.
• Limited long-term commitment: Contractual JVs are well suited for projects with limited timeframes or specific objectives, as they allow the parties to work together for a defined period without committing to a long-term relationship.
• Faster start-up: Because of its simpler nature, a contractual JV can be established more quickly, allowing the parties to begin their joint activities without significant delay.

The disadvantages are as follows.

• Lack of a separate legal entity: A contractual JV does not create a separate legal entity, but usually a simple partnership. This may negatively impact market perception and, in particular, complicate the raising of funds from outside sources, such as banks or investors, because there is no separate legal entity with a track record to present to potential financiers.
• Limited liability protection: Unlike a corporate JV, where liability is typically limited to the amount of share capital invested, a contractual JV may not provide the same level of liability protection. In principle, each party remains directly liable for JV debts and may even become jointly liable for debts incurred by the other party on behalf of the JV.
• Potentially complex governance: Contractual JVs rely solely on the terms of the agreement between the parties. Without a formal corporate structure, decision-making processes and governance may be less clear, with a higher risk of disputes or inefficiencies.
• Reduced long-term stability: Contractual JVs are typically appropriate for short-term or project-specific collaborations. If the parties intend to enter into a long-term partnership, a corporate JV may provide more stability and permanence.
• Potential exit challenges: Even though terminating a contractual JV may in principle be more straightforward, ending the collaboration and resolving any remaining obligations between the parties may be cumbersome (in particular because the items that a partner has contributed to the simple partnership do not automatically revert to the respective partner in an exit; see 8.1 Ownership and Use of IP). The exit scenario should therefore be carefully considered and reflected in the JV’s contractual framework.
• Limited transferability of interests: The transfer of ownership interests or shares is often more complicated than in a corporate JV, where the transfer of shares is often more streamlined.

The choice of JV structure depends primarily on the specific requirements of the parties involved. For projects of limited duration and scope, a contractual JV is often preferred due to its ease of establishment and adaptability. On the other hand, for long-term collaborations, in situations where the JV needs to interact directly with external parties or where limited liability is an important consideration, the more formal structure of a corporate JV is typically preferred.

When deciding on the appropriate form of a JV in Switzerland, it is essential to thoroughly evaluate the following aspects:

• formation and termination – careful consideration should be given to the procedures for establishing and terminating the JV;
• liability of the JV partners – the extent of liability of the JV partner(s) should be clearly understood and assessed;
• corporate governance structure – the division of power amongst the JV partners is a key element;
• confidentiality – the issue of confidentiality of the JV partners’ information and operations requires careful attention;
• tax implications – the tax aspects of the JV, including its structure and operations, must be considered, particularly for cross-border JVs; and
• flexibility – the degree of flexibility offered by the chosen form of JV should be evaluated to ensure that it is consistent with the project’s objectives and potential future developments.

Competition Commission

Based on the nature of the JV and its potential impact on competition, the Swiss Competition Commission may have a role in reviewing and approving the JV from an antitrust perspective.

Swiss Financial Market Supervisory Authority (“FINMA”)

If the JV engages in financial activities such as banking, insurance or securities trading, it may fall under the regulatory oversight of FINMA. FINMA supervises and regulates financial markets and institutions in Switzerland.

Commercial Register Office

The Commercial Register is maintained by the cantonal authorities. A corporate JV must be registered with the competent Commercial Register; otherwise, it may qualify as a contractual JV. The Commercial Register office ensures transparency and (to some extent) compliance with legal requirements. Most of the information to be shared with the Commercial Register for registration purposes will be publicly available.

Main Statutory Provisions

Code of Obligations

Various provisions of the CO are relevant when establishing JVs. Key provisions include:

• simple partnership (Articles 530–551);
• corporation (Articles 620–763); and
• limited liability company (Articles 772–827).

Federal Act on Cartels

Key provisions include:

• unlawful agreements affecting competition (Article 5);
• unlawful practices by dominant undertakings and undertakings with relative market power (Article 7); and
• notification thresholds regarding merger control (Article 9).

Financial market regulations

To the extent applicable, key aspects of the financial market are governed by the Swiss Financial Market Infrastructure Act (“FinMIA”) and the Swiss Financial Market Infrastructure Ordinance (“FinMIO”).

There are no specific rules addressing anti-money laundering (AML) in a JV context. Nevertheless, the obligations in the Swiss Anti-Money Laundering Act (“AML Act”) apply to a JV if it qualifies as a financial intermediary or dealer who hold assets on behalf of others, or who assists in the investment or transfer of assets.

Individuals, including legal entities, who hold assets belonging to others or provide assistance in the management or transfer of such assets fall under the category of “financial intermediaries”, as defined by the AML Act. This includes activities such as credit transactions and electronic transfers. Compliance includes fulfilling due diligence requirements, such as identifying beneficial owners, and belonging to a self-regulatory organisation or being directly supervised by FINMA. The scope of financial intermediaries extends beyond banks and securities dealers to include those providing payment services or managing payment instruments.

Sanction Laws

Switzerland has a sanction regime in place based on the Federal Act on the Implementation of Sanctions (known as the “Embargo Act”). The State Secretariat for Economic Affairs maintains a publicly available list of sanctioned individuals and entities.

