Swiss Company Acquisition: Buying an AG or GmbH (2026 Guide)

Two Paths: Share Deal vs. Asset Deal

Share Deal: Buying the Legal Entity

In a share deal, the buyer acquires the legal entity: shares in an AG (registered via endorsement on the share certificate or the share register), or quota units (Stammanteile) in a GmbH (requiring notarisation under OR Art. 785). The buyer inherits all assets, contracts, employees, and liabilities -- including historical ones. Key implications:

• Contracts: All contracts remain in place; no counterparty consent required unless a change-of-control clause is triggered in the specific contract.
• Employment: Employees transfer automatically with the entity; Art. 333 OR notification obligations are not triggered (that provision applies to business-unit transfers, not share transfers).
• Tax (seller): For a private-individual seller, capital gains on the sale of shares held as private wealth are generally tax-free at federal and most cantonal levels (Art. 16(3) DBG). Corporate sellers benefit from the participation exemption (DBG Art. 69-70) for holdings meeting the 10%/12-month threshold.
• Tax (buyer): The buyer cannot step up the tax base of the acquired underlying assets; the company's existing depreciation schedule continues.
• Liability: Historical liabilities travel with the company -- the principal due diligence risk.

Asset Deal: Buying Specific Assets

In an asset deal, the buyer acquires specified assets (equipment, IP, contracts, receivables) and may assume specified liabilities. Key implications:

• Contracts: Assignment of each contract requires either counterparty consent or a sufficiently broad assignment clause. This is often the decisive operational friction.
• Employment: If a distinct business unit transfers, OR Art. 333 applies -- employees of that unit transfer automatically on existing terms, and seller and buyer are jointly and severally liable for pre-transfer employment claims for 12 months. Art. 333a OR requires advance consultation with employee representatives.
• Tax (buyer): The buyer obtains a stepped-up tax base in the acquired assets, generating future depreciation deductions. This is the primary buyer-side advantage of an asset deal.
• Tax (seller): The seller realises a taxable gain on assets held in the business (depreciation recapture plus gain).

Due Diligence: Eight Domains

A comprehensive Swiss sell-side due diligence covers eight domains. In a share deal, all undisclosed liabilities become the buyer's problem at closing; a thorough DD is not optional.

The two most commonly underestimated liabilities are BVG pension fund underfunding (Unterdeckung) -- particularly in targets with older defined-benefit schemes -- and contaminated sites listed on the cantonal Kataster. Both are frequently addressed through purchase-price adjustment mechanisms or escrow arrangements.

The Share Purchase Agreement (SPA)

Price Mechanism

Two models predominate in Swiss practice:

• Locked-box: Economic risk transfers to the buyer at a historic reference date. No post-closing accounts. The seller gives a leakage covenant prohibiting dividends, management fees, and related-party transactions above agreed thresholds between the locked-box date and closing. Sellers prefer this for certainty.
• Completion accounts: Economic risk transfers at closing. The parties prepare agreed-format completion accounts within 30-60 days post-closing, with a purchase-price adjustment if working capital, net debt, or cash deviates from targets. Buyers may prefer this for accuracy, though methodology disputes are common.

Representations and Warranties

Swiss SPAs follow a UK/US-influenced market standard: the seller gives broad factual representations (title, financial statements, tax, employment, litigation, IP, environmental, material contracts), qualified by a disclosure letter. The buyer's remedy for breach is damages -- rescission (Wandelung) is contractually excluded. Limitation periods of 12-24 months for general warranties and 5-7 years for tax warranties are standard.

W&I Insurance

Warranty and indemnity (W&I) insurance is widely available in the Swiss market and increasingly market-standard for mid-market deals. Buyer-side W&I policies cover losses from breaches of seller representations. Premiums typically run at 0.5%-1.5% of the insured cap (commonly 20%-100% of enterprise value). W&I insurance enables sellers to give a clean exit without escrow while giving buyers institutional-quality recourse.

Transfer Formalities

GmbH: Notarised Public Deed Required (OR Art. 785)

Transfer of GmbH quota units (Stammanteile) requires a public deed (offentliche Beurkundung) executed before a qualified Swiss notary (OR Art. 785). This is mandatory regardless of deal size. The notary must be domiciled in a Swiss canton with jurisdiction. Electronic public deeds are permitted in cantons that have enabled digital notarisation. The notarised deed records the transferring quota-holder, the number of quotas transferred, the consideration, and the buyer's acceptance.

