Sale\/Purchase Business Switzerland<\/p>\n
In most legal systems worldwide, the transfer of a business\u2014often referred to internationally as a business transfer<\/strong>, asset deal<\/strong>, or transfer of a going concern (TOGC)<\/strong>\u2014is a strategic operation to sell or acquire an existing activity. In civil-law jurisdictions<\/strong> such as France, Belgium or Morocco, the \u201cfonds de commerce\u201d (business as a going concern) is a distinct legal concept with its own codified regime (public notice, creditor protection, privilege of the vendor).<\/p>\n<\/li>\n In common-law countries<\/strong> (United Kingdom, United States, Canada, etc.), the notion is addressed through asset purchase agreements<\/strong> or share purchase agreements<\/strong>, with specific rules for employees (e.g. UK TUPE Regulations) and indirect taxation (VAT\/GST).<\/p>\n<\/li>\n<\/ul>\n Switzerland stands apart.<\/strong> This comprehensive guide explains the legal, tax, accounting and administrative framework for the sale\/purchase of a business in Switzerland<\/strong>, highlighting its unique features compared to other jurisdictions.<\/p>\n Switzerland does not provide a specific statutory regime<\/strong> for the \u201cfonds de commerce\u201d. Asset deal<\/strong>: sale of selected elements such as customer base, inventory, equipment, trademarks, or specific contracts.<\/p>\n<\/li>\n Share deal<\/strong>: purchase of the company itself, including all assets, liabilities, and contracts.<\/p>\n<\/li>\n Transfer of assets and liabilities under the Swiss Merger Act (LFus, art. 69 ff.)<\/strong>: a universal transfer of assets and liabilities \u201cen bloc\u201d, with registration in the Commercial Register and a statutory procedure to protect creditors.<\/p>\n<\/li>\n<\/ul>\n In Swiss fiduciary practice (for example, RISTER \u2013 Fiduciary in Geneva<\/strong><\/a>\u00a0or global firms like PwC), the expression \u201csale\/purchase of a business as a going concern\u201d is used as a convenient umbrella for these mechanisms.<\/p>\n In an asset deal, the seller transfers individual components such as clientele, stock, equipment, trademarks, or contracts. Assignment of receivables (art. 164 ff. CO)<\/strong><\/p>\n<\/li>\n Assignment of commercial lease (art. 263 CO)<\/strong><\/p>\n<\/li>\n Transfer of intellectual property rights<\/strong><\/p>\n<\/li>\n<\/ul>\n Alternatively, the Swiss Merger Act (LFus, art. 69 ff.)<\/strong> allows a universal transfer of assets and liabilities<\/strong> in a single step. A share deal<\/strong> consists of acquiring the legal entity that operates the business. All contracts, licences, employees, and potential disputes remain within the company.<\/p>\n Limited Liability Company (S\u00e0rl\/GmbH)<\/strong>: transfer of quotas requires a notarised deed<\/strong> and registration in the Commercial Register<\/strong>.<\/p>\n<\/li>\n Corporation (SA\/AG)<\/strong>: transfer of registered shares is carried out by endorsement or written assignment<\/strong>, subject to any statutory transfer restrictions, but no federal notarisation is required<\/strong>.<\/p>\n<\/li>\n<\/ul>\n This route is often chosen when legal continuity is essential.<\/p>\n Under article 333 CO<\/strong>, employment contracts are automatically transferred<\/strong> to the purchaser when a business or a distinct part of it retains its identity. A thorough legal checklist is critical to secure the transaction:<\/p>\n Commercial lease (art. 263 CO)<\/strong>: may be assigned to the purchaser with the landlord\u2019s written consent, which can only be refused for serious reasons. The original tenant remains jointly liable for a transitional period.<\/p>\n<\/li>\n Customer and supplier contracts<\/strong>: in an asset deal, their assignment often requires explicit consent, especially if a change-of-control clause exists.<\/p>\n<\/li>\n Intellectual property<\/strong>: transfer of trademarks, patents, or trade names must be recorded with the Swiss Federal Institute of Intellectual Property (IPI)<\/strong> to be enforceable.