PRIVATE EQUITY MANAGER
SWITZERLAND: HOME OF A WELL ESTABLISHED, ATTRACTIVE INDUSTRY
A streamlined regulatory framework, business-friendly taxation and a socio-economic context at the highest level all make Switzerland one of the most attractive countries for investors. The investment volume over the last ten years has more than quadrupled and is now approximately 1.5 billion francs. Certainly the presence of a highly competitive industrial sector, concentrated on innovative fields with a high growth rate, is a further strength, and this holds true in the private equity industry as well. Given that Switzerland is above the European average for venture capital investments, it is no accident that it has one of the most extensive market shares in this market.
The Swiss regulatory context when it comes to alternative fund management is in line with and comparable with the European and US contexts, both structurally and in terms of content
All operators have to carry out their activities in accordance with the reference law for fund managers, that being the Federal Law on Collective Investment Schemes (LICol) and the related Order on Collective Investment Schemes (OICol). These are supplemented by the Federal Anti-Money-Laundering Law (LRD).
Anyone who manages, maintains or distributes collective investment schemes to non-qualified investors needs to have an authorisation from FINMA. This does not include managers whose investors are qualified and who manage assets worth less than 100 million francs (in the case of liquid assets inclusive of leveraging) or 500 million francs (in the case of liquid assets excluding leveraging).
Foreign collective investment schemes distributed solely to qualified investors do not require approval, but must comply with certain requirements. Distribution of foreign collective investment schemes in Switzerland or from Switzerland to non-qualified investors requires FINMA’s prior approval.
The tax regime applicable to a private equity fund manager varies depending on the legal structure of their business. The extensive flexibility of the “Ticino System” allows the new taxpayer to get in contact with the Tax Authority and assess their tax position, reaching an ad hoc solution by agreement between the parties.