Lex Koller

Lex Koller (officially known as the “Federal Act on the Acquisition of Real Estate by Persons Abroad”) is a Swiss law that regulates the acquisition of real estate properties by foreign individuals and legal entities (companies) in Switzerland. It was enacted to control and limit the extent to which non-resident foreigners can purchase Swiss real estate. The law’s primary aim is to prevent speculative buying and to ensure that Swiss citizens have fair access to their country’s property market.

The law imposes restrictions on the acquisition of certain real estate by foreigners. In general, non-resident individuals and legal entities are subject to limitations/approval requirements when purchasing properties such as residential real estate and vacation homes. Different cantons (Swiss administrative regions) may have varying rules and regulations related to the implementation of Lex Koller. Therefore, if a JV contains real estate assets, a specific review on potential Lex Koller implications should be conducted early in the process. If the real estate is necessary for the JV’s business conduct, a government ruling may be obtained to waive the applicability of this legislation.

Foreign Direct Investment

Foreign direct investment (FDI) makes a significant contribution to Switzerland’s economy; therefore, Switzerland has been very open towards FDI and has not yet introduced a general structured framework for the systematic assessment of FDI. Currently, FDI control only applies to certain industries and sectors, particularly banking/securities and real estate, where prior government approval is required. A number of additional business activities require a licence from the authorities, including in the following fields: aviation, telecommunications, nuclear energy and radio/television. However, in recent years, Switzerland’s open policy has been questioned, and there are political initiatives to implement a more restrictive policy in the future. Government procedures to implement the Swiss Federal Act on the Control of Foreign Investments (the “Investment Control Act”; ICA) started back in 2018, with consultation on the first draft of the new law ending in September 2022. The consultation bill was rejected by most participants, and the Federal Council decided to undertake substantial revisions to this first draft, which shall be less cumbersome to businesses than the first proposal. The amended proposal was published in December of 2023 and focuses on the investments that are most critical to national security by investors that are directly or indirectly controlled by foreign states. The bill is now being discussed in parliament and is not expected to enter into force before 2026. However, once implemented, the Swiss ICA regulations (in their proposed form) are expected to become part of the typical due diligence process when implementing a Swiss JV. This will become relevant for sectors like defence equipment, electricity transmission and production, water supply, health, telecoms and transport infrastructure.

Again, from a competition law perspective, one has to distinguish between the main types of JVs, each of which is subject to different competition rules.

Corporate JV

These JVs operate as autonomous economic entities in the long term, performing all necessary functions independently. If the JV is a newly created entity, it often involves a transfer of business activities from at least one of the controlling companies to be subject to merger control. Notification to the Swiss competition authorities is required prior to implementation if both of the following thresholds are met (see Article 9 of the Swiss Federal Act on Cartels):

• the combined worldwide turnover of the undertakings concerned is at least CHF2 billion or the turnover in Switzerland is at least CHF500 million; and
• at least two of the undertakings concerned each have a reported turnover in Switzerland of at least CHF100 million.

Contractual JV

These JVs do not meet the criteria for full-function JVs and are assessed under the rules applicable to horizontal agreements. Transactions involving co-operative JVs may be notified prior to their implementation, pursuant to Article 49a of the Federal Act on Cartels.

The parties involved in a JV that is listed on a stock exchange must adhere to the relevant listing rules. In Switzerland, for instance, the SIX Swiss Stock Exchange mandates issuers to disclose relevant price-sensitive information (ad hoc publicity), along with other reporting requirements (in particular, financial reporting and regular reporting obligations). Depending on the circumstances, entering into a JV can trigger an ad hoc notification.

Furthermore, specific regulations may govern directors’ remuneration. These include prohibitions on certain types of remuneration (eg, “golden parachutes”) and the requirement for shareholders to vote on remuneration (say-on-pay).

See 3.6 Transparency and Ownership Disclosure for information on disclosure obligations under Swiss law.

Non-Listed Companies

A Swiss corporation (AG/SA) shall keep an up-to-date share register with information on its shareholders (direct beneficial owners) who have requested registration (note that such registration is not mandatory, but it is necessary for shareholders to effect voting rights at shareholder meetings). This share register is not publicly available.

This is also true for Swiss limited liability entities (GmbH/Sàrl). As a key difference, the quota holders (direct beneficial owners) must also be registered with the Commercial Register, thereby becoming public.

Furthermore, any person who, alone or by agreement with third parties, acquires shares in a Swiss company (corporation or limited liability entity) whose participation rights are not listed on a stock exchange – and thus reaches or exceeds the threshold of 25% of the share capital or right to vote – must within one month give notice to the company of the first name, surname and address of the natural person for whom it is ultimately acting (the ultimate beneficial owner; UBO). Based on such information, the board is obliged to keep a register of UBOs of the company. The register is not made public.

In May 2024, as part of the proposed new AML measures, the federal government proposed a new federal transparency register, in which companies need to enter information regarding their UBO. The register will not be publicly available. The bill is now being presented to parliament and is not expected to enter into force until 2026 at the earliest.