AG: Private Endorsement, No Notarisation

Transfer of registered shares (Namenaktien) in a Swiss AG requires no public deed. A written share transfer agreement and update of the share register by board resolution suffice. Where the AG's articles contain transfer restrictions (Vinkulierungsklauseln), board approval of the transfer must be obtained before closing. The AG's board updates the share register to reflect the new shareholder and issues a share register confirmation.

Stamp Duty (Umsatzabgabe)

Under Art. 13 StG, a transfer tax of 0.15% (domestic Swiss securities) or 0.3% (foreign securities) applies per side when a Swiss securities dealer is party to or intermediary in the transaction. Companies holding taxable securities with a book value exceeding CHF 10 million are deemed dealers regardless of their activity. In a purely private deal between two non-dealer individuals or holding companies below the CHF 10 million threshold, stamp duty typically does not apply. Large-group transactions and those involving banks or M&A advisers require specific analysis.

Tax Considerations

Capital Gains for Private Individual Sellers

Capital gains on the sale of shares held as private wealth are tax-free at the federal level in Switzerland (Art. 16(3) DBG) and in most cantons. The exception is the gewerbsmassiger Wertschriftenhandler (professional securities dealer) classification: serial deal-makers who leverage purchases, trade frequently, and reinvest proceeds systematically may have gains reclassified as ordinary income. For a straightforward founder exit or family sale, the risk is low.

Participation Exemption for Corporate Sellers

Swiss-resident companies benefit from the participation exemption (DBG Art. 69-70): if the selling company holds at least 10% of the target's share capital for at least 12 months continuously before disposal, capital gains are virtually exempt from federal and most cantonal CIT. The effective tax rate for qualifying corporate sellers approaches zero. See our Swiss tax advisory service for structuring advice before a planned disposal.

Indirekte Teilliquidation (Anti-Abuse Rule)

Where a private individual sells shares in a company that subsequently distributes previously untaxed reserves to the buyer (or a related party), Swiss tax authorities may recharacterise all or part of the purchase price as a taxable dividend (deemed partial liquidation). This rule -- applied by cantonal tax authorities -- can convert a tax-free capital gain into income. In deals involving asset-rich or cash-rich targets, seller and buyer SPAs typically include an indirekte Teilliquidation indemnity and covenant restricting post-closing distributions for a defined period.

Merger Control and Regulatory Approvals

Swiss Merger Control (KG Art. 9)

Swiss competition law (Kartellgesetz, KG) applies a mandatory pre-merger notification when: the combined global turnover of all parties exceeds CHF 2 billion, AND at least two of the parties each have Swiss turnover exceeding CHF 100 million. Below these thresholds -- which cover the vast majority of private M&A -- no Swiss competition filing is required.

FINMA Approval for Regulated Targets

Acquisition of a controlling interest in a Swiss bank, securities firm, insurance company, collective investment scheme manager, or other FINMA-licensed entity requires FINMA approval under the applicable sectoral legislation (FINIG, BankG, VAG). FINMA assesses the acquirer's fitness, financial soundness, and regulatory compliance record. Approval timelines typically run four to eight months. Deals involving FINMA-regulated targets require early engagement with FINMA in parallel with commercial negotiations.

Lex Koller: Foreign Acquisition of Residential Real Estate

Foreign non-resident persons and foreign-controlled companies are restricted from acquiring Swiss residential real estate under the Federal Act on the Acquisition of Real Estate by Persons Abroad (BewG, Lex Koller). Commercial real estate is not subject to Lex Koller. Where a share deal involves a target that holds Swiss residential real estate, Lex Koller applies even to a share transaction if it constitutes an wirtschaftliche Handanderung (economic transfer).

Investment Screening Act (ISA, Expected 2027)

On 19 December 2025, the Swiss Parliament adopted the Federal Act on the Screening of Foreign Investments (ISA). The ISA applies only to acquisitions of control by foreign state-controlled investors in narrowly defined security-critical sectors. Private buyers -- including private equity, family offices, and privately held strategic acquirers -- are entirely outside the ISA's scope. Entry into force is expected by early 2027 after implementing ordinances and a potential referendum period.

Timeline and Transaction Costs

Total deal friction for a mid-market Swiss transaction (enterprise value CHF 5-25 million) typically runs at 2%-5% of EV. For smaller deals the fixed legal cost is proportionally higher; for larger deals W&I insurance becomes the dominant variable cost.

Typical timeline: NDA and information memorandum (2-4 weeks), due diligence (4-8 weeks), negotiation and signing (2-4 weeks), signing to closing (0-6 months depending on regulatory approvals). Total: 3 to 12 months.

Frequently Asked Questions