SLIDE 1
Establishment of a Swiss Presence, Application of Swiss Law and Swiss Arbitration
Seoul, 18 September 2018 Tino Gaberthüel and Harold Frey
SLIDE 2 Why Switzerland?
- Political and economic stability
- Excellent infrastructure
- Efficient and reliable banking and payment system
- Reliable legal framework (e.g. IP protection)
- Globalised economy
(KOF Index of Globalisation #5)
- Worldwide lowest level of corruption
(Corruption Perception Index #5)
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SLIDE 3 Why Switzerland?
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Education Education Technology Technology Innovation Innovation
QS Top University 2019 Ranking: Swiss Federal Institute of Technology (ETHZ) Rank 7 École Polytechnique Federale (EPFL) Rank 22
Source: IMD World Competitiveness Center 2017
SLIDE 4 Why Switzerland?
- Global champions and cutting-edge start-ups (incl. IT, life science, pharma,
biotech/medtech, fintech and blockchain) located in Switzerland
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SLIDE 5 Switzerland and the world
- Close and stable ties to Europe (and the rest of the world)
- 30 free trade agreements with 40 partners (incl. Republic of Korea)
- 108 double taxation treaties (incl. Republic of Korea)
- Major foreign companies with European HQs or key operations in Switzerland
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SLIDE 6 Foreign Direct Investment (FDI)
- Generally no approval or screening of foreign investments (unlike e.g. CIFIUS)
- Few exceptions of sector-specific regulations
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Real estate
- Restricted acquisition of residential real estate
Banking
- License restrictions and notification duties
Radio Communication Radio and TV Broadcasting
Aviation
- License and ownership restrictions
Nuclear power
SLIDE 7
Foreign Direct Investment (FDI)
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FDI Green Field M&A Acquisition Joint Venture Redomiciliation
SLIDE 8 Green Field Investment
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35% 30% 25% 10%
Registered entities (as of 1.1.2018)
Corporation (AG) LLC (GmbH) Sole proprietorship Other legal forms (limited partnership, foundation, association, etc.)
Source: FOSC, 2018 Source: startups.ch, 2017
Total (1.1.2018): 626'364
SLIDE 9 Establishment of a Corporation or LLC
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- Minimum capital: CHF 100,000 (corporation), CHF 20,000 (LLC)
- Few corporate documents required
- No personal attendance required for set-up
- At least one local director or authorized signatory
- Legal existence upon registration in commercial register
- Quick and easy process (approx. 1-2 weeks)
- Sophisticated and reliable third-party services providers
SLIDE 10
Corporation vs. LLC
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LLC (GmbH) Corporation (AG)
+ Limited liability + More tailor-made governance (veto and consent rights) + Additional obligations of shareholders (non-compete, ancillary duties, transfer restrictions, exclusion) + Limited liability + Conditional and authorized capital + Shareholders not publicly known + Fit for capital markets + Widely used, well established case law Shareholders publicly known No conditional or authorized capital Unfit for capital markets Less case law − More rigid corporate governance Start-ups, JVs, US subsidiaries ("tick the box") Preferred corporate form, required form for stock exchange listing
SLIDE 11 Swiss Law as an attractive choice of law
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- No binding precedent rule (stare decisis)
- Guiding principle: Party autonomy
- Large pool of experienced practitioners
- Easily accessible legal authority and statutes
- Based on globally accepted and familiar principles
Civil Law
Statute- based Neutral Case law
See Annex 1 for additional information
SLIDE 12 Swiss Law as an attractive choice of law
- A preferred choice in international business
- A neutral blend of legal cultures and traditions
- A legal system based on familiar principles
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SLIDE 13 Switzerland is a preferred seat of arbitration
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- Internationally recognized center for arbitration
- Attractive locations and facilities for hearings
- Many international and dispute resolution organizations
SLIDE 14 Switzerland is a preferred seat of arbitration
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- Business-friendly environment and legal system
- Limited possibilities for appeal and easy enforcement of awards
- Neutral and politically stable country in the heart of Europe
- Well-established infrastructure and easily accessible locations
- Large pool of experienced practitioners
See Annex 2 for additional information
SLIDE 15
Switzerland's attractiveness lies not only in its chocolate…
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SLIDE 16 … but also in its reliability as a business hub and arbitration location
- In the heart of Europe, but still independent and pragmatic
- Well established legal framework
- Efficient and reliable courts, accessible and hands-on regulators
- Practically no restrictions for FDI
- Quick and easy set-up of a legal presence
- Attractive tax system
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SLIDE 17
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Contact
Tino Gaberthüel Partner Tel: +41 58 450 81 80 tino.gaberthuel@lenzstaehelin.com Lenz & Staehelin Brandschenkestrasse 24, 8027 Zurich, Switzerland Harold Frey Partner Tel: +41 58 450 80 60 harold.frey@lenzstaehelin.com Lenz & Staehelin Brandschenkestrasse 24, 8027 Zurich, Switzerland
SLIDE 18 Annex 1: Application of Substantive Swiss Law Overview
As South Korea, Switzerland has a civil law system. Its contract law is mainly based
- n the tradition of Roman law – similar to German law, but in several aspects less
complicated.
