On 21 June 2019 the Federal Assembly adopted the Federal Act (the Act) implementing the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Act has consequences for each Swiss company that has outstanding bearer shares or is still able to issue bearer shares.
Previously, on 1 July 2015, the Federal Act on the implementation of the 2012 revised recommendations of the Financial Action Task Form had come into force (the 2015 Act). This piece of legislation aimed to intensify the fight against money laundering in Switzerland.
Consequently, everybody acquiring bearer shares in a Swiss company had to report the acquisition to the company in question, within a one-month deadline. If bearer shares were obtained, either alone or with someone else, and reached the threshold of 25% of the share capital or the voting rights, the identity of the ultimate beneficial owners of the bearer shares to the company had to be disclosed. Not doing so would lead to the loss of voting- and dividend rights for as long as the reporting had not taken place. The right to dividend would be lost for the period in which the reporting had not taken place.
Swiss companies had to maintain a register of holders of bearer shares and ensure access in Switzerland for a period of 10 years. Switzerland is now taking a further step in the fight against money laundering.
The ACT - What you need to know
Most importantly, the issuance and use of bearer shares by Swiss companies will become impossible.
Bearer shares can no longer be issued after 1 January 2020 As of 1 January 2020, Swiss companies that so far were able to issue bearer shares under their articles of association will no longer be able to do so. Any company able to issue bearer shares should arrange to amend their articles of association during the transition period leading up to 1 July 2022. If not done by this deadline, any other changes to the articles of association will be rejected by the commercial register. At the time of amendment, the issued bearer shares will also be converted into registered shares.
Bearer shares will be converted automatically on 1 July 2022 If the issued bearer shares have not been converted timely, they will be converted into registered shares by operation of law on 1 July 2022. All other particulars regarding the shares (e.g. nominal value and voting rights) will remain as they were. The company having issued the bearer shares will be...