Mergers and Acquisitions in Switzerland: M&A Guide

Acquiring or merging a company in Switzerland follows one of three routes: buying shares (share deal), buying assets (asset deal), or executing a legal merger under the Federal Merger Act. The choice depends on tax efficiency, liability isolation, and transaction complexity. For founders looking to buy an existing company rather than form a new one, see our guides on shelf companies and ready-made companies.

What are the ways to acquire a company in Switzerland?

Share deals account for the majority of Swiss private M&A transactions. Legal mergers are used primarily for post-acquisition integration (merging an acquired subsidiary into the parent) or for restructuring within a group. The FusG also governs conversion from one legal form to another, a route often combined with an acquisition when the target’s structure needs to change.

How does a share deal work?

The buyer purchases all (or a controlling portion of) shares from the existing shareholders:

Step 1 — Letter of intent (LOI). Non-binding term sheet covering price, structure, timeline, exclusivity, and conditions. Typical exclusivity period: four to eight weeks.

Step 2 — Due diligence. The buyer examines the company’s financials, contracts, employees, tax position, IP, litigation, and compliance. See due diligence section below.

Step 3 — Share purchase agreement (SPA). The binding contract covering:

• Purchase price and payment terms (lump sum, earn-out, escrow)
• Representations and warranties (Zusicherungen und Gewährleistungen)
• Indemnification provisions
• Conditions precedent (regulatory approvals, financing)
• Non-compete and non-solicitation covenants
• Closing mechanics

Step 4 — Closing. Shares are transferred, purchase price is paid, board/management changes are implemented.

Step 5 — Commercial register update. New shareholders and any changes to the board or management are registered. For a GmbH, the notarised share transfer and amended shareholder list are filed. For an AG, only board changes require registration (shares are not tracked in the commercial register for private AGs).

GmbH vs AG share transfer

How does an asset deal work?

The buyer selects specific assets (equipment, inventory, IP, contracts, goodwill) and purchases them from the selling company:

Advantages:

• Buyer can exclude unwanted liabilities (litigation, environmental, tax disputes)
• Purchase price is allocated to assets, creating tax-deductible depreciation for the buyer
• Cleaner structure for buying a division or business unit rather than the whole company

Disadvantages:

• Each asset must be individually transferred (contracts require counterparty consent)
• Employees transfer automatically under OR Art. 333 — the buyer inherits all employment terms
• Higher transaction costs (multiple transfer documents, due diligence on each asset)
• No step-up in tax losses of the seller (losses stay with the selling entity)

Tax treatment: The buyer allocates the purchase price across acquired assets and amortises goodwill over five to ten years (tax-deductible). For the seller, the gain on the asset sale is taxable as business income at the corporate tax rate.

How does a legal merger work under FusG?

The Federal Merger Act (FusG) provides a framework for merging two legal entities into one through universal succession — all assets, liabilities, contracts, and employees transfer by operation of law.

Types of merger:

• Absorption merger (Absorptionsfusion): Company A absorbs Company B. B ceases to exist. Most common.
• Combination merger (Kombinationsfusion): Companies A and B merge to form a new Company C. Both A and B cease to exist. Rare in practice.

Process:

Total: approximately 4-5 months from board approval to completion.

Simplified merger: If the absorbing company holds at least 90% of the target’s shares and voting rights, the merger can proceed without a general meeting of the absorbing company (FusG Art. 23). This shortens the timeline significantly.

Tax treatment: Mergers can be structured as tax-neutral reorganisations under the federal and cantonal participation deduction and reorganisation relief provisions, provided the assets are carried over at book value and the merged entity continues the business. A tax ruling from the cantonal tax authority is strongly recommended before proceeding.

What due diligence is standard?

For small GmbH transactions, due diligence is often completed within two weeks with a focused review. For larger or more complex targets, four to eight weeks is standard.

How are acquisitions taxed?

Share deal — buyer

• No immediate tax consequence for the buyer (purchase price is the cost base of the shares)
• No depreciation of goodwill (goodwill is embedded in the share price, not separately amortisable)
• Target company’s tax losses can continue to be used by the target — but not by the buyer’s other entities

Share deal — seller (individual)

• Capital gain is tax-free for Swiss-resident private individuals (DBG Art. 16(3))
• Exception: reclassification as professional trading if criteria are met (frequent transactions, debt financing, short holding period)
• Withholding tax: none on share sale proceeds (withholding tax applies only to dividends, not capital gains)

Share deal — seller (company)

• Capital gain is taxable as business income
• Participation deduction applies if the stake is 10%+ and was held for at least one year — effectively reducing or eliminating tax on the gain

Asset deal — buyer

• Purchase price allocated to assets → amortisation of goodwill (5-10 years) is tax-deductible
• Step-up in asset values provides future depreciation deductions

Asset deal — seller

• Gain on each asset is taxable as business income at the corporate rate
• No participation deduction (this applies only to share sales)

Legal merger

• Tax-neutral if structured as a reorganisation (book value carryover, continued business)
• Tax ruling recommended to confirm neutral treatment

What is the typical timeline?

