SWITZERLAND’S FEDERAL REGISTER OF BENEFICIAL OWNERS
INTERNATIONAL STANDARDS AND SWITZERLAND’S ALIGNMENT
For several years, Switzerland has operated under sustained international scrutiny regarding the transparency of legal entities and the identification of their ultimate controlling persons. Globally, beneficial ownership has now long evolved from being a technical compliance matter to a central component of efforts to combat money laundering, corruption, sanctions evasion and broader economic crime. Jurisdictions unable to reliably demonstrate effective access to beneficial ownership information have faced increasing reputational, regulatory and comparative pressure.
Switzerland has been particularly affected by such dynamics. The Swiss financial centre, by virtue of its global reach, is exposed to risks associated with complex cross-border structures. The 2021 report of the Swiss interdepartmental coordinating group on combating money laundering and terrorist financing and high-profile international investigations, including the Panama Papers and Swiss Leaks, further illustrated how layered corporate arrangements and nominee structures may be used to obscure the identity of those ultimately controlling assets.[1] More recently, the implementation of sanctions following Russia’s invasion of Ukraine highlighted how complex legal structures can be deployed to circumvent coercive measures.[2]
The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes issued recommendations to Switzerland in 2020 concerning the transparency of beneficial owners of legal persons.[3]
In March 2022, the Financial Action Task Force revised Recommendation 24 and its interpretative note to strengthen requirements concerning the transparency of legal persons.[4]
In parallel, the European Union has also been strengthening its transparency framework through successive Anti-Money Laundering and Terrorism Financing Directives. In particular, the Directive 2015/849 requires all Member States to establish accessible registers of beneficial owners of legal entities and other legal arrangements.[5] While this Directive initially provided for access to the register to “any member of the general public”, the Court of Justice of the European Union ruled in its judgment of 2022, Luxembourg Business Registers, that such access was disproportionate and in violation of the fundamental rights of the Charter of the European Union.[6] Further to this judgment, the relative provisions were amended. As a result, individuals must demonstrate that they have a legitimate interest in order to access the information in the registers.[7]
Finally, beneficial ownership transparency plays a role in the EU’s designation of high-risk third countries for anti-money laundering purposes and in the evolution of its tax cooperation criteria. Divergence from recognised standards carries the potential risk of inclusion on “black” and “grey” lists, with attendant reputational and financial consequences.[8]
It is within this international context that Switzerland adopted the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners.[9] The entry into force of the Law is currently planned for the second half of 2026. The Act establishes a federal register of beneficial owners and sets out uniform obligations for identifying, recording and communicating controlling natural persons. The Act is to be supplemented and implemented by an Ordinance of the Federal Council,[10] a draft of which is currently being consulted on by the various political stakeholders.
As will be discussed further on, the Swiss reform does not provide for unrestricted access to the register. It ensures that certain Swiss authorities, financial intermediaries and advisers can access reliable, up-to-date beneficial ownership information when exercising certain functions.
SCOPE OF APPLICATION FOR SWISS ENTITIES AND RELEVANT FOREIGN STRUCTURES
At the outset, the Act applies to all Swiss legal entities, with the exception of associations and foundations. These include, in particular, companies limited by shares, limited liability companies, cooperatives, limited partnerships and investment companies with variable capital (SICAVs).[11] This delineation reflects a functional approach, targeting all Swiss legal entities commonly used for operating, holding or investment purposes.
The regime also extends to foreign entities where a sufficient Swiss nexus exists.[12] The Act defines three types of nexuses. A foreign entity falls within scope where it maintains a Swiss branch entered in the commercial register, where its effective administration is located in Switzerland, or where it owns or acquires a Swiss real estate within the meaning referenced by the Federal Act on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents. The Draft Implementing Ordinance extends the group of entities with effective administration in Switzerland to include all entities subject to transparency requirements in accordance with the benchmark criteria of the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum).[13]
The scope of application is therefore deliberately broad. Private structures relying on foreign vehicles while centralising management, administration, or assets in Switzerland may therefore be captured, irrespective of their place of incorporation.
