Switzerland plans to introduce a foreign direct investment screening regime with effect from 1 January 2027. The regime is intentionally narrow and applies only to acquisitions of control by foreign state investors in Swiss entities active in designated critical sectors. Private investors are excluded, reflecting a clear policy choice to address security concerns without restricting general foreign investment.
Foreign state investors are defined broadly to include not only foreign governments and public authorities, but also entities and individuals directly or indirectly controlled by a foreign state or acting on its behalf. The definition is intended to capture indirect or concealed state influence, including acquisitions driven by state funding or instructions. The Federal Council may exempt investors from certain countries from the approval requirement, with EU and EFTA states identified as possible beneficiaries.
Only acquisitions conferring control are subject to notification, in line with Swiss and EU merger control standards. Minority investments without controlling rights are excluded. The target must also be an entity registered in the Swiss Commercial Register, which excludes transactions involving only assets or non-incorporated activities in Switzerland.
The regime applies exclusively to defined critical sectors and distinguishes between highly sensitive sectors and other critical sectors. In highly sensitive sectors, the regime applies if, over the previous two years, the target employed at least fifty full time equivalents on average or achieved annual worldwide turnover of at least CHF 10 million. These sectors include national security and defence, strategic energy infrastructure, high pressure gas pipelines, large scale water supply systems, and core security related IT systems. For other critical sectors, including pharmaceuticals, transport hubs, telecommunications, railway infrastructure, and systemically important financial institutions, a higher threshold applies, requiring average annual worldwide turnover of at least CHF 100 million.
Notified transactions are approved unless there are indications that they may endanger public order or security. The assessment may consider factors such as the investor’s security track record, espionage risks, applicable sanctions, the substitutability of the relevant goods or services, and access to sensitive security related information or protected personal data. The authorities enjoy broad discretion in this assessment.
The procedure is conducted by the State Secretariat for Economic Affairs. A one month preliminary review follows a complete notification and determines whether the transaction can be cleared or requires an in depth review of up to three additional months. In sensitive or politically significant cases, the final decision rests with the Federal Council. The regime is expected to result in only a limited number of notifications each year.
