This book includes a plain text version that is designed for high accessibility. To use this version please follow this link.
JULY 2013


Legal Focus


93


be underestimated, since in many nations, employment continuance of the local staff and management becomes conditional for the M&A deal.


Last but not least, among the various types of risk that investors face are also legal and regulatory challenges that can have serious financial implications if they are not properly managed. Especially different tax systems (see below) and high risk jurisdictions are of big importance. Many jurisdictions indicate a variety of restrictions on the parties’ discretion to choose. That causes legal uncertainty in case of dispute. With respect to the choice of law, the majority of the jurisdictions indicate that the two key factors taken into consideration are the link between the parties and the choice of law and the reputation associated with the law (e.g., coherence, stability,). Given the possibility of a dispute arising at some stage between the M&A parties, it is crucial to give adequate thought in advance to the dispute resolution provision. Most international M&A agreements incorporate a choice of law and jurisdiction clause. Failure to agree a suitable dispute resolution forum and procedure could have significant implications in the case of an eventual dispute. Arbitration is a popular choice in the context of cross-border M&A disputes, since it is usually more flexible procedure than court litigation.


What regulatory restrictions are there?


No material restrictions apply and generally there is no need for government authorization with regard to foreign investors purchasing share or assets of Swiss entities. However, certain exceptions apply for regulated industries, such as banks and insurances where special requirements, government approvals or notification duties may apply. As a general rule, M&A transactions are regulated by general corporate and contract law provisions contained in the Swiss Code of Obligations (CO). In addition, other legislations are relevant as well, such as the Federal Law on Merger, Demerger, Conversion and Transfer of Assets and Liabilities. Last but not least, the corporate governance issues have become a hot issue in Switzerland as well. The Swiss Business Federation has edited for instance a Swiss Code of Best Practice, with the aim to increase transparency and disclosure policy within listed companies.


What are the key taxation considerations for investors when embarking upon mergers and acquisitions in your jurisdiction?


The Swiss tax system and Switzerland’s extensive network of double tax treaties (DTTs) offers attractive structures for M&A activities. It is often considered a tax haven due to its general low rate of taxation and the various tax exemptions


www.lawyer-monthly.com


or reductions available to Swiss companies doing business abroad, or foreign persons resident in Switzerland. Switzerland has last but not least one of the world’s most stable economies. Nevertheless, there are also some challenges in the Swiss tax legal system. The taxes in Switzerland are regulated in substantially different ways by cantonal and federal statutes. Briefly worded, whether an acquisition is executed in the form of an asset or a share deal, leads to different tax implications for both the seller and acquirer. Acquirers usually prefer asset deals to limit their risks from the acquired business and achieve a step-up in value, whereas sellers usually prefer share deals, which usually produce tax-exempt capital gains. Furthermore, the acquisition of a Swiss business or Swiss target company should be carefully structured, because the choice of acquisition tool will influence the subsequent tax rate.


In your experience, what are the most common challenges that arise? How do you assist your clients in overcoming these challenges?


The continued strength of the Swiss Franc and a stable economic situation in Switzerland are very attractive to Swiss acquirers what provides an incentive to invest in cross-border M&A transactions.


Kellerhals Attorneys at law has M&A specialists that can offer a breadth and depth of resources to buyers and sellers including tax, competition, employment, property and IT/IP. Kellerhals advises a range of different clients, including quoted, private and foreign-owned companies, financial institutions, equity investors, management


teams and


entrepreneurs on all aspects of buying and selling companies and businesses, often involving a cross-border element. LM


Contact:


dr. thomas Bähler, LL.M., Partner dr. Anna-Antonina Gottret, LL.M. Kellerhals Anwälte Effingerstrasse 1 Postfach 6916 CH 3001-Berne


dr. thomas Bähler dr. Anna-Antonina Gottret


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132