The Act further addresses trusts by reference to trustees who have their domicile or registered office in Switzerland or who administer trusts in Switzerland, with the exception of trustees subject to the Anti-Money Laundering Act.[14] This new provision seems to exempt FINMA[15] regulated trustees. However, rulings may be necessary regarding dedicated trust companies and the treatment of companies underlying to trusts remains open for the moment.
Exemptions exist and are expressly enumerated. Listed entities, subsidiaries owned directly or indirectly by more than 75% by one or more listed entities, occupational pension institutions and institutions serving occupational pension purposes and entities owned directly or indirectly by more than 75% by public authorities fall outside the scope.[16]
BENEFICIAL OWNERSHIP UNDER THE ACT
The Act defines the beneficial owner as the natural person who ultimately controls a legal entity.[17]
Control is thus the decisive criterion.
This criterion is met when the natural person holds, directly or indirectly, alone or acting in concert, at least 25 per cent of the capital or voting rights.[18]
Participation is held indirectly when it is held through one or more natural persons, legal entities, partnerships or intermediary trusts. An indirect holding allows the beneficial owner to control the company when it represents at least 50 per cent of the capital or voting rights of one or more intermediate companies, which themselves hold, directly or indirectly, at least 25 per cent of the capital or voting rights of the company in question.[19]
Control, however, is not limited to equity participation. The LETA captures “control” exercised “by other means”, whether it is direct or indirect.[20]
Pursuant to the Draft Implementing Ordinance, “control by other means” exists in particular where a natural person is able to exert a decisive influence over the legal entity, notably through the right to appoint or remove a majority of the members of the supreme management or administrative body, through veto or approval rights in respect of strategic decisions, or through binding contractual arrangements or comparable factual circumstances.[21] The existence of other forms of “control by other means” may also be indicated in the presence of formal or informal agreements with shareholders or partners, or other equivalent agreements, debt instruments such as convertible loans or equity loans, articles of association or equivalent documents of the entity, links between family members, or trust relationships, whether formal or informal.[22]
These indicators are non-exhaustive and must be assessed in light of the overall governance and economic reality of the structure concerned.
Finaly, where no natural person can be identified under these criteria, the LETA provides a subsidiary solution in which the highest-ranking member of the management body is deemed the beneficial owner.[23]
CORE OBLIGATIONS FOR IDENTIFICATION, VERIFICATION AND COMMUNICATION TO THE FEDERAL REGISTER OF BENEFICIAL OWNERS
Pursuant to the Act, the entity shall be required to identify its beneficial owners.
In doing so, it collects, with supporting documentation, their first and last names, date of birth, nationality, address and country of residence, and the necessary information on the nature and extent of the control exercised.[24] The latter concerns information allowing to determine whether the person exercises control alone or in concert with others and to what extent, directly or indirectly, or through the holding of a shareholding or in some other manner.[25]
The entity is notably required to collect information on natural persons, legal entities, partnerships or trusts in the presence of chains of control with at least two intermediaries, of a control exercised by a trust, or in the case of a fiduciary relationship.[26]
Specific provisions shall apply for entities that are held by listed entities.[27]
If the entity cannot identify or adequately verify the beneficial owner, it must record this fact and the measures taken in that direction.[28]
All the information must be kept up to date, with its supporting documentation, so that they can be accessed in Switzerland for ten years after the person concerned has ceased to be a beneficial owner.[29]
Once the information is collected, it must be communicated, with the supporting documentation, to the federal register of beneficial owners (also called, the “transparency register”) within one month of registration in the Swiss commercial register, or in the case of a foreign entity, within one month of becoming subject to the law.[30]
Furthermore, the Act establishes that obligations to collaborate in the collection, verification and communication of information related to beneficial ownership also apply to shareholders, trustees and beneficial owners themselves.[31]
ACCESS REGIME AND REPORTING OF DISCREPANCIES
The federal register of beneficial owners is maintained in electronic form by the Federal Office of Justice.[32]
Online access to the register is strictly regulated by statute and not public.