What regulatory approvals may be required?

Most private company acquisitions do not trigger any regulatory filing. The COMCO thresholds are high enough that SME transactions fall below them.

Why you can trust this guide

This guide is written by Florian Rosenberg, a former fiduciary office manager with experience in company sales, acquisitions, and post-acquisition restructuring. Legal references cite the Federal Merger Act (FusG) and OR. Verify any point against the primary source.

Frequently asked questions

What is the most common way to buy a Swiss company?

The share deal is the most common form for private company acquisitions. The buyer purchases 100% (or a controlling stake) of the shares (Aktien in an AG, Stammanteile in a GmbH) from the existing shareholders. The company continues as the same legal entity with the same contracts, employees, licences, and tax positions. No merger procedure under the FusG is required. The transaction is documented through a share purchase agreement (SPA) and executed by transferring the shares and updating the commercial register with the new shareholder and any changes to the board.

What is the difference between a share deal and an asset deal?

In a share deal, the buyer acquires the company as a whole by purchasing shares. All assets, liabilities, contracts, and employees transfer automatically. In an asset deal, the buyer selects specific assets (equipment, IP, customer contracts) from the seller's company and purchases them individually. Liabilities stay with the seller (unless expressly assumed). An asset deal requires separate transfer of each asset, consent from contract counterparties, and compliance with the employee transfer rules under OR Art. 333. Asset deals are more complex but allow the buyer to avoid unwanted liabilities.

How long does a Swiss company acquisition take?

A straightforward share deal for a small GmbH or AG can be completed in four to eight weeks from signing a letter of intent to closing. Due diligence takes two to four weeks, SPA negotiation one to two weeks, and commercial register update one to two weeks. A legal merger under the FusG takes longer: eight to twelve weeks minimum due to mandatory creditor protection periods (two-month creditor call after publication). Complex transactions with regulatory approvals (FINMA, COMCO) can take three to twelve months.

Is a notary required for buying shares in a Swiss GmbH?

Yes. The transfer of GmbH Stammanteile (quotas) requires a notarised transfer agreement (öffentliche Beurkundung) under OR Art. 785. This is different from an AG, where shares (Aktien) can be transferred by simple endorsement (bearer shares) or written assignment (registered shares) without a notary. The notarisation requirement for GmbH transfers adds CHF 500-2,000 to the transaction cost and requires scheduling with a cantonal notary.

What happens to employees when a company is acquired?

Under OR Art. 333, when a business or part of a business is transferred to a new owner, all employment relationships pass to the acquirer automatically with all existing rights and obligations. The employees retain their accrued service years, salary terms, and holiday entitlements. The acquirer and the transferor are jointly liable for employee claims arising before the transfer for a period of up to one year. Employees can refuse the transfer — in which case the employment relationship ends at the next ordinary notice date. In a share deal, there is technically no change of employer (the company remains the same entity), so OR Art. 333 does not apply — but employees may have concerns about the new ownership.

Can a foreign company acquire a Swiss company?

Yes, with few restrictions. Foreign direct investment in Switzerland is generally unrestricted — there is no foreign investment screening mechanism equivalent to CFIUS (US) or the Investitionsprüfungsgesetz (Germany). The main exception is the Lex Koller (BewG), which restricts foreign acquisition of Swiss real estate. If the target company owns real estate, the buyer may need a cantonal permit. Additionally, acquisitions in regulated sectors (banking, insurance, securities) require FINMA approval. For all other sectors, a foreign buyer can acquire 100% of a Swiss company without government approval.

What are the tax consequences of selling a Swiss company?

For a Swiss-resident individual selling shares in a private company, the capital gain is generally tax-free — this is one of Switzerland's most significant tax advantages. Private capital gains on movable assets (including shares) are exempt from income tax under DBG Art. 16(3). However, the gain can be reclassified as taxable income if the tax authority considers the seller a professional securities trader (gewerbsmässiger Wertschriftenhändler) — criteria include frequency of transactions, use of debt financing, and holding period. For a corporate seller, the capital gain is taxable as business income but benefits from the participation deduction if the stake is 10%+ and was held for at least one year.

What is a merger squeeze-out?

Under FusG Art. 18, if a shareholder holds at least 90% of the voting rights and 90% of the share capital of a company, it can execute a squeeze-out merger — forcing the remaining minority shareholders to accept cash compensation instead of shares. The minority shareholders must receive at least the fair market value of their shares, and the compensation must be reviewed by a licensed auditor. This mechanism is used to take a company fully private or to consolidate 100% ownership after a partial acquisition.