<\/p>\n<\/li>\n Data protection (nFADP 2023)<\/strong>: customers and employees must be informed, privacy notices updated, and the legal basis for processing confirmed.<\/p>\n<\/li>\n Regulatory authorisations<\/strong>: in sectors such as hospitality and catering, licences are personal and location-specific; the buyer must obtain their own authorisation from the competent canton (e.g. Geneva, Vaud).<\/p>\n<\/li>\n Merger control (COMCO)<\/strong>: notification is required if combined turnover thresholds are met (CHF 2 billion worldwide or CHF 500 million in Switzerland, and at least CHF 100 million each for two parties).<\/p>\n<\/li>\n<\/ul>\n According to Swiss Federal Tax Administration (FTA) practice<\/strong> and the VAT brochure \u201cRestructuring\u201d<\/strong>, a sale\/purchase of a business as a going concern can qualify as a transfer of a going concern (TOGC)<\/strong>. If the sale concerns only isolated assets (e.g. individual machines or stock), normal VAT applies. Conditions under Swiss practice:<\/strong><\/p>\n Transfer of the entire business or an independent branch, including all essential operating elements.<\/p>\n<\/li>\n Continuation of the activity by the purchaser without significant interruption.<\/p>\n<\/li>\n Purchaser is or becomes VAT registered at the time of transfer.<\/p>\n<\/li>\n Seller and buyer notify the FTA and, where necessary, file the prescribed declaration form.<\/p>\n<\/li>\n<\/ol>\n Examples:<\/strong> Impact:<\/strong> The TOGC concept in Switzerland thus results from administrative practice and the combined reading of arts. 10 ff., 18 ff. and 38 of the Swiss VAT Act (LTVA)<\/strong>, not from a single statutory article.<\/p>\n In a share deal<\/strong>, the involvement of a Swiss securities dealer triggers federal transfer stamp duty<\/strong>:<\/p>\n 0.15 % on Swiss securities<\/p>\n<\/li>\n 0.30 % on foreign securities. Capital gains and hidden reserves<\/strong> are taxed as ordinary income (art. 18 LIFD).<\/p>\n<\/li>\n Liquidation gains<\/strong> realised after age 55 or upon disability may benefit from reduced taxation (art. 37b LIFD).<\/p>\n<\/li>\n If business property is sold, cantonal real estate capital gains tax<\/strong> applies under either monistic or dualistic systems.<\/p>\n<\/li>\n<\/ul>\n Gains on assets are subject to federal and cantonal corporate income tax<\/strong>.<\/p>\n<\/li>\n A private individual shareholder selling shares normally enjoys tax-free capital gains<\/strong>, except in cases of indirect partial liquidation.<\/p>\n<\/li>\n Corporate shareholders may benefit from the participation exemption<\/strong> if conditions are met.<\/p>\n<\/li>\n<\/ul>\n In an asset deal<\/strong>, the buyer may amortise assets and acquired goodwill<\/strong> over five to ten years for tax purposes.<\/p>\n<\/li>\n In a share deal<\/strong>, there is no tax step-up<\/strong> of the target\u2019s assets, and all latent tax risks are inherited.<\/p>\n<\/li>\n<\/ul>\n If the transaction includes property:<\/p>\n Cantonal real estate transfer tax<\/strong> (e.g. 3 % in Geneva) is due.<\/p>\n<\/li>\n Real estate capital gains tax<\/strong> can be significant if the holding period is short.<\/p>\n<\/li>\n<\/ul>\n Seller<\/strong>: derecognises assets at the sale price and records any gain.<\/p>\n<\/li>\n Buyer<\/strong>: records the acquired assets and goodwill in accordance with the Swiss Code of Obligations or Swiss GAAP FER<\/strong>. Goodwill is typically amortised over five years (exceptionally up to twenty with justification) and subject to regular impairment testing.<\/p>\n<\/li>\n<\/ul>\n Due diligence<\/strong>: legal (contracts, leases, IP, employment), tax (VAT, hidden reserves), financial (earnings quality, working capital), and regulatory.<\/p>\n<\/li>\n Price mechanisms<\/strong>: locked-box (price fixed as of a historical date) or completion accounts (price adjusted at closing).<\/p>\n<\/li>\n Representations, warranties and indemnities<\/strong>: including non-competition and non-solicitation clauses.