FusG Transaction Types: Which Form Do You Need?
| Form | FusG articles | What happens | Typical use |
|---|---|---|---|
| Ordinary merger (Fusion) | Art. 3-22 | Company A absorbs Company B; B ceases to exist; all assets/liabilities transfer by law | Group consolidation; foreign subsidiary merging into Swiss parent |
| Simplified intragroup merger | Art. 23-24 | As above, but reduced documentation and no subsidiary shareholder vote when parent holds ≥90% | Most common form for wholly/majority-owned subsidiaries |
| Demerger (Spaltung) | Art. 29-51 | A defined business unit is transferred to a new or existing entity; original company continues (split-off) or dissolves (split-up) | Carving out a division; preparing a unit for separate sale or IPO |
| Conversion (Umwandlung) | Art. 53-68 | A company changes its legal form without change of legal identity (e.g., AG to GmbH or vice versa) | Liability management; attracting co-investors requiring a specific entity type |
| Asset transfer (Vermögensübertragung) | Art. 69-77 | A defined set of assets and liabilities transfers to another entity by agreement; original company continues | Property portfolio transfers; IP hive-down; carving assets without a full split |
Ordinary Merger (Art. 3-22)
In an ordinary merger, the absorbing company (übernehmende Gesellschaft) acquires all assets, liabilities, contracts, and employees of the absorbed company (übertragende Gesellschaft) by operation of law. The absorbed company is dissolved without liquidation. Shareholders of the absorbed company receive either shares of the absorbing company or a cash compensation if their shareholding would otherwise be diluted below a practicable threshold. An FAOA auditor must certify the merger plan (Fusionsprüfung, Art. 15 FusG).
Simplified Intragroup Merger (Art. 23-24)
When the absorbing company already holds at least 90% of the voting rights in the absorbed company, FusG Art. 23 allows a simplified procedure:
- No shareholder vote required at the subsidiary level
- Simplified merger report (shorter content requirements)
- Reduced Fusionsprüfung scope
- At 100% ownership: no minority compensation calculation, further reducing documentation
This is the most common form used in Swiss group restructurings. The 30-day creditor protection waiting period still applies.
Demerger (Spaltung, Art. 29-51)
A demerger transfers a defined portion of a company's business -- with associated assets and liabilities -- to one or more recipient entities. Two forms:
- Split-off (Abspaltung): The transferring company continues with the remaining business; shareholders receive shares in the recipient entity in addition to (or in exchange for reducing) their existing shares
- Split-up (Aufspaltung): The transferring company transfers all its business to two or more recipients and then dissolves; shareholders receive shares in each recipient
Conversion (Umwandlung, Art. 53-68)
A conversion changes the legal form of a Swiss company without changing its legal identity or requiring a transfer of assets. Common uses:
- AG to GmbH: reduce statutory capital requirements, increase management flexibility, change ownership transfer mechanics
- GmbH to AG: access capital markets, issue multiple share classes, prepare for external investment
- Cooperative to AG or GmbH
The converted entity retains its commercial register number, contracts, and employee relationships. A conversion requires notarisation and commercial register filing but does not trigger the creditor protection publication period in the same way as a merger.
Asset Transfer (Vermögensübertragung, Art. 69-77)
An asset transfer allows a company to transfer a defined set of assets and liabilities to another entity without a full merger or demerger. The transferring company continues to exist. Unlike a sale of individual assets, the FusG asset transfer procedure transfers liabilities by law (no individual creditor consent required), making it suitable for hiving down an IP portfolio, real estate, or loan book into a separate holding vehicle.
Tax Neutrality: The Key Planning Condition
Swiss tax law grants tax neutrality to qualifying FusG transactions under DBG Art. 61 (federal direct tax) and StHG Art. 24 (cantonal harmonisation statute). Tax neutrality means:
- No taxable gain at the transferring entity on transferred assets
- No income tax charge on dissolved hidden reserves
- No stamp duty issuance tax (Emissionsabgabe) on new shares issued in the reorganization (StG Art. 6 restructuring exemption)
- Loss carry-forwards of the surviving entity are preserved
The Three Conditions for DBG Art. 61 Neutrality
Tax neutrality requires all three conditions to be met simultaneously:
- Commercial enterprise continues: The transaction transfers a "going concern" (operational business unit or investment holding), not merely isolated assets. A bare asset sale does not qualify.
- Book values transferred unchanged: The transferred assets are recorded at their prior carrying value in the recipient entity's books. No step-up to fair market value is permitted for a neutral reorganization.
- Hidden reserves remain taxable in Switzerland: If the reorganization would move assets out of Swiss tax jurisdiction (e.g., cross-border transfer to a foreign entity), neutrality is denied. The Swiss tax base must be preserved.
Loss Carry-Forwards After a Merger
Loss carry-forwards of the surviving (absorbing) entity are preserved in full. Loss carry-forwards of the absorbed entity cannot be transferred and are forfeited at the date of dissolution. The 7-year carry-forward period under DBG Art. 67 continues to run from the year the loss originally arose. For groups with significant accumulated losses, the inability to transfer losses of the absorbed entity is a material planning consideration: it may be more efficient to use the absorbed entity as the absorbing entity (reverse merger) if it holds the larger loss pool.
The Ordinary Merger Process: Step by Step
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1
Merger agreement (Fusionsvertrag)
The boards of both entities sign a merger agreement specifying: assets and liabilities transferred, share exchange ratio (or compensation), effective date, and employee transfer terms. For 100% intragroup mergers, the exchange ratio and compensation elements are simplified.
