Switzerland’s First FDI Regime

Switzerland is home to many successful international companies supplying domestic and foreign markets. On 19 December 2025, the Swiss parliament introduced Switzerland’s first general FDI regime, governed by the Federal Act on the Screening of Foreign Investments (Loi fédérale sur l’examen des investissements étrangers / Bundesgesetz über die Prüfung ausländischer Investitionen, IPG). It is expected that the IPG will enter into force in the course of 2027.

Parameters of the Swiss FDI Regime

The Swiss FDI regime pursues a pragmatic approach avoiding excessive intervention and honouring Switzerland’s tradition as a country open to foreign investment. The purpose of the IPG is only to prevent foreign state-controlled investors from acquiring Swiss companies if such acquisition threatens the public order or security of Switzerland.

Relevant transactions must be notified to Switzerland’s State Secretariat for Economic Affairs (SECO) based on a self-assessment of the parties involved. While only a few transactions per year are expected to be affected by the new regime, it is important that clients are aware of the following rules:

Unlike many foreign regimes, the Swiss FDI restrictions only apply to foreign state-controlled investors. Investments by foreign private investors are not covered. A transaction must only be notified and approved if it concerns the (direct or indirect) acquisition of a Swiss company or parts of it by a foreign state-controlled investor in a security critical sector and if certain turnover thresholds are met. A Swiss company is any undertaking that is (i) demanding or supplying goods or services, regardless of their legal or organisational form, and (ii) registered with the Swiss Commercial Register. A foreign state-controlled investor may be:

• foreign state bodies;
• undertakings headquartered outside Switzerland that are directly or indirectly controlled by a foreign state body;
• undertakings with legal capacity that are directly or indirectly controlled by a foreign state body; or
• any natural or legal person acting on behalf of a foreign state body.

The SECO may scrutinise any transaction whereby one or more such investors directly or indirectly acquire control, namely through a merger, acquisition or contract. The concept of acquisition of control used in the IPG is based on the established concept of acquisition of control under Swiss merger control rules pursuant to the Swiss Cartel Act. Unlike in other countries, the acquisition of non-controlling minority shareholdings does not trigger a notification obligation.

The Swiss FDI regime only affects certain sectors and distinguishes between (i) sectors that are particularly critical for public order and security, with a lower turnover threshold and (ii) areas with a higher turnover threshold.

• A de minimis threshold of an average global annual turnover of at least CHF 10 million or an average headcount of at least 50 full-time equivalents over the past two years applies to Swiss companies that:
  • manufacture goods or transfer of intellectual property crucial for the operational capability of the Swiss Armed Forces, federal security institutions, and space programmes, provided that their export is subject to authorisation under the Swiss War Material Act or the Swiss Goods Control Act;
  • operate or control the domestic transmission grid, certain distribution grids, large power plants, or high-pressure natural gas pipelines;
  • supply water to at least 100,000 inhabitants; or
  • provide central security-related IT systems or IT services.
• A threshold of an average global annual turnover of CHF 100 million over the past two years applies to Swiss companies in the following security-critical sectors:
  • hospitals;
  • R&D, production or distribution of pharmaceutical products, medical devices, vaccines, and PPE;
  • operation or control of important domestic hubs (ports, airports, transhipment facilities for combined transport);
  • operation or control of railway infrastructure;
  • operation or control of food distribution centres;
  • operation or control of domestic telecommunications networks;
  • operation or control of financial market infrastructures; or
  • systemically important banks.
• The Swiss Federal Council may (i) widen the scope for a limited period of 12 months (extendable up to 24 months in total) if necessary to ensure public order or security, or (ii) exempt transactions from the approval requirement under the IPG if public order and security are otherwise safeguarded.

Approval Procedure

In cases of doubt, the Swiss company may apply to the SECO for a binding preliminary assessment on the authorisation requirement of its acquisition. If such assessment or a self-assessment indicates that the notification of the transaction is required, the foreign state-controlled investor must notify the SECO and request approval prior to closing of the transaction. The standstill obligation is enforced by administrative measures and administrative penalties of up to 10% of the global annual turnover of the Swiss company over the past two years.

Within one month of receipt of the notice, the SECO, after consulting other relevant administrative bodies, decides whether the acquisition can be approved directly or requires an examination procedure. In case of an in-depth examination, the SECO decides within three months whether to approve the transaction. Approval is deemed granted if the deadline expires without a formal decision.

The decision rendered by SECO can be appealed to the Swiss Federal Administrative Court by either the Swiss company or the foreign state-controlled investor.

Practical Implications

Foreign state-controlled investors should be aware of the new Swiss FDI regime. Particularly, affected parties should consider the potential delays to the closing of a transaction by the approval process (e.g., by providing for a realistic long-stop date) and govern the consequences of a potential non-approval by SECO.

Since the new Swiss FDI regime applies to transactions closed after the entry into force of the IPG, its implications should be taken into consideration already in transactions, which are negotiated and signed in 2026.

In the meantime, undertakings should also keep in mind that transactions involving a change of ownership in a Swiss real estate company may still fall within the scope of application of the Federal Act on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents and require special official permits.