New transparency rules for ownership of Swiss legal entities
Switzerland has introduced a new regime for bearer shares in Swiss companies, aimed at increasing transparency of ownership. There are new legal obligations for shareholders and beneficial owners of non-listed companies, with severe penalties for non-compliance. Swiss corporations can issue either registered shares or bearer shares. Based on international
recommendations in the fight against money laundering, new registration duties for holders of non-listed bearer shares have been introduced into Swiss commercial law.
Holders of bearer shares had until the end of 2015 to report to the company with proof of ownership and identity. As of 1 July 2015, any acquisition of bearer shares must be reported within a month. Owners of non-listed registered shares will still have to be recorded in the company's share register in order to be recognised as shareholders. Partners of Swiss LLCs must also be publicly listed in the Register of Commerce.
Also since 1 July 2015, a person (individual or entity) who acquires (independently or together with others) 25% or more of the share capital or voting rights of a non-listed Swiss corporation or LLC must disclose and report its (ultimate) beneficial owner(s) to the company within a month of acquisition. Any future changes of names or addresses of beneficial owners must also be reported.
Accordingly, all non-listed Swiss corporations and LLCs are now obliged to keep records of shareholders and substantial beneficial owners. The registers must be maintained in Switzerland and be accessible to the directors domiciled in the country at any time. The supporting documentation for each entry must be kept for ten years after a shareholder or beneficial owner has been deleted from the register.
Shareholders who do not comply with their reporting duties in the time allowed may not exercise their voting and other membership rights until the obligations are fulfilled. In the meantime their dividend and other financial rights are forfeited. Benefits received despite failing to comply must be repaid to the company, which could cause difficulties around Swiss withholding tax.
While the new registration rules mean enhanced intra-company transparency around the (beneficial) ownership of non-listed Swiss corporations, as was the case previously shareholders do not have to be disclosed to the public. By contrast, members of Swiss LLCs are listed in the Register of Commerce.
For more information, contact:
ADB Altorfer Duss & Beilstein AG, Switzerland
T: +41 44 267 63 66