Listed Companies

If the JV company or a Swiss JV party is listed on a stock exchange, its shareholders must disclose a relevant participation as soon as such exceeds the 3% threshold (with further thresholds at 5%, 10%, 15%, 20%, 25%, 33.3%, 50% and 66.6%). This disclosure notification shall include the UBO and, if different, the direct shareholder. The information on significant shareholders is publicly available (for SIX Swiss Exchange listed entities, see the SIX Exchange Regulation’s website).

The reformed Swiss company law came into force on 1 January 2023. The main changes are greater flexibility in share capital and capital distributions, strengthening of shareholders’ rights to improve corporate governance and the digitalisation of shareholders’ meetings. From a corporate JV perspective, the following changes allow for greater structuring flexibility and facilitate the handling thereof:

• the allowance of interim dividend payments;
• share capital in certain foreign currency is permissible (USD, GBP, EUR and JPY) – note that accounting and financial reporting must then be done in the same currency as the share capital;
• the implementation of the capital band concept, which allows greater flexibility for capital increases and decreases within a predefined range during a maximum period of five years; and
• shareholders’ meetings may now be held:
1. in one or more different meeting venues;
2. by electronic means without a physical meeting venue (“virtual shareholder meeting”;
3. in a physical and virtual venue (“hybrid shareholder meeting”);
4. in a meeting venue abroad; and
5. in written circular form (on paper or in electronic form).

With effect from 1 January 2025, amendments to the Swiss CO and the Commercial Register Ordinance (“HRegV”) came into force, introducing changes to Swiss corporate law. In addition to amending certain bankruptcy and criminal law provisions, the legislator has taken up case law of the Swiss Federal Supreme Court on shell companies, rendering null and void any transfer of shares and quotas if the company is inactive and overindebted, and limiting the possibility of “opting out” (ie, waiving the requirement for a limited audit) only to future years.

Negotiating JV agreements can be a rather time-consuming and complex process, depending on the complexity of the envisaged structure. As a result, parties often outline key commercial terms in a term sheet or letter of intent. Those may include general directives on the parties’ envisaged structuring of a JV, including corporate governance principles.

While these terms are often non-binding with respect to the specifics of the JV, others are binding to govern the negotiation and diligence process. Examples of such binding rules include exclusivity, confidentiality obligations, cost sharing, the choice of applicable law and jurisdiction or a commitment to resolve disputes through arbitration.

If no listed entities are involved, there is in principle no legal obligation to disclose a JV. Nevertheless, parties often decide to provide such market information on a voluntary basis, mainly for marketing purposes (eg, by way of a press release previously aligned amongst parties).

If either of the JV parties or the JV itself is listed, the relevant listing rules apply. Under Swiss law, it is often permissible for a listed entity to inform the market upon signing/closing – ie, after the term sheet/letter of intent stage. This would need to be assessed on a case-by-case basis.

Obtaining necessary authority approval (eg, related to merger control) is usually necessary prior to establishing the JV.

Conditions Precedent

Under Swiss law, JV agreements typically provide for a number of conditions precedent (CPs) that must be fulfilled (or waived) prior to closing. These CPs are generally tailored to the specific transaction but commonly include:

• corporate approvals – internal approvals by the boards or shareholders of the JV partners;
• regulatory clearances – particularly competition law approvals (eg, from the Swiss Competition Commission) or, if applicable, sector-specific licences (eg, in banking, insurance or telecoms).
• third-party consents – such as change of control consents under material contracts, lease agreements or financing arrangements;
• contribution-related formalities – completion of any asset or share transfers to the JV vehicle, including notarisation or registration where required; and
• capital contributions – payment or transfer of initial capital (in cash or in kind) by the JV partners.

The satisfaction of these CPs can have a material impact on the timeline and feasibility of closing. Parties typically agree on a “long stop date” by which all CPs must be fulfilled.

Material Adverse Change

Material adverse change (MAC) clauses are quite sector-specific and less commonly used in JVs under Swiss law, as the legal framework allows significant contractual freedom in structuring the JV and allocating risks. However, as a direct consequence of COVID-19, MAC clauses have become more frequent and more heavily negotiated in Swiss JV agreements.

Force Majeure

Swiss law itself does not have a statutory definition of force majeure, but the concept is well recognised in Swiss case law as extraordinary, external events beyond the parties’ control that prevent or delay contractual performance and cannot be prevented by due care. Examples include natural disasters, war, civil unrest and other unforeseeable events.

Under Swiss contract law, parties have broad freedom to define what constitutes force majeure in their contract and to specify the consequences of such events, including the suspension or termination of obligations. Because of this contractual freedom, force majeure clauses are often tailored and explicitly included in JV agreements to allocate risks related to extraordinary events that could impact the venture’s operations or performance.

Common features in Swiss force majeure clauses include detailed definitions of events qualifying as force majeure, notification obligations and potential remedies like suspension of obligations or termination rights if the force majeure event continues for a specified period.

In practice, including a force majeure clause in Swiss JV agreements is prudent due to the potential operational risks the JV might face from unforeseeable external events. The clauses provide a clear framework for risk allocation and performance relief in case such events occur.

In Switzerland, JVs are most commonly structured as contractual JVs in the form of a simple partnership. This flexible and unregulated structure is widely used – especially in construction projects and temporary collaborations (commonly referred to as “ARGE” (Arbeitsgemeinschaft) in practice) – as it allows the parties to define their relationship contractually without the need for incorporation or capital requirements.

