<h3>Introduction</h3>
Foreign investments in Swiss real estate are subject to restrictions imposed by the Federal Law on the Acquisition of Real Estate by Persons Abroad (Lex Koller). As a general principle, EU/EFTA nationals with (lawful) main residence (Wohnsitz) in Switzerland are not subject to Lex Koller.
As of January 1, 2021, further to the UK’s withdrawal from the EU and the expiry of the Brexit transition period, UK citizens do no longer benefit from this preferential treatment for EU/EFTA nationals.
<h3>General Rule for UK Nationals Post-Brexit</h3>
Going forward, UK nationals will only be exempt from Lex Koller if they have acquired a permanent residency permit (Niederlassungsbewilligung C) and established their main residence (Wohnsitz) in Switzerland. If this is not the case, direct investments by UK nationals are subject to Lex Koller restrictions. Under such restrictions, UK citizens remain entitled to acquire the following main categories of real estate, subject to certain requirements:
<ul>
<li>commercial real estate (note that there is a proposal by a parliamentary commission to impose temporary restrictions on all foreign investments into commercial real estate in the context of the COVID-19 pandemic – it is currently unclear whether this proposal will reach parliamentary debate);</li>
<li>residential real estate to be used as main residence under a temporary residency permit (Aufenthaltsbewilligung);</li>
<li>holiday homes or serviced apartments in certain designated areas (subject to restrictions such as yearly quotas and maximum size); and</li>
<li>residential or other non-commercial real estate that is inherited by way of intestate succession, or otherwise acquired from relatives in line of ascent or descent or from spouses or registered partners.</li>
</ul>
Not only direct investments by UK individuals are affected by Brexit: Swiss legal entities and investment vehicles should be mindful as well and consider that involvement of UK nationals as investors or beneficiaries could trigger Lex Koller restrictions, which might limit their ability to invest in non-commercial real estate.
<h3>Protection of Pre-Brexit Ownership</h3>
Switzerland and the UK have concluded various bilateral treaties to maintain the pre-Brexit status in certain areas. As part of this overall arrangement, the Agreement on Acquired Citizens’ Rights (AACR) mitigates the consequences of Brexit under the Lex Koller. The AACR will formally enter into force on March 1, 2021, but it has already been implemented effective as from January 1, 2021.
According to the AACR, any acquisition of Swiss real estate by UK nationals that was completed before January 1, 2021, remains unaffected by Brexit. Hence, there is no requirement to divest such real estate due to changed legal and factual circumstances (such as if a UK national gives up permanent residency).
In our view, the preservation of rights also applies to Swiss legal entities that own restricted Swiss real estate and that are (fully or partially) controlled by UK nationals.
<h3>Preservation of Pre-Brexit Temporary Residency</h3>
UK citizens who lawfully established (temporary) main residence in Switzerland before January 1, 2021, remain exempt from Lex Koller. According to official communication by the Swiss Federal Office of Justice, this also applies to UK nationals who (at least) applied for a temporary residency permit before then.
Grandfathering however only applies if pre-Brexit main residency persists at the time of acquisition and thus ceases to apply in case that Swiss residency is interrupted. UK nationals that intend to benefit from the AACR should thus make sure to maintain uninterrupted legal and factual main residence in Switzerland.
We believe that grandfathering of temporary main residence also applies to determine foreign control or ownership of Swiss legal entities or investment vehicles. Hence, the involvement of UK nationals cannot be considered foreign involvement and trigger Lex Koller restrictions for future investments of such entities for as long as grandfathering applies.
<h3>Protection of Cross-Border Commuting</h3>
UK citizens who were cross-border commuters between the UK and Switzerland or who applied for such permission prior to January 1, 2021, and who have retained their status will continue to benefit from the exemption under the Lex Koller and remain entitled to acquire a secondary home in the region of their Swiss workplace. Again, grandfathering only applies for as long as the migration status is maintained.

RZ_Preview_Brexit_LK_final

Impact of Brexit on UK Real Estate Investments in Switzerland

Immobilien

On June 14, 2021, HRS Real Estate AG announced that it has submitted a building application in Arbon for the construction of a hotel with 63 rooms, a restaurant and SPA and meeting facilities on the former Saurer area in Arbon, in the immediate vicinity of the lake and public transportation. The Liechtenstein company «b_smart selection», based in Gamprin-Bendern, which already operates 16 hotels and motels in Liechtenstein and Switzerland with an innovative self check-in concept, will operate the new «smart hotel» in Arbon.
Homburger advised the investor Toni Hilti Familien-Treuhänderschaft (THF) and the Toni Hilti family, respectively, with regard to all legal aspects of the acquisition of the hotel complex as well as in connection with the long-term lease agreement with the future operator.
The Homburger team advising in this transaction was led by partners Daniel Hasler and Stefan Gäumann and included senior associate Marc Schamaun, all members of Homburger&#8217;s real estate practice group.

