On 26 September 2025, the Swiss Federal Parliament passed the “Swiss Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners” (the “Act”). The Act establishes a central transparency register operated by the Swiss Federal Office of Justice and introduces comprehensive reporting duties for companies, shareholders, beneficial owners, trustees, and certain foreign legal persons with ties to Switzerland. The law, expected to come into force on or around 2027, aims to strengthen the fight against money laundering, terrorist financing, and other illicit financial activities.
The Act applies to most Swiss companies, some foreign legal entities with branch office or whose actual administration is located in Switzerland or with assets in Switzerland, and trustees who are domiciled or have their registered office in Switzerland, or manage trusts in Switzerland. It excludes Swiss associations, Swiss sole proprietorships, Swiss foundations, pension funds, and state-owned entities. Boards of directors will be required to identify, document, and report beneficial ownership information—defined as natural persons holding at least 25% of shares or voting rights, or otherwise exercising control. If no such individual exists, the highest-ranking manager will be recorded as the beneficial owner.
Shareholders, beneficial owners, and third parties must cooperate by providing and updating information within one month of any changes. For foreign legal entities subject to the Act, a Swiss representative must be appointed (or a domicile for service in Switzerland), and transparency register must be maintained.
Trustees subject to the Act must identify and maintain records of trust’s beneficial owners, who are settlors, trustees, protectors, beneficiaries, and other controlling persons of trusts. However, trust information will not be entered into the transparency register.
The transparency register will not be public but will be accessible to selected Swiss authorities and financial intermediaries and advisors subject to the Swiss Anti-Money Laundering Act. Criminal sanctions, including fines up to CHF 500,000, will apply to intentional violations of disclosure and reporting obligations. Negligence, however, falls outside the scope of liability.
Swiss companies and foreign entities affected by the law should already begin reviewing their reporting structures and compliance processes to prepare for the transition from the current GAFI Rules to the new, more stringent framework once it enters into force.
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The information provided in this article is of a purely general nature and is not a substitute for specific advice that may be requested here.