Alternatively, parties may choose an incorporated JV, typically using a stock corporation (AG/SA) or, less frequently, a limited liability company (GmbH/Sàrl), depending on the intended governance structure, liability regime and commercial purpose.

Concerning capital requirements, (i) a simple partnership does not require registration, a minimum capital contribution or a specific form, but it also lacks legal personality and subjects the partners to joint and several liability; (ii) a GmbH requires a minimum share capital of CHF20,000, fully paid in; and (iii) an AG requires a minimum share capital of CHF100,000, with at least CHF50,000 paid in at incorporation.

The documentation of a JV under Swiss law depends on the legal form chosen for the JV vehicle.

Contractual JVs

In the case of a contractual JV (eg, a simple partnership), the terms of the co-operation are typically set out in a JV agreement. This agreement governs the parties’ rights and obligations, profit and loss allocation, governance, contributions, confidentiality, non-compete clauses, dispute resolution and termination. Since no separate legal entity is formed, the JV agreement is the central and binding document.

Corporate JVs

Where a corporate JV is established (eg, as a Swiss stock corporation (AG/SA) or limited liability company (GmbH/Sàrl)), the relationship is documented in multiple layers:

• Articles of association (Statuten/statutes) – these are public and govern the fundamental corporate structure, including share capital, share classes, shareholder rights, general meeting procedures and board composition.
• Shareholders’ agreement/JV agreement – this is a private agreement between the JV parties that regulates their relationship beyond what is covered in the articles, and it typically contains detailed provisions on:
1. governance and control – board composition, quorum and voting rights, reserved matters and appointment rights;
2. capital contributions and future funding obligations;
3. profit distribution – dividend policy and preference rights (if any);
4. transfer restrictions – lock-up periods, rights of first refusal, tag-along and drag-along rights;
5. exit provisions – call/put options, IPOs or buyout mechanisms;
6. deadlock resolution mechanisms;
7. non-compete, confidentiality and IP arrangements; and
8. dispute resolution and governing law.
• Organisational regulations/board rules – optional internal documents that define the delegation of duties within the company and clarify the responsibilities between the board and management.

In all forms, the documentation must be carefully aligned with the chosen legal structure to ensure enforceability and consistency with mandatory Swiss corporate law.

Generally, the main objective when setting up the decision-making aspects of a JV entity is to duly reflect and balance the partners’ interests, level of participation and even the know-how they bring to the JV. This is usually done by way of specific regulations at the level of both the shareholders’ meeting and the board of directors. The potential for a deadlock situation and routes to avoid/handle such events shall be considered.

Shareholders’ Meeting

Since JV companies typically have a small number of shareholders, their meetings are commonly referred to as universal meetings – ie, all shareholders are present/represented. The unique feature of universal meetings is that shareholders can deliberate and make decisions on any agenda item without needing to fulfil the formal convening requirements that are typical of larger corporate meetings, such as an invitation period of 20 days.

Generally, the shareholder’s meeting passes resolutions with the majority of voting rights represented at the meeting, unless a higher quorum is provided for in the articles of association. By law, certain important matters require a majority vote with two-thirds of the present voting rights and the majority of the present nominal value of shares. Those important matters include:

• an amendment of the corporation’s purpose;
• the consolidation of shares, unless the consent of all the shareholders concerned is required;
• a capital increase subscribed from own capital, by contribution in kind or by setting-off claims, and the granting of special privileges;
• the creation of conditional contingent share capital, reserve capital or a capital band (authorised capital);
• the conversion of participation certificates into shares;
• any restriction on the transferability of shares;
• limitations on or cancellation of subscription rights;
• the introduction of preferential voting shares;
• a change of currency of share capital;
• the introduction of a casting vote for the chairperson at the shareholders’ meeting;
• provision of the articles of association on holding the general meeting abroad;
• the delisting of the equity securities of the corporation;
• merger, demerger, transformation or dissolution;
• the relocation of the registered seat;
• the introduction of an arbitration clause in the articles of association; and
• dispensing with the designation of an independent voting representative for conducting a virtual general meeting in the case of companies whose shares are not listed on a stock exchange.

In the interest of safeguarding the JV parties, the JV agreement may also incorporate provisions that ensure shareholders’ meetings are appropriately constituted only when all shareholders (ie, JV parties) are present. In addition, specific decisions deemed to be of critical importance (eg, dividend, liquidation, merger or changes to the capital structure) might require an elevated quorum, as stipulated in the agreement. The introduction of preferred voting shares is another option, but this is less common in Switzerland; generally, each share has one vote.

Board of Directors

Besides the shareholders’ meeting, the governance at board level is of importance. To strike the envisaged balance between the JV parties, the number of board representatives (each having one vote), the designation of the chairperson (potentially accompanied by a casting vote) and the quorum requirements for board resolutions are key factors. Often, certain important matters require an enhanced quorum or even unanimous resolutions.