In essence, the register is designed to serve competent authorities and financial intermediaries and advisers in the performance of their legally defined tasks.
Among these authorities, the following will have full access to the recorded information: police, administrative and judicial authorities, bodies of the Confederation and the cantons; the Money Laundering Reporting Office Switzerland (MROS); the competent authorities for administrative assistance in tax matters; the supervisory bodies established under the Federal Embargo Act; and the enforcement authorities under the Federal Act on Assets of Illegal Origin.[33]
The following authorities will be able to consult the recorded information online, with the exception of deleted data: the administrative supervisory authorities provided for in the Anti-Money Laundering Act, as well as self-regulatory bodies and supervisory bodies; the Federal Intelligence Service; the land registry offices, the cantonal supervisory authorities and the federal supervisory authority in application of the provisions of the Civil Code relating to real property rights; the enforcement authorities of the Federal Act
on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents; the Federal Customs and Border Security Office; the Federal Office of Police and the competent cantonal authorities, in the performance of the tasks set out in the Federal Act on Weapons, Weapon Accessories and Ammunition and by the Federal Act on Explosive; contracting authorities, for the purpose of examining or awarding a public contract, where they are subject to federal or cantonal public procurement law; the administrative units of the Confederation, Cantons or municipalities that are responsible for examining and paying financial assistance and compensation; and, the competent enforcement bodies for old-age and survivors' insurance, disability insurance, occupational pension provision, including the BVG/LPP substitute institution and BVG/LPP guarantee fund, loss of earnings allowance, unemployment insurance, supplementary benefits, family allowances and accident insurance in the field of prevention, detection and combating of insurance fraud and undeclared work.[34]
Financial intermediaries and advisers as defined under the new Anti-Money Laundering Act will be able to consult the transparency register information online, deleted information and information relating to the author of a report excepted, to the extent that such data is necessary for the fulfilment of the due diligence obligations.[35]
While these intermediaries must report to the federal register any discrepancies between the data consulted and the data in their possession, after having given the client a reasonable period of time to resolve the issue directly with the federal register, authorities must report any doubts regarding the accuracy, completeness or timeliness of the information relating to the beneficial owner.[36]
TRANSITION AND ENTRY INTO FORCE
The LETA was adopted by Parliament on 26 September 2025. The referendum period has expired without a popular vote being requested. The Act will therefore enter into force on a date to be determined by the Federal Council, currently expected in the second half of 2026.
The legislation provides for transitional periods following entry into force.
Legal entities governed by Swiss private law are required to make the communication within one month of any alteration to their registration in the commercial register occurring after the entry into force of this Act, no later than the maximal deadlines specified below: [37]
- Legal entities whose beneficial owners are all registered in the commercial register as partners or members of the governing body are required to make the communication no later than two years after this Act comes into force.
- For other companies, the maximum deadlines are:
- Within three months for limited companies required to submit their accounts to the regular audit of an auditing body.
- Within four months for other companies required to submit their accounts to the regular audit of an auditing body
- Within five months for limited companies that do not meet the conditions for ordinary control
- Within six months for other companies that do not meet the conditions for limited control and for other legal entities.
With regard to foreign entities, the deadline for communication is six months.[38]
CRIMINAL LIABILITY
The Act also contains specific criminal provisions.
Intentional failure to identify, report or update beneficial ownership information may be sanctioned by a fine of up to CHF 500’000.-.[39]
CONSIDERATIONS FOR PRIVATE CLIENTS AND FIDUCIARIES
Structures that combine foreign vehicles with Swiss administration, governance or assets sit squarely within the regime’s field of vision.
Family holding structures, private investment platforms and succession vehicles often rely on layered ownership and informal governance arrangements. The Act’s control-based approach may require such arrangements to be made explicit.