<\/p>\n<\/li>\n Formalities<\/strong>: share deals in a S\u00e0rl require a notarial deed<\/strong> and Commercial Register filing; a universal asset transfer can be recorded under the LFus with official publication.<\/p>\n<\/li>\n<\/ul>\n Commercial lease<\/strong>: negotiate the assignment with the landlord, clarify remaining term, rent, guarantees and authorised works.<\/p>\n<\/li>\n Workforce<\/strong>: under art. 333 CO, employment contracts transfer automatically; harmonisation of working conditions, occupational pension plans (LPP\/BVG) and accrued leave must be addressed.<\/p>\n<\/li>\n<\/ul>\n Before signing<\/strong>: verify transferability of licences and sector-specific permits (e.g. hospitality, food trade).<\/p>\n<\/li>\n Between signing and closing<\/strong>: obtain consents (landlord, banks, key suppliers), secure financing, and comply with any COMCO merger control<\/strong> requirements.<\/p>\n<\/li>\n After closing<\/strong>:<\/p>\n Update Commercial Register entries.<\/p>\n<\/li>\n Adjust VAT, social security (AVS\/AHV) and occupational pension (LPP\/BVG) registrations.<\/p>\n<\/li>\n Record trademark assignments with the IPI.<\/p>\n<\/li>\n Update data protection notices and processing registers (nFADP).<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n The purchase price is typically based on:<\/p>\n the Swiss practitioners\u2019 method<\/strong> (average of net asset value and capitalised earnings),<\/p>\n<\/li>\n market multiples<\/strong>, or<\/p>\n<\/li>\n a discounted cash flow (DCF)<\/strong> model.<\/p>\n<\/li>\n<\/ul>\n Earn-out clauses (price contingent on future performance) and locked-box mechanisms are common but require careful VAT and tax analysis.<\/p>\n Adapt contract templates: Switzerland has no BODACC (public notice) system<\/strong> and no statutory vendor\u2019s lien<\/strong> on a business as a going concern.<\/p>\n<\/li>\n Correctly qualify the transaction to avoid unexpected VAT liability<\/strong>.<\/p>\n<\/li>\n Obtain the landlord\u2019s written consent<\/strong> before closing.<\/p>\n<\/li>\n Fulfil employee information and consultation duties to prevent disputes.<\/p>\n<\/li>\n Anticipate real estate transfer taxes and capital gains taxes<\/strong> if property is included.<\/p>\n<\/li>\n<\/ul>\n Engaging a specialised fiduciary such as RISTER \u2013 Fiduciary in Geneva<\/strong>\u00a0ensures coordination of notaries, lawyers, tax advisers and accountants, mitigating these risks.<\/p>\n The sale or purchase of a business as a going concern in Switzerland<\/strong> is a multidisciplinary transaction<\/strong> requiring precise planning. RISTER \u2013 Fiduciary in Geneva<\/strong>\u00a0provides end-to-end support for the sale or purchase of a business or operating unit<\/strong>. 1. What is meant by the sale\/purchase of a business as a going concern in Switzerland?<\/strong> 2. What are the main legal structures for such a transaction?<\/strong> 3. What happens to employees?<\/strong>
However, the legal treatment varies widely:<\/p>\n\n
It has no stand-alone legal status for a \u201cfonds de commerce\u201d. Instead, Swiss law regulates such transactions through general provisions of the Swiss Code of Obligations (CO)<\/strong>, complemented by the Swiss Merger Act (LFus)<\/strong>, and detailed fiscal and administrative practice<\/strong> (VAT, direct taxes, labour law).<\/p>\n
\n1) Concept and Scope of the Sale\/Purchase of a Business in Switzerland<\/h2>\n
Instead, the transaction is usually structured as one of the following:<\/p>\n\n
\n2) Three Legal Routes for the Sale\/Purchase of a Business in Switzerland<\/h2>\n
a) Asset Deal (Sale of Selected Assets)<\/h3>\n
Each element follows its own transfer rules:<\/p>\n\n
This process\u2014recommended by fiduciaries such as RISTER<\/strong>\u2014simplifies complex sales by avoiding numerous separate assignments and ensures creditor protection through official publication.<\/p>\n
\nb) Share Deal (Transfer of Shares or Quotas)<\/h3>\n
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\nc) Transfer of Business (Labour Law)<\/h3>\n
Employees have a right of objection<\/strong>, and the employer must inform and consult staff<\/strong> (art. 333a CO).