Furthermore, JV companies encounter distinct governance challenges compared to public companies. While public companies may prioritise the prevention of self-dealing, the primary objective of a JV is to strike a balance between the goals of the JV itself and the individual objectives of its partners. This equilibrium may pose difficulties, especially when the JV’s founders have representatives on the board of directors who advocate for the founders’ interests. To address this, the implementation of independent committees and codes of conduct could help align and equalise the interests involved. Moreover, specialised committees can prove beneficial, particularly for JVs operating in the technology or manufacturing sectors, enabling them to focus on technical matters and efficiently resolve disputes pertaining to such issues.

Corporate JV

Once the corporate JV meets the minimum capital requirements and has sufficient assets to cover its share capital and statutory reserves, the JV parties have the flexibility to finance the venture with debt. Decisions to strike the right balance between equity and debt financing, as well as the determination of interest rates, are often influenced by tax considerations.

In scenarios where a thriving JV company evolves into a corporate group, it gains the ability to internally self-finance through strategic cash management. Such cash management involves the efficient utilisation and optimisation of funds owned by the group. Within the corporate group, specific companies may enjoy significant profitability and possess cash surpluses, while others may encounter liquidity challenges. Through cash pooling mechanisms, surplus funds from certain group companies can be transferred to aid those within the group facing liquidity issues. This facilitates a co-ordinated approach to managing the financial resources of the group and supports companies with varying liquidity needs.

A JV company has various financing options available, with traditional bank borrowings being a popular choice, but also considering capital market instruments, venture capital and project finance. In certain cases, provisions in the articles of association (for limited liability companies) or the shareholders’ agreement may require equity partners to offer additional funding or provide guaranteed bank loans. While these guarantees enhance capital access, they also increase personal financial exposure and diminish the protection provided by the corporate veil. In comparison, corporate JVs typically enjoy more favourable standing when seeking bank loans compared to contractual JVs. Regarding taxation, JV companies in Switzerland are subject to the same tax regulations as other local companies.

Besides a share capital increase by cash contribution, shares may be issued in exchange for contributions in kind to the JV’s share capital. These contributions can be in the form of transferable assets that can be capitalised on the balance sheet of the JV company, such as certain IP rights, assets or shares. Alternatively, the share capital may be paid by offsetting claims against the JV company. It is important to note that obligations of third parties to provide services to the JV company are usually not considered as transferable assets. It is crucial to exercise caution and conduct a thorough review of contributions in kind, particularly those involving cross-border transactions, to understand and address the potential tax implications.

Contractual JV

The financing of a contractual JV is usually conducted directly from financial resources provided by the JV partners. External debt funding directly to the JV is often not available.

JV agreements typically encompass a range of dispute-resolution mechanisms, with mediation and arbitration being the primary methods, and with state court proceedings being resorted to on exceptional occasions. In addition, to proactively address potential deadlock scenarios, the agreement often outlines an internal escalation scheme or the involvement of a mediator as an initial step.

If a deadlock scenario cannot be resolved, it is usually helpful to predefine the route to proceed, which may include:

• alternating decision-making rights for specific matters, such as appointing a chairperson with a casting vote;
• appointing independent directors;
• implementing reciprocal share call or put options;
• using buy-sell structures like Russian roulette or Texas shoot-out clauses; and
• implementing the right to request the dissolution of the JV company.

The more intricate buy-sell devices may introduce an element of chance when taking relevant business decisions. The same may apply in cases where reciprocal share call or put options at pre-agreed price formulas are introduced. A right to request dissolution can serve as the last resort where a JV becomes de facto unable to manoeuvre over a longer period of time.

Asset transfers, leases, loans or licences for IP can be made through additional agreements established by the partners. These specific arrangements are further detailed and outlined in the JV agreement (and usually form an annex thereto). They may include agreements on:

• asset purchase or transfer, IP rights, contracts or business;
• the supply of goods and services;
• the licensing of IP;
• employee secondment; and
• marketing and distribution agreements.

To ensure a comprehensive approach, the JV parties should carefully consider incorporating provisions in both the JV agreement and the ancillary agreements, outlining the impact that terminating an ancillary agreement would have on the JV agreement and vice versa.

The rights and obligations of JV parties in Switzerland largely depend on the legal form of the JV – contractual JV (eg, simple partnership) versus corporate JV (eg, a Swiss stock corporation or limited liability company).

Contractual JVs

In a contractual JV, the parties enjoy broad contractual freedom to define the terms of their co-operation. This includes:

• profit and loss allocation – the parties may freely agree on how profits and losses are shared and, in the absence of a specific agreement, Swiss law provides for equal sharing;
• access to information – each party generally has the right to access the books and records of the JV;
• non-compete obligations – these can be contractually agreed to restrict parties from engaging in competing activities during the JV term; and
• liability – the parties are jointly and severally liable for the debts and obligations of the JV vis-à-vis third parties.

Corporate JVs

In a corporate JV, the rights and obligations of the parties are governed by the statutory rules applicable to the chosen corporate form – typically a Swiss corporation (AG/SA) or, less frequently, a limited liability company (GmbH/Sàrl). Key aspects include:

• profit sharing – profits are distributed as dividends based on shareholding. Unless preferred shares are issued with different economic rights, dividends must be paid out equally in proportion to the nominal value of the shares held;
• loss allocation – losses are generally not allocated directly to shareholders but reduce the company’s equity, and shareholders are not personally liable beyond their capital contributions;
• access to information – shareholders have access rights as provided by law, which may be extended through the shareholders’ agreement;
• non-compete clauses – restrictions on competition by shareholders or directors must be expressly agreed in the shareholders’ agreement or employment/mandate contracts; and
• liability – shareholders are generally not liable for the debts of the JV company, although directors may incur personal liability in case of breaches of fiduciary duties or violations of statutory obligations.

