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I. Introduction
On 12 June 2026, the Swiss Federal Council launched the consultation procedure for the draft Investment Screening Ordinance (Investitionsprüfverordnung, IPV), which will remain open until 5 October 2026. The draft IPV contains the implementing provisions of the Investment Screening Act (Investitionsprüfgesetz, IPG), adopted by the Swiss Parliament on 19 December 2025 and further specifies the approval requirements and review procedure under the IPG.
The consultation has once again drawn attention to Switzerland’s forthcoming new investment screen regime consisting of the IPG and the IPV
For many years, Switzerland has been among the few developed economies without a general foreign investment screening mechanism. While foreign investments have traditionally been welcomed and subject only to limited sector-specific restrictions, growing international concerns regarding the protection of critical infrastructure, sensitive technologies and national security interests have led Switzerland to introduce its own investment screening regime.
Against this backdrop, foreign investors contemplating investments in Switzerland should familiarise themselves with the key features of the new framework. This article provides an overview of the Swiss investment screening regime, focusing in particular on its legislative background, the expected entry into force of the IPG and IPV, the categories of investors and transactions that may fall within its scope, and the practical implications for foreign investors.
II. Switzerland Retains an Open Investment Market While Introducing a Targeted Screening Regime
The final design of the Swiss IPG is the result of several years of legislative debate regarding the appropriate balance between national security concerns and Switzerland's traditionally liberal investment policy.
The preliminary draft of the IPG published in 2022 (Vorentwurf zum Investitionsprüfgesetz, VE-IPG) proposed a comparatively broad screening regime. The proposal would have subjected acquisitions by both foreign private investors and foreign state-controlled investors to review under certain circumstances. However, concerns were raised during the consultation process that such a framework could create unnecessary administrative burdens and adversely affect Switzerland's attractiveness as an investment destination.
In response to these concerns, the Swiss Federal Council significantly narrowed the scope in its 2023 draft (Entwurf zum Investitionsprüfgesetz, E-IPG). Under the revised proposal, the screening mechanism would primarily focus on acquisitions by foreign state-controlled investors, thereby limiting the number of transactions subject to review.
The legislative debate nevertheless continued. During its deliberations in 20241, the Swiss National Council proposed a broader regime that would have extended the scope of the screening mechanism to acquisitions by all foreign investors and expanded the protected interests to include Switzerland's security of supply. In 2025, however, the Council of States rejected this approach and advocated a return to the more limited model proposed by the Federal Council2.
The final version of the IPG adopted by Parliament reflects a compromise in favour of a targeted screening framework. Rather than establishing a general foreign investment review system, the IPG focuses on acquisitions by foreign state-controlled investors and seeks to safeguard Switzerland's public order and security. Accordingly, the vast majority of private foreign investments remain outside the scope of the new regime. This outcome demonstrates Switzerland's intention to address specific national security concerns while continuing to maintain an open and attractive environment for foreign investment.
III. Who Is Caught: Foreign State Investors
As noted above, the approval requirement under the IPG is principally directed at foreign state investors3. The concept of “foreign state investor” extends beyond foreign states and governmental authorities themselves and also encompasses undertakings that are directly or indirectly controlled by a foreign state body4; in addition, the regime may apply to persons or entities acting on behalf of a foreign state body, thereby reducing the risk of circumvention through intermediary or nominee structures5.
Whether an undertaking is considered controlled by a state is assessed on the basis of the existence of direct or indirect state influence rather than its formal legal status alone. Relevant considerations may include ownership interests, voting rights, appointment rights or other mechanisms enabling a foreign state to exercise decisive influence over the undertaking's strategic decisions or commercial conduct. As a result, state-owned enterprises, sovereign wealth funds and other government-controlled entities may fall within the scope of the IPG.
At the same time, the draft IPV introduces an important qualification for the exceptions to the approval requirement in its Section 4. Pursuant to Articles 7 and 8, draft IPV, certain foreign state-controlled investors may be exempt from the approval requirement where Switzerland considers that sufficient cooperation mechanisms exist with the relevant state to address risks to public order and security. Appendix 3 to the draft IPV currently lists the EU and EEA/EFTA member states as exempt jurisdictions. However, the exemption does not apply where there are grounds to assume that Switzerland's public order or security cannot be adequately safeguarded in the particular circumstances of the transaction6.