Swiss Federal Supreme Court rulings consistently uphold these obligations to avoid employment disputes.<\/p>\n
\n3) Key Legal Considerations in a Sale\/Purchase of a Business as a Going Concern<\/h2>\n
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\n4) Indirect Taxation: VAT and Securities Transfer Stamp Duty<\/h2>\n
a) VAT<\/h3>\n
If the buyer continues the activity and assumes the seller\u2019s VAT rights and obligations, the transaction falls outside the scope of Swiss VAT<\/a><\/strong>: no VAT is charged, and the buyer inherits the seller\u2019s VAT position (number, input tax rights and obligations).<\/p>\n
For transfers including real estate, the FTA may require a special declaration procedure (art. 38 LTVA)<\/strong>.<\/p>\n\n
\u2013 Sale of a restaurant with equipment, staff and lease, taken over without interruption.
\u2013 Sale of a complete production site with customer and supplier contracts and immediate continuation.<\/p>\n
\u2013 For the seller<\/em>: no VAT to charge or remit on the purchase price.
\u2013 For the buyer<\/em>: no cash-flow burden and immediate succession in the VAT position.<\/p>\n
\nb) Securities Transfer Stamp Duty<\/h3>\n
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A subsequent capital increase may also trigger 1 % issuance duty<\/strong>.<\/p>\n<\/li>\n<\/ul>\n
\n5) Direct Taxes for Seller and Purchaser<\/h2>\n
a) Individual Seller (Sole Proprietorship or General Partnership)<\/h3>\n
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b) Corporate Seller (SA\/AG\/S\u00e0rl\/GmbH)<\/h3>\n
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c) Purchaser<\/h3>\n
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d) Real Estate<\/h3>\n
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\n6) Accounting and Swiss Standards<\/h2>\n
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\n7) Transaction Process for the Sale\/Purchase of a Business as a Going Concern<\/h2>\n
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\n8) Commercial Lease and Workforce Transfer<\/h2>\n
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\n9) Administrative Steps Before, During and After Closing<\/h2>\n
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\n10) Valuation and Financing<\/h2>\n
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\n11) Pitfalls and Best Practices<\/h2>\n
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\nConclusion<\/h2>\n
It combines company law (CO, LFus)<\/strong>, tax law (LTVA, LIFD)<\/strong>, labour law (art. 333 CO)<\/strong>, accounting standards (Swiss GAAP FER)<\/strong> and administrative formalities<\/strong> (Commercial Register, IPI, FTA).
With the support of experienced professionals\u2014fiduciary, legal counsel and tax experts\u2014both seller and buyer can secure the transaction, optimise taxation and ensure a smooth transition.<\/p>\n
\nServices of RISTER \u2013 Fiduciary in Geneva in Business Transfers<\/h2>\n
The team performs full due diligence<\/strong> (contracts, leases, hidden liabilities, tax structure), designs the optimal legal structure (asset deal, share deal or universal transfer under LFus), and advises on tax optimisation<\/strong> (VAT, corporate income tax, real estate capital gains).
RISTER drafts and coordinates transaction documents (including price mechanisms such as earn-outs or locked-box clauses), liaises with notaries and authorities, and manages closing formalities<\/strong> (Commercial Register filing, Swiss VAT declarations<\/a>, licence transfers, social security notifications).
Post-acquisition, RISTER ensures smooth accounting integration, goodwill allocation and ongoing tax planning.
With deep knowledge of Geneva\u2019s regulatory environment and strong links to local notaries, lawyers and Swiss public administrations<\/a>, RISTER guarantees a secure and seamless transfer of business operations<\/strong>.<\/p>\n
\nFAQ \u2013 Sale\/Purchase of a Business as a Going Concern in Switzerland<\/h2>\n
Switzerland has no specific legal concept of \u201cfonds de commerce\u201d. The term generally refers to an asset deal<\/strong>, a share deal<\/strong>, or a universal transfer of assets and liabilities under the Swiss Merger Act (LFus)<\/strong>, allowing the transfer of all or part of an existing business including its customer base, lease, contracts and employees.<\/p>\n
Asset deal \u2013 sale of identified assets; Share deal \u2013 acquisition of company shares\/quotas; Universal transfer under LFus \u2013 a single transfer of all assets and liabilities with creditor protection.<\/p>\n
Under art. 333 CO<\/strong>, employment contracts automatically transfer to the buyer if the business retains its identity. Employees may object and must be informed and consulted (art. 333a CO).<\/p>\n