In Swiss JVs, minority protection is typically achieved through contractual arrangements, most commonly in a shareholders’ agreement or JV agreement. While Swiss corporate law provides certain statutory rights to minority shareholders, effective protection in the context of a JV – especially an international one – requires tailored contractual provisions.

Statutory Rights

Under Swiss law, shareholders holding at least 10% of the share capital or votes have the right to request the convening of a shareholders’ meeting and a special audit under certain conditions. Only 5% shareholding is needed to request items to be placed on the agenda.

These rights provide a minimum level of oversight but are generally insufficient to ensure meaningful influence in a JV context.

Contractual Protections

To ensure greater control and transparency, minority shareholders often negotiate the following rights:

• board representation – a contractual right to appoint at least one member to the board of directors provides direct access to the JV’s strategic decisions and internal information;
• reserved matters/veto rights – the shareholders’ agreement may require the consent of the minority shareholder for certain key decisions (eg, changes to the business plan, capital increases, M&A transactions);
• quorum requirements – specific quorum thresholds for shareholders’ or board meetings may be set to require the presence or affirmative vote of the minority shareholder;
• tag-along rights – these allow the minority shareholder to sell its stake on the same terms if the majority sells its shares;
• drag-along rights – while typically protecting the majority, drag-along provisions can be balanced to ensure that minority shareholders participate in exit scenarios; and
• information rights – contractual rights to receive periodic reports, financial statements or other relevant information beyond statutory disclosure requirements.

These tools are especially important in international JVs, where parties may come from different legal cultures and rely heavily on the contract to define governance and protections.

Governing Law and Jurisdiction

In international JVs involving a Swiss party or Swiss JV vehicle, the choice of substantive and procedural law is a critical element of the JV agreement. Parties are generally free to choose the governing law and dispute resolution forum. Swiss law is frequently selected due to its neutrality, predictability and business-friendly environment.

When the JV vehicle is incorporated in Switzerland, it is common for the parties to choose Swiss substantive law to ensure alignment with the applicable corporate and regulatory framework. However, in international JVs, one of the parties’ home laws may also be selected as a compromise, especially when the vehicle is not incorporated in Switzerland.

Dispute Resolution Forums

Disputes arising from JV agreements are typically resolved through either:

• state courts, often in Switzerland, if the JV has strong ties to the country; or
• arbitration, which is preferred in many cross-border JVs for its confidentiality, neutrality and international enforceability.

Switzerland is a widely accepted venue for international arbitration, and many JV agreements provide for arbitration under the Swiss Rules of International Arbitration or other institutional rules (eg, ICC, LCIA).

Consequences of Failing to Agree on Procedural Law

If the parties fail to agree on a governing law or dispute resolution forum, the applicable law will be determined by conflict of law rules (eg, the Swiss Federal Act on Private International Law). This can lead to uncertainty and increase the complexity and cost of dispute resolution. Similarly, in the absence of a clear forum, jurisdictional disputes may arise, delaying enforcement and litigation.

Mandatory ADR Procedures

Swiss law does not impose mandatory alternative dispute resolution (ADR) mechanisms for commercial disputes. However, ADR clauses – such as mediation or escalation procedures – can be freely agreed upon by the parties in the JV agreement.

International Treaties and Enforcement

Switzerland is a signatory to several important international treaties governing dispute resolution.

Enforcement in Switzerland

Foreign judgments are enforceable in Switzerland if issued by a competent court and subject to reciprocity, public policy and procedural fairness standards. Foreign arbitral awards are readily enforceable under the New York Convention, and Swiss courts are known for their arbitration-friendly stance and limited grounds for refusing enforcement.

In a Swiss corporate JV, the board of directors is typically structured to reflect the relative ownership or strategic interests of the JV participants. The shareholders’ agreement or the investment agreement between the shareholders, which acts as the JV agreement, commonly includes provisions on the appointment and removal of directors, including the designation of the chairperson and vice-chairperson, quorum requirements and whether the chairperson holds a casting vote in the event of a tie. These provisions may also be reflected in the articles of association and internal business regulations.

Under Swiss law, only natural persons may serve as members of the board of directors; legal entities cannot be appointed as directors but may be represented by individuals. Each JV party generally appoints its own representatives to the board, and the inclusion of one or more independent directors may also be agreed upon to provide balance or neutrality.

Swiss corporate law requires that at least one person with sole signatory power, or two persons with joint signatory power, be resident in Switzerland. While internal regulations can limit these powers internally, third parties acting in good faith may rely on the official signature authority as recorded in the Commercial Register.

Under Swiss law, the board of directors is responsible for the overall management and supervision of the company. While certain duties are non-transferable and must be exercised by the board as a whole, all other powers may be delegated to individual directors, executive board members or third parties. This flexibility allows the creation of a structure similar to a two-tier governance system.