Trust structures administered from Switzerland warrant particular attention, since there is an exemption for regulated trustees, but the obligations of dedicated trust companies and underlying entities administered in Switzerland remain uncertain.
While with the LETA, Switzerland opts for a non-public model, the introduction of a completely new registry will bring considerable workload and uncertainty to the market of fiduciary and trustee services where balancing will be necessary between complex structures, new obligations, exemption regimes and client expectations.
At SKANDAMIS AVOCATS, we are closely monitoring the planning of the implementation of the LETA. Vehicles whose beneficial ownership remains vague, often for family reasons, will need to resolve ambiguity, and an important number of questions remain open namely regarding trusts and their underlying companies. Rulings will likley be necessary.
At SKANDAMIS AVOCATS, we are advising clients on the future implementation of the LETA and its impact on cross-border structures.
[1] Federal Council’s Message to the parliament concerning the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners, FF 2024 1607, section 1.1.1.
[2] Ibidem.
[3] OECD (2020), Global Forum on Transparency and Exchange of Information for Tax Purposes: Switzerland 2020 (Second Round): Peer Review Report on the Exchange of Information on Request, Global Forum on Transparency and Exchange of Information for Tax Purposes, OECD Publishing, Paris.
[4] FATF (2023), Guidance on Beneficial Ownership for Legal Persons, FATF, Paris, section 6, paragraph 10.
[5] Article 30, paragraph 3, Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Anti-Money Laundering and Terrorism Financing Directive – AMLD IV).
[6] Judgment of the Court of Justice of the European Union (Grand Chamber) of 22 November 2022, Joined Cases C-37/20 and C-601/20, WM, Sovim SA v. Luxembourg Business Registers (Beneficial owners register), paragraph 72 et seq., in particular paragraphs 86 and 88.
[7] Article 12, Directive (EU) 2024/1640 of the European Parliament and of the Council of 31 May 2024 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Anti-Money Laundering and Terrorism Financing Directive – AMLD VI).
[8] Federal Council’s Message to the parliament concerning the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners, FF 2024 1607, section 1.1.1.
[9] Hereinafter, “LETA” or “the Act”.
[10] Hereinafter, “Draft Implementing Ordinance”.
[11] Article 2, paragraph 1, letter a, LETA.
[12] Article 2, paragraph 1, letter b, LETA.
[13] Article 1, paragraph ,1 letter b, Draft Implementing Ordinance.
[14] Article 2, paragraph 2, LETA.
[15] Swiss Financial Market Supervisory Authority.
[16] Article 3, LETA.
[17] Article 4, paragraph 1, LETA.
[18] Ibidem.
[19] Article 6 LETA ; Article 2, paragraphs 2 and 3, Draft Implementing Ordinance.
[20] Articles 4 and 6 LETA ; Article 3, paragraph 3, Draft Implementing Ordinance.
[21] Article 3, paragraph 1, Draft Implementing Ordinance.
[22] Article 3, paragraph 2, Draft Implementing Ordinance.
[23] Article 4, paragraph 2, LETA.
[24] Article 7, paragraphs 1 and 2, LETA.
[25] Article 6, paragraphs 1, 2 and 3, Draft Implementing Ordinance.
[26] Article 7, paragraphs 1 and 2, Draft Implementing Ordinance.
[27] Article 7, paragraph 3, LETA ; Article 9, paragraph 2, LETA.
[28] Article 8, paragraph 2, LETA.
[29] Article 8, paragraph 1 and 3, LETA.
[30] Article 9, paragraph 1 and 4, LETA.
[31] Article 13, 14, and 16, LETA.
[32] Article 20, paragraphs 1 and 2, LETA.
[33] Article 26, paragraph 1, LETA.
[34] Article 26, paragraph 2, LETA.
[35] Article 27, LETA.
[36] Articles 30 and 31, LETA.
[37] Article 51, paragraphs 1, 2 and 3, LETA.
[38] Article 53, LETA.
[39] Article 43, LETA.