Homburger advised Toni Hilti Familien-Treuhänderschaft in its investment in hotel project in Arbon 

Gesellschaftsrecht / M&A

Wettbewerb

Steuern

Arbeitsrecht und Vergütung für Führungskräfte

Kimberley Clark

On April 30, 2021, Kimberly-Clark completed the sale of its subsidiary Kimberly-Clark GmbH, including its paper mill in Niederbipp (Canton of Berne) as well as the «Tela» brand, to an entity owned by the Queck family, a German family of entrepreneurs which already owns several paper producers. The entity operating the paper mill has assumed the new name Tela GmbH.
Homburger advised Kimberly-Clark on the transaction. The Homburger team was led by partners Daniel Hasler and Daniel Häusermann (both Corporate / M&amp;A) and included partners Richard Stäuber (Competition) and Stefan Gäumann (Real Estate), counsel Peter Müller (Tax), and associates Stefan Luginbühl (Corporate / M&amp;A), Yves Bianchi (Competition) and Nicole Hilpert (Employment and Executive Compensation).

Kimberly-Clark closes sale of paper mill in Niederbipp (Switzerland)

Schiedsgerichtsbarkeit

Alpiq_bw

Alpiq and Bouygues Construction initiated <a href="https://www.alpiq.com/alpiq-group/media-relations/media-releases/media-release-detail/bouygues-construction-expands-its-arbitration-claim-against-alpiq" target="_blank" rel="noopener">arbitration proceedings</a> against each other in 2019 to resolve their disputes regarding the post-closing purchase price adjustment and alleged breaches of representations and warranties, with a total amount in dispute of approximately CHF 320 m. The matter was placed before a Swiss arbitral tribunal constituted under the Swiss Rules of International Arbitration comprising Prof. Sébastien Besson (Chairperson), Dr. Roberto Dallafior and Dr. Urs Weber-Stecher. It involved the analysis of complex accounting and valuation issues. On December 22, 2020, Alpiq announced that the parties had reached a <a href="https://www.alpiq.com/alpiq-group/media-relations/media-releases/media-release-detail/arbitration-proceedings-settled" target="_blank" rel="noopener">settlement</a> under which Alpiq agreed to refund CHF 54.5 m to Bouygues Construction.
&nbsp;
Homburger&#8217;s arbitration team was led by partner Mariella Orelli and included counsel Kirstin Dodge, associates Bénédict Thomann, Dilber Devitre, Okan Uzun, Pietro Meineri and junior associate Magdalena Stock (all Arbitration). Homburger&#8217;s arbitration team was assisted by Homburger&#8217;s Corporate M&amp;A partners Hansjürg Appenzeller and Daniel Häusermann and Real Estate partner Stefan Gäumann, as well as expert teams from BDO London led by Nick Andrews and David Mitchell. On the clients&#8217; side the matter was dealt with by Peter Schib, Head Group Legal, and Martin Schindler, Head Corporate M&amp;A and Infrastructure.

Homburger successfully represented Alpiq in arbitration proceedings arising from Alpiq's sale of its Engineering Services Business to Bouygues Construction in 2018

Stefan
Gäumann

Homburger advised Toni Hilti Familien-Treuhänderschaft in its investment in hotel project in Arbon

Kimberly-Clark closes sale of paper mill in Niederbipp (Switzerland)

Homburger successfully represented Alpiq in arbitration proceedings arising from Alpiq's sale of its Engineering Services Business to Bouygues Construction in 2018

Impact of Brexit on UK Real Estate Investments in Switzerland

Das Verfahren der dringlichen Feststellung gemäss SIA-Norm 150

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Stefan Gäumann

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Homburger advised Toni Hilti Familien-Treuhänderschaft in its investment in hotel project in Arbon

Kimberly-Clark closes sale of paper mill in Niederbipp (Switzerland)

Homburger successfully represented Alpiq in arbitration proceedings arising from Alpiq's sale of its Engineering Services Business to Bouygues Construction in 2018

Impact of Brexit on UK Real Estate Investments in Switzerland

Das Verfahren der dringlichen Feststellung gemäss SIA-Norm 150

Join the Team

Stefan Gäumann

Karriere

Sprachen

Zulassung

Teams

Stefan
Gäumann