Investment Funds in Switzerland
Investment Funds in Switzerland
Updated on Tuesday 14th June 2016 Rate this article
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Retail funds in Switzerland
Retail funds, which are addressed to less experienced investors, are regulated by a new set of rules that were approved by the Swiss authorities in 2015. The Acts were created to harmonize with the EU’s main directives. The Acts are the following:
• Financial Services Acts – established to set out new rules referring to the investor protection; the act will become applicable in 2017-2018;
• Financial Institution Acts – the Act will enter into force in 2017-2018 at it refers to the way in which licenses are issued for financial institutions set up in Switzerland;
• Financial Market Infrastructure Act – it became applicable from the 1st of January 2016 and it improved the regulations of the financial market infrastructure.
It is important to know that the local legislation refers mainly to open-ended funds, as the close-ended funds market established here at the moment is rather small; our team of Swiss lawyers can provide more details on the applicable regulations.
Open-ended funds in Switzerland can be set up as the following:
• contractual investment funds;
• investment company with variable capital (SICAV).
Taxation of open-ended funds in Switzerland
Under the rules and regulations of the local market, open-ended funds are taxed under the following scheme:
• SICAVs and contractual investment funds are not subjected to corporate income tax;
• capital tax is applicable to directly-owned real estate funds;
• withholding tax is generally applied at the rate of 35% of the profit distributions;
• the issuance of shares is not subjected to the transfer stamp tax.
Local investors opening funds in Switzerland are taxed on a different taxation scheme for the above mentioned taxes.
Investors who need to receive more details on the legislation referring to the investment funds in Switzerland can address to our Swiss law firm for an in-depth presentation.