Nicolas Birkhäuser and Xaver Dill (Niederer Kraft Frey) authored this publication

Introduction

Apart from limited sector-specific regulations, there is currently no general FDI regime in Switzerland. On December 19, 2025, the Swiss Parliament approved the entry into force of a new FDI Act Investitionsprüfgesetz. The new FDI Act will establish a cross-sector screening mechanism, entering into force in 2027 at the earliest.

Summary of major changes in 2025

• Among the issues under debate in the Swiss Parliament was the scope of the new FDI Act, in particular whether the future FDI Act should apply not only to state-controlled investors but to all foreign investors, according to the National Council's proposal, and whether, in addition to public order and national security, the supply of essential goods and services should be included as a protected interest.
• The National Council approved the Council of States' narrower version in its session on December 2, 2025. According to the proposal of the Council of States, the future FDI Act will apply only to foreign state-controlled investors and only to national security-critical sectors. The supply of essential goods and services will be included as a protected interest.
• Both chambers of the Swiss Parliament approved the new FDI Act in their final votes on December 19, 2025. The new FDI Act is subject to a facultative referendum period and will enter into force in 2027 at the earliest.

Who files?

While the new FDI Act will enter into force in 2027 at the earliest, under the current sector-specific regulations no specific types of foreign investors are covered. There is currently no specific legislation covering state-owned entities and sovereign wealth funds.

In certain business sectors, government licensing conditions include specific requirements regarding foreign investors, while licensing conditions in other business sectors do not specifically differentiate between foreign and domestic applicants and investors.

In the case of banks and securities dealers, "foreigners" are covered. With respect to real estate in particular, foreign individuals or companies, and Swiss nationals buying real estate as a proxy for foreigners, are covered by the legislation.

When the new FDI Act enters into force, foreign state investors will be covered under the new FDI Act. "Foreign state investor" means (i) a foreign state body, (ii) an undertaking with its head office outside Switzerland that is directly or indirectly controlled by a foreign state body, (iii) an undertaking that is directly or indirectly controlled by a foreign state body, or (iv) a natural or legal person acting on behalf of a foreign state body.

The Federal Council may exempt specific foreign state investors if Switzerland maintains close security cooperation with their home country, thereby mitigating risks to public order.

Types of deals reviewed

While there is currently no general FDI regime in Switzerland, sector-specific regulations relevant to foreign investors apply in numerous sectors and industries.

Business sectors with specific licensing requirements for foreign investors include banks and securities dealers; real estate; radio and television; telecommunications; nuclear energy; and aviation.

Business sectors subject to licensing without explicit licensing requirements for foreign investors include the financial industry and insurance, other than banks and securities dealers; casinos and gambling; defense; postal services; commercial shipping vessels; power and gas installations; and railways.

In addition, several companies that provide key critical infrastructure are owned or controlled by federal, cantonal or local agencies. These agencies may exercise de facto foreign and domestic investment control with respect to these companies.

The new FDI Act defines the sectors in which takeovers by foreign state-owned undertakings will require notification. The new FDI Act distinguishes between (i) undertakings that are particularly critical for public order and security and (ii) undertakings in sectors in which risks to public order and security cannot be completely ruled out. For undertakings in the second category, a higher turnover threshold applies.

The first category consists of undertakings in sectors traditionally deemed relevant for national security. This includes undertakings that (i) manufacture armaments or dual-use goods, (ii) operate transmission grids, certain distribution grids, large power plants or high-pressure natural gas pipelines, (iii) supply water to at least 100,000 inhabitants, or (iv) operate central security-related information technology ("IT") services.

The second category consists of (i) hospitals, (ii) undertakings in the pharmaceutical and medical sector, (iii) undertakings that operate or control important domestic hubs, such as airports, (iv) undertakings that operate or control railway infrastructure, (v) undertakings that operate or control food distribution centers, (vi) undertakings that operate or control telecommunications networks, (vii) undertakings that operate or control financial market infrastructure, and (viii) systemically important banks.