The non-transferable and inalienable duties of the board include:

• ultimate supervision of management and issuance of management directives;
• determining the company’s organisational structure;
• organising the accounting system, financial controls and financial planning;
• appointing, supervising and, if necessary, dismissing individuals responsible for management and representation;
• preparing the annual financial statements and convening shareholders’ meetings; and
• filing for a debt restructuring moratorium or notifying the court in case of over-indebtedness.

Board members must fulfil their duties with due care and in good faith, and are bound by the fiduciary duties of loyalty and care. This means that they must act in the best interest of the JV company. Where a conflict arises between the interests of the JV company and the JV participant that appointed the director, the director must prioritise the interests of the JV company to avoid personal liability. A breach of fiduciary duties – such as favouring the appointing party at the expense of the JV – can result in personal liability for any resulting damage.

The board may also establish subcommittees (eg, audit, remuneration, risk management or nomination committees) to prepare decisions, supervise specific business areas or execute delegated tasks. While this can enhance board efficiency, it may also lead to information asymmetries among board members, which should be carefully managed through appropriate governance processes.

There are no statutory reporting obligations of the board to the JV participants outside of those owed to the shareholders under general corporate law. However, the JV agreement may include additional information rights or reporting duties to align with the parties’ expectations and governance framework.

Under Swiss law, directors are required to immediately disclose any actual or potential conflicts of interest to the board of directors. Upon disclosure, the board must take appropriate measures to safeguard the interests of the JV company. These measures may include requiring the conflicted director to refrain from participating in discussions and voting on the matter or, in certain cases, escalating the decision to the shareholders’ meeting.

Generally, transactions between the JV company and a member of its board of directors must be concluded in writing, unless the value of the transaction does not exceed CHF1,000, and must be conducted on arm’s length terms.

Board members appointed by a JV participant are typically permitted to act in the interests of that participant. However, where the interests of the appointing party conflict with the interests of the JV company, the director must prioritise the JV company’s interests. Failure to do so may result in personal liability for breach of fiduciary duty.

In certain circumstances, it may be inappropriate for an individual closely tied to a JV participant to serve on the board – particularly if persistent or unresolvable conflicts of interest would prevent them from acting independently and in the best interest of the JV company.

Corporate JVs

In a corporate JV, IP may be transferred to the JV company, making it the legal owner of the relevant rights. If a contributing party wishes to continue using the IP for its own business purposes, it must typically enter into a separate licence agreement with the JV company. While an in-kind contribution of IP is possible under Swiss law, this approach may present valuation and liability challenges, particularly in the event of insolvency or a shareholder exit. An inaccurate valuation at the time of contribution could expose the contributing party, the JV company or its shareholders to potential creditor claims. To mitigate such risks, parties often prefer to license IP to the JV rather than transfer ownership.

It is important to note that termination of the shareholders’ agreement does not affect the JV company’s ownership of its IP. In the event of liquidation, all JV assets, including IP, will be subject to liquidation. To address this, JV agreements often include fall-back provisions granting parties usage or purchase rights for IP in such scenarios or where further development is planned.

Contractual JVs

In contractual JVs (eg, simple partnerships), contributed assets, including IP, are typically not transferred to a separate legal entity, but are held jointly by the parties. To avoid the legal and practical complexities associated with joint ownership of IP (eg, the need for mutual consent for any use, assignment or licensing), IP is usually licensed to the JV under contractual arrangements, with each party retaining ownership.

In cases where a party contributes IP that is itself subject to a third-party licence, the terms of the primary licence must be reviewed to ensure that sublicensing to or use by the JV is permitted. Restrictions in upstream licence agreements can otherwise limit the JV’s ability to exploit the IP.

Cross-Border IP Transfers

When transferring IP to or from foreign entities, additional considerations arise. These include compliance with local registration and formalities, potential tax implications (eg, withholding tax on royalties) and export control or data protection regulations.

Furthermore, enforcement of IP rights across jurisdictions should be taken into account when determining the governing law and dispute resolution mechanism in the JV agreement.

In contractual JVs, licensing of IP is generally preferred, while both licensing and assignment are common in corporate JV structures. Where a JV participant continues to use or further develop the IP independently, it will typically seek to retain ownership in order to preserve control and avoid complications in the event of JV termination or dissolution (see 8.1 Ownership and Use of IP).

The choice between licensing and assignment ultimately depends on the role and strategic value of the IP within the JV. If the JV’s primary objective is the joint development or commercialisation of IP, an assignment to the JV may be more appropriate, particularly if a future sale or exit is anticipated. In such cases, ownership by the JV can enhance the attractiveness and valuation of the venture, whereas the absence of IP ownership may hinder a clean divestment.

Accordingly, the structure should be carefully aligned with the intended use of the IP, the commercial goals of the JV and potential exit scenarios.