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2
Merger report (Fusionsbericht)
The board of each entity prepares a merger report explaining the legal and economic rationale, the share exchange ratio, and the impact on employees. The report is made available to shareholders for review before the vote.
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3
FAOA auditor review (Fusionsprüfung)
An FAOA-accredited auditor reviews the merger agreement and balance sheets and certifies that shareholders will receive adequate consideration and that the merger does not prejudice creditors. For simplified intragroup mergers, the scope is reduced; at 100% no minority compensation certification is needed.
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4
Shareholder approval
Each entity's shareholders vote on the merger at a general meeting. For a Swiss AG, the statutory merger requires the qualified majority of OR Art. 704 (two-thirds of represented votes + absolute majority of par value). For simplified intragroup mergers, no subsidiary vote is required if the parent holds 90%+.
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5
SOGC publication and 30-day creditor waiting period
The merger is published in the Swiss Official Gazette of Commerce (SOGC). Creditors have 30 days to raise objections (Art. 26 FusG). No commercial register filing can occur until this period has elapsed and any objections are resolved.
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6
Commercial register filing
After the waiting period, the absorbing company files the final merger documentation with the cantonal commercial register. The absorbed company is deregistered. Legal effect of the merger (asset transfer by law; employee transfer; contract novation) occurs at the moment of the HReg entry.
Cross-Border Mergers (IPRG Art. 163)
Switzerland permits cross-border mergers between Swiss companies and companies incorporated in EU or EFTA member states under IPRG Art. 163 in conjunction with FusG. Cross-border mergers involving entities in non-EU/non-EFTA states require a case-by-case analysis and are not covered by IPRG Art. 163.
Cross-border mergers where assets leave Switzerland trigger a tax exit charge (Wegzugssteuer) on hidden reserves embedded in the transferred assets, since the neutrality condition of Swiss taxability is no longer met. An advance ruling confirming the quantification of the exit charge is essential for any cross-border reorganization.
Timeline and Costs
| Transaction form | Typical timeline | Legal/advisory fee (est.) | FAOA auditor (est.) | HReg fee |
|---|---|---|---|---|
| Simplified intragroup merger (100%) | 6-10 weeks | CHF 8,000-20,000 | CHF 3,000-8,000 | CHF 200-400 |
| Ordinary merger (with minority) | 10-18 weeks | CHF 20,000-50,000+ | CHF 8,000-20,000 | CHF 200-400 |
| Demerger | 12-20 weeks | CHF 25,000-60,000+ | CHF 10,000-25,000 | CHF 200-400 per entity |
| Conversion (AG to GmbH or reverse) | 4-8 weeks | CHF 5,000-15,000 | CHF 2,000-5,000 | CHF 150-300 |
| Asset transfer | 4-8 weeks | CHF 6,000-15,000 | CHF 2,000-6,000 | CHF 150-300 |
Frequently Asked Questions
What is the difference between a FusG merger and a Swiss M&A acquisition?
A FusG merger combines two entities already under common ownership; the absorbed entity disappears and all its assets/liabilities transfer to the absorber by statute. A Swiss M&A acquisition is the purchase of a third-party company from an external seller -- a negotiated transaction, not an internal restructuring.
What are the tax neutrality conditions for a Swiss merger?
DBG Art. 61 / StHG Art. 24 neutrality requires: (1) the commercial enterprise continues operating after the transaction; (2) book values of assets transfer unchanged; and (3) hidden reserves remain taxable in Switzerland (no tax exit). If met, no taxable gain arises and no stamp duty issuance tax is levied on new shares.
Can I merge a Swiss subsidiary into the parent without a shareholder vote at the subsidiary?
Yes. FusG Art. 23 permits a simplified merger when the parent holds at least 90% of the subsidiary's voting rights. No shareholder vote is required at the subsidiary, and documentation requirements are reduced. At 100% ownership, no minority compensation calculation is needed.
Do I need an FAOA auditor for every Swiss merger?
For an ordinary merger, yes -- the Fusionsprüfung by an FAOA-accredited auditor is mandatory (FusG Art. 15). For simplified intragroup mergers at 100% ownership with no debt concern, requirements may be reduced. Confirm with your cantonal commercial register.
How long does the creditor waiting period last?
30 days from SOGC publication (FusG Art. 26). The commercial register will not process the final merger filing until this period has elapsed and any objections are resolved. It cannot be shortened and is the main timing constraint in every FusG transaction.
Can I carry forward losses after a FusG merger?
The surviving (absorbing) entity keeps its own loss carry-forwards. The absorbed entity's loss carry-forwards are forfeited and cannot be transferred. If the absorbed entity holds larger losses, a reverse merger (absorbed entity as absorber) may preserve more of the loss pool.
What is the difference between a demerger and an asset transfer under FusG?
A demerger (Spaltung) transfers a defined business unit with full statutory protections; the original company either continues (split-off) or dissolves (split-up). An asset transfer (Vermögensübertragung) transfers a defined set of assets and liabilities by agreement without a full split; the original company continues and the procedure is lighter. Both still require SOGC publication and a creditor protection period.
Do I need a tax ruling before a Swiss corporate reorganization?
Not legally required, but strongly recommended. A cantonal tax ruling confirms neutrality conditions, loss carry-forward treatment, and stamp duty exemption before execution, eliminating the risk of a retrospective adverse assessment. Rulings are free from the cantonal tax office and typically take 4-12 weeks.