As a result, the practical scope of the regime is narrower than may initially appear and is primarily aimed at acquisitions involving foreign state-direct/indirect-controlled investors from non-exempt jurisdictions.
IV. Who Is Not Caught: Private Foreign Investors
Given the above, foreign investors that do not qualify as state investors generally fall outside the scope of the screening framework and are not subject to the approval requirement.
This does not mean, however, that acquisitions by private foreign investors are entirely unregulated. Certain sectors of the Swiss economy remain subject to specific regulatory requirements and approval procedures under sectoral legislation. Depending on the nature of the target business, investments in areas such as financial services, telecommunications, aviation or other regulated industries may therefore continue to require approvals, notifications or compliance with ownership restrictions under the applicable regulatory framework.
V. Entry into Force and Impact on Existing Investment
According to the information released by the Swiss State Secretariat for Economic Affairs (SECO), it is expected that the IPG will enter into force in 20277.
Pursuant to Article 20 IPV, the ordinance is intended to enter into force simultaneously with the IPG. The explanatory report8 further notes that the Federal Council intends to implement the new regime in a manner that minimizes the burden on businesses and allows companies sufficient time to adapt to the new regulatory framework.
Neither the IPG nor the current draft IPV contains specific transitional provisions addressing existing investments. The investment screening regime is, however, structured as a prior approval mechanism for acquisitions falling within its scope and is therefore principally concerned with future transactions. Accordingly, investments that have already been completed prior to the entry into force of the IPG and IPV would generally not be expected to become subject to a retrospective approval requirement.
Particular attention should nevertheless be paid to transactions that are signed before, but completed after, the entry into force of the new regime. In such cases, foreign state investors should assess at an early stage whether the transaction may fall within the scope of the IPG, as the applicability of the approval requirement may depend on the timing of the transaction and any future guidance issued by the competent authorities. Foreign state investors contemplating acquisitions of Swiss businesses should therefore take the forthcoming investment screening regime into account when planning future transactions.
VI. Transactions Triggering a Filing for Investment Approval
The requirement of investment approval procedure under the IPG is limited to acquisitions of Swiss undertakings operating in specifically designated sectors that are considered particularly relevant to Switzerland's public order and security. As a general rule, the undertaking must have employed, on average, at least 50 full-time employees worldwide or generated an average annual worldwide turnover of at least CHF 10 million during the two financial years preceding the filing.
The categories of covered undertakings include, first, companies whose products, technologies or intellectual property are of strategic importance to Switzerland's defense and security interests9.
Secondly, the regime extends to undertakings active in the military and export-controlled technology sectors. In particular, acquisitions of companies manufacturing goods or transferring intellectual property that are subject to licensing requirements under Swiss War Material Act or export control legislation, including dual-use goods and technologies, may require prior approval10.
Thirdly, the IPG covers certain operators of critical infrastructure. These include qualifying undertakings active in the electricity11 and water supply12 sectors, operators or controllers of domestic high-pressure natural gas pipelines13, as well as providers of security-critical information technology systems or services used by Swiss public authorities.
Accordingly, the approval requirement is not triggered merely because an undertaking operates in a regulated industry. Rather, the target undertaking must fall within one of the specific categories exhaustively listed in the IPG.
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Footnotes
1 Debatte im Nationalrat, 17.09.2024, SDA-Meldung.
2 Debatte im Ständerat, 24.09.2025, SDA-Meldung.
3 Art. 1, para. 2, IPG.
4 Art. 2-d-3, IPG.
5 Art. 2-d-4, IPG.
6 Art. 7, para. 2, IPV.
7 See https://www.seco.admin.ch/en/investment-screening, last visited on 23. June 2026.
8 See „Verordnung über die Prüfung ausländischer Investitionen-Erläuternder Bericht zur Eröffnung des Vernehmlassungsverfahrens”
9 Art. 3-1-a-1, IPG.
10 Art. 3-1-a-2, IPG.
11 Art. 3-1-c, IPG.
12 Art. 3-1-b and Art. 3-1-e, IPG.
13 Art. 3-1-d, IPG.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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