PEFs in Switzerland - read in the blog of the company COREDO

PEFs in Switzerland

Updated: 20.11.2020

In Switzerland, SICAFs and Swiss LPs belong to popular ways of registering a company. Swiss legislation underwent considerable changes regarding distribution, custody, and management of CISs after AIF Managers have adopted the EU Directive. Now there are three main regulations that control SICAF and Swiss LPs: FINMA-CISO, CISA, and CISO.

Registration of a Swiss LP

FINMA governs Swiss LPs that embody CISs that normally are dedicated to AI projects, real estate, and private equity. Usually, there are one or more general partners that run Swiss LPs and bear unlimited responsibility to delegate some tasks to third parties, of course in the best interest of their companies. In addition, asset management functions of GPs can be delegated to CIS managers.

Partners with limited liabilities, individuals who invest in Swiss LPs, do not have a right to manage Swiss LPs. Yet they are entitled to governing and receiving information such as accessing quarterly financial reports and information on financial accounts. A presence of a qualified investor is necessary to open an investment company in Switzerland.

Registration of SICAF

The only goal of SICAFs that are a Swiss analog of LLCs is to manage the company’s assets. They have a separate legal personality status from their investors and are not allowed to become involved in business activities.

If their stakeholders are qualified investors and their stocks are traded in stock exchanges, SICAFs are not governed by CISA. FINMA does not regulate SICAFs either.

Establishment of PEFs

It takes authorization from FINMA and an application review by an FAOA-recognized audit company to set up Swiss LPs. Unless any complications occur or FINMA happens to be processing an overwhelming number of applications, the process of receiving a permit takes around 3-4 months.

The price of registering a Swiss LP charged by FINMA is up to 40 000 Swiss francs. Based on Swiss LP’s assets, the regulator calculates an annual supervisory fee as well.

No capital requirements for Swiss LPs exist. The minimum share capital for GPs is 100 000 Swiss francs that should be paid fully. FINMA then has an exclusive entitlement to approve GPs as well as register partnerships in Switzerland.

Also, it is necessary for Swiss LPs to hire Swiss auditors, paying and depository agents that are completely independent.

Investment managers

Investment managers must fulfill certain financial requirements to obtain a license from FINMA. The conditions are to have a minimum share capital of 200 000 Swiss francs and to guarantee the adequacy of capital, which must be ensured.

As it is clear from this post, exhaustive knowledge of Swiss legislation can come extremely in handy while establishing investment funds in Switzerland. To cultivate a deeper knowledge of Swiss regulatory compliance in the financial sector contact us in COREDO. We will definitely help you during the company registration process.


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