The Federal Council may subject further categories of undertakings to the notification requirement if it deems this necessary for public order and security for a limited period of 12 months, with the possibility of a further 12-month extension.

Scope of the review

Until the new FDI Act enters into force, the scope of application of the FDI regime depends on the specific industry or sector, and the respective laws and regulations of that sector must be considered.

According to the new FDI Act, the domestic companies operating in particularly critical sectors are divided into two categories with different thresholds.

Sectors traditionally deemed most relevant for national security include the manufacture of armaments or dual-use goods, the operation of energy infrastructure or water supply, as well as security-related IT services. Acquisitions of such domestic companies with more than 50 full-time employees worldwide or a worldwide annual turnover exceeding CHF 10 million will require approval.

Sectors deemed less relevant for national security include university hospitals; companies involved in the research, development, production and distribution of medicines, medical products or vaccines; as well as centralized transport, distribution, telecommunications or financial market infrastructures and systemically important banks. Acquisitions of these domestic companies with a worldwide annual turnover exceeding a higher threshold of CHF 100 million will require approval.

An acquisition will be approved if there is no reason to assume that public order or security is jeopardized.

Review process timeline

As there currently is no general FDI regime in Switzerland, there is no standard notification proceeding, and the applicable laws generally do not provide for specific approval or waiting periods. The timeframe for review depends on the relevant sector-specific regulation.

Under the current rules, for banks and securities dealers, a license may generally be obtained within approximately six months.

With respect to real estate (Lex Koller), timing may depend in particular on the location of the real estate in Switzerland and the complexity of the case.

The timing required to obtain licenses in other business sectors depends significantly on the complexity and individual factors of the case. Careful planning and a strategic approach are therefore essential to ensure required approvals are obtained in a timely manner.

The approval procedure under the new FDI Act is based on the same principles as the merger control process. The application for approval must be filed with the State Secretariat for Economic Affairs ("SECO") prior to completion of the takeover.

The new FDI Act provides, in analogy to the merger control procedural rules, a two-step review process. SECO, in collaboration with other concerned administrative bodies and after consultation with the Federal Intelligence Service ("FIS"), will decide within one month of receiving a complete application whether the takeover can be approved directly or whether an in-depth examination (Phase 2) must be initiated. SECO and the concerned administrative bodies must agree in order to grant direct approval; each has a right of veto. If no agreement is reached, Phase 2 must be initiated.

In Phase 2, SECO, again in collaboration with the concerned administrative bodies and after consultation with the FIS, will decide within three months whether the takeover will be approved. SECO and the other concerned administrative bodies must agree on the decision. If the three-month deadline expires without a decision, approval is deemed granted. If SECO or another concerned administrative body opposes approval, or if the decision has significant political implications, the Federal Council will decide on approval of the takeover.

A domestic undertaking may apply to SECO for a binding ruling on whether its takeover is potentially subject to approval, i.e., whether it falls within one of the sectors in which takeovers by foreign state-owned undertakings require notification. The ruling is independent of the identity of the acquirer. SECO will notify its decision within two months. The decision is valid for a period of 12 months and may be extended for an additional 12 months. Any material changes relating to the undertaking, in particular with respect to its business activities and size, must be notified to SECO.

How foreign investors can protect themselves

The rules outlined above must be followed. In addition, as a general matter, early engagement with, and pre-notification contacts and discussions with, the competent authority are typically welcome and helpful in Switzerland. This may vary depending on the specific sector.

If the Federal Council denies approval of the takeover, both the foreign investor and the domestic undertaking are entitled to appeal the decision to the Federal Administrative Court. A further appeal may be made to the Federal Supreme Court.

In the case of banks and securities dealers, decisions of the Financial Market Supervisory Authority may generally be appealed to the Federal Administrative Court, with a further appeal available to the Federal Supreme Court.

With respect to real estate, decisions of the cantonal approval authority may be appealed to cantonal appeal bodies. A further appeal of the final cantonal decision may be made to the Federal Supreme Court.

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