It is widely conceived as a “neutral” legal system.
It is a statute-based system, i.e. the main sources of law are codified in federal statutes, most notably the Civil Code and the Code of Obligations.
The (statutory) law is interpreted by the Swiss Federal Supreme Court and by cantonal courts.
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SLIDE 19 Annex 1: Application of Substantive Swiss Law
- 1. No binding precedent rule
- Under Swiss law, there is no principle equivalent to the doctrine of binding precedent
(stare decisis)
- Case law is nonetheless considered an important source of law in Switzerland
whenever a given issue of law is not covered by statutory law provisions
- Furthermore, precedents provide guidance as to the correct interpretation of the law
- Principles regarding the interpretation and construction of Swiss law apply also to
international arbitration proceedings which are governed by (substantive) Swiss law
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SLIDE 20 Annex 1: Application of Substantive Swiss Law
- 2. Guiding principle: Party autonomy
- Swiss law affords the parties far-reaching autonomy in the drafting of contracts
- Deviations from non-mandatory rules are possible and common, e.g.:
Concerning the parties’ respective rights and obligations; Regarding breach of contract/liability: As under Korean law, derogations from the statutory regime such as limiting liability for simple negligence are possible; Regarding cancellation rights and contract termination: Tailor made termination regimes are permissible
- Only few exceptions, for example certain grounds for setting aside of damages caps
and mandatory termination right in agency contracts (As under Korean law, contractual limitations and exclusions of liability are invalid/unenforceable in case of intentional or grossly negligent conduct)
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SLIDE 21 Annex 1: Application of Substantive Swiss Law
- 2. Guiding principle: Party autonomy
- For a contract to be valid, Swiss law requires only agreement on certain key points
(so-called essentialia negotii) A lack of consensus on non-essential points does not render the contract invalid, but requires interpretation and amendment
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SLIDE 22 Annex 1: Application of Substantive Swiss Law
- 3. Large pool of experienced practitioners
- As a neutral and liberal law frequently selected by parties, Swiss law has the
advantage that many practitioners are well-qualified to handle arbitration cases governed by Swiss law This provides the parties with a broad pool of international practitioners when selecting counsel and appointing arbitrators
- Swiss law provides for no restrictions to foreign counsel and practitioners to assist or
represent parties in international arbitration in Switzerland
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SLIDE 23 Annex 1: Application of Substantive Swiss Law
- 4. Easily accessible legal authority and statutes
- The relevant Swiss codes are available online, many of them in an official English
translation (https://www.admin.ch/gov/en/start/federal-law/classified- compilation.html)
- The decisions of the Swiss Federal Supreme Court are available online (www.bger.ch),
with many decisions of importance for international arbitration having been translated into English by commentators
- Doctrine and legal textbooks, several of them available in English, play an important
role and are easily accessible
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SLIDE 24 Annex 1: Application of Substantive Swiss Law
- 5. Based on globally accepted and familiar principles
- As Korean civil law, Swiss law follows the basic principles of the Roman-Civil-Law-
Tradition
- Accordingly, widely accepted and familiar principles are applicable to all agreements
governed by Swiss law, such as The principle of good faith (bona fide), Pacta sunt servanda, and Party autonomy
- Swiss law is based on easily accessible principles, allowing for smooth cooperation
across legal cultures and language barriers
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Annex 1: Application of Substantive Swiss Law
- 5. Based on globally accepted and familiar principles
SLIDE 25 Annex 2: Switzerland is a preferred seat of arbitration
- 1. Internationally recognized center for arbitration
- For more than a century, Switzerland has been a popular venue for arbitrations – it is
still internationally recognized as a leading centre of arbitration
- The Swiss arbitration law is a liberal and well tested legislation. It provides the
necessary procedural framework while maintaining party autonomy and flexibility
- One of Switzerland's differentiating factor: Setting aside proceedings
- Switzerland is truly international and multi-lingual
- Switzerland rests on the foundations of neutrality and political stability
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SLIDE 26 Annex 2: Switzerland as a seat of arbitration
- 2. Attractive locations and facilities for hearings
- Easy-to-reach cities offering
Ideal locations and infrastructure for case management conferences, hearings and deliberation, An international flair and Attractive leisure activities
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SLIDE 27 Annex 2: Switzerland as a seat of arbitration
- 3. Many international and dispute resolution organizations
- World Trade Organization (WTO)
- World Intellectual Property Organization (WIPO)
- United Nations
- Bank for International Settlements (BIS)
- Court of Arbitration for Sport (CAS)
- International Olympic Committee (IOC)
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Annex 2: Switzerland as a seat of arbitration
- 3. Many international and dispute resolution organizations