Under Swiss law, public companies, banks and insurance companies that employ at least 500 people and either exceed CHF20 million in total assets or generate more than CHF40 million in annual turnover (ie, large undertakings) are required to publicly report on non-financial and sustainability matters. This reporting must address environmental concerns (particularly CO₂ targets), social and employee-related issues, human rights and anti-corruption measures. The report must include the information necessary to understand the company’s development, performance and position, and the impact of its activities on these issues. Specifically, it must include/cover:

• a description of the business model;
• the company’s policies and due diligence processes relating to ESG matters;
• the measures implemented and an assessment of their effectiveness;
• the principal risks associated with ESG matters, including those arising from the company’s operations, business relationships, products or services; and
• key performance indicators relevant to these issues.

Since 1 January 2024, the Federal Ordinance on Mandatory Climate Disclosures for Large Companies has been in force. This ordinance mandates climate-related reporting in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), thereby aligning Swiss standards with international best practices.

For Swiss JVs, these requirements are unlikely to apply directly, as the thresholds are relatively high and typically not met by JV vehicles. However, an indirect impact is certainly possible. For example, where a JV participant holds a substantial interest in the JV, it may be required to consolidate the JV into its group reporting and request ESG-relevant data from the JV.

Moreover, Swiss JVs may also become subject to EU ESG regulations, particularly under the Corporate Sustainability Reporting Directive (CSRD), which will be phased in between 2024 and 2028. Unlike Swiss law, the CSRD applies to both listed and non-listed large companies and sets a lower employee threshold (250 employees). A Swiss JV may fall within the scope of the CSRD if it has an EU subsidiary that meets the relevant criteria.

Notably, beginning in 2029 (for the 2028 financial year), non-EU entities will also be subject to CSRD obligations if they generate at least EUR150 million in turnover within the EU and have either an EU subsidiary meeting CSRD thresholds or an EU branch with at least EUR40 million in sales. Consequently, Swiss corporate JVs meeting these thresholds may become subject to EU reporting obligations, and these obligations may extend to their non-EU subsidiaries.

Given these developments, JV participants – particularly those with international operations – should assess whether their JV structures or activities may trigger ESG reporting obligations under Swiss or EU law. Even where formal reporting duties do not apply, it is advisable to implement appropriate ESG policies and internal data collection processes to ensure readiness for future regulatory developments and stakeholder expectations.

Corporate JV

Under Swiss law, corporations (AG/SA) are typically established for an indefinite duration. As such, the termination of the JV agreement does not, in principle, affect the legal existence of the JV vehicle itself. However, the articles of association may include provisions stipulating that the company will be dissolved upon termination of the JV agreement. Alternatively, the shareholders may resolve to dissolve the company at a general meeting, in accordance with the applicable corporate law requirements.

Contractual JV

Contractual JVs, such as simple partnerships (einfache Gesellschaft/société simple), are governed by the provisions of the CO. Where such a JV is formed for an indefinite period or linked to the lifetime of a partner, any partner may unilaterally terminate the JV by giving six months’ notice. To ensure commercial predictability, parties often agree on a fixed term with automatic renewal, unless the agreement is terminated before the end of the term. The JV agreement may also provide for specific termination events (eg, breach, insolvency) or termination for good cause.

General Termination Matters

Regardless of the JV structure, key matters to be addressed upon termination include:

• allocation or disposal of JV assets and liabilities;
• unwinding of shared contracts or licences;
• settlement of outstanding obligations;
• handling of employees and ongoing operations;
• protection and continued use of IP; and
• exit arrangements and post-termination non-compete or confidentiality obligations.

It is advisable to address these issues comprehensively in the JV agreement to avoid disputes and ensure a smooth wind-down of the JV relationship.

JV arrangements typically come to an end upon the completion of the underlying project or the expiry of the JV term, or based on termination provisions set out in the JV agreement. On termination, the handling of assets and liabilities becomes a central issue.

A direct transfer of assets between JV participants is generally not affected by the JV arrangement unless the asset in question is of material relevance to the JV itself. For example, IP licensed to the JV by one party and subsequently transferred to another party may require that the new owner continue to license the IP to the JV – ideally on the same terms as the original licensor.

The situation is different where assets were initially transferred to the JV and are then transferred from the JV to one of its participants. In such cases, the parties involved in the transfer differ (ie, the JV company and a JV participant, rather than participants among themselves), and any proceeds from the transfer belong to the JV. As a result, all JV participants are indirectly affected and may share in the financial consequences. To avoid disputes, the JV agreement should ideally address the valuation of such assets, potential conflicts of interest and the implications for the JV’s ongoing operations (eg, continued access or use of the asset).

When assets originating from the JV itself are transferred to a participant, the key concern is that the other JV parties will no longer benefit from any future income these assets may generate – such as dividends. Here again, accurate valuation is critical, and any tax implications for the JV company should also be taken into account. In practice, JV structures often require that the transfer of significant assets be subject to approval by all participants, or at least those holding a substantial interest.

In Switzerland, there are generally no statutory provisions specifically regulating the exit of members from a JV. Exit strategies, such as share transfer restrictions or buy-back clauses, are largely a matter of contractual freedom and can be freely negotiated and defined in the JV agreement. In practice, the most common exit scenario arises upon completion of the underlying project, particularly in contractual JVs established for a limited purpose. In corporate JVs that are not tied to a specific project, it is common to include call or put options that allow the dominant party to acquire the other party’s shares upon the occurrence of certain predefined conditions, such as the achievement of financial targets or the lapse of a specific time period.