1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?
  2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?
  3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?
  4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?
  5. Which prerequisites are necessary to qualify for a programme?
  6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?
  7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?
  8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?
  9. How are insolvency application deadlines handled in times of Corona?
  10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?
  11. Are there any particular Corona-related rules on cross-border insolvencies and restructurings in place in your country?
  12. Which restructuring/insolvency measures instead of a wind down are available for Corona-related restructurings of entities with an international design or background in your country?

jurisdiction

Switzerland

1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?

So far the Swiss Federal Council (Bundesrat) resolved to provide immediate financial support in the amount of CHF 42 bn. On 3 April 2020 it was announced to increase such amount by another CHF 20 bn. Besides a very substantial amount for short-time work compensation, CHF 40 bn were allocated to provide guarantees for bank loans. Companies with liquidity shortage may apply for a bridge loan with a Swiss bank in the amount 

  1. up to CHF 0.5 m being 100% secured by a state guarantee;
  2. between CHF 0.5 m and CHF 20 m being 85% secured by a state guarantee.

The loan guarantee is provided via one of the four acknowledged loan guarantee cooperatives. As from 26 March 2020  applications need to be submitted to a participating Swiss bank until 31 July 2020. Loans up to CHF 0.5 m should be granted by the bank on very short notice, while loans up to CHF 20 m are subject to an industry standard credit assessment.

The guaranteed loan amount does not exceed 10% of sales in 2019.

Guaranteed loans up to CHF 0.5 m are interest-free, while guaranteed loans between CHF 0.5 m and CHF 20 m bear interest of 0.5% p.a.

This measure focuses on SMEs with a turnover not exceeding CHF 500 m in 2019.

Furthermore, on 27 March 2020 the Swiss Federal Council decided to extend the deadlines for rent payments and related additional costs which become due between 13 March 2020 and 31 May 2020. Normally, when a tenant is in default with rent payments, the landlord has to set a deadline of 30 days by which the tenant has to pay; in addition, the landlord may threaten to extraordinarily terminate the lease agreement if no payment is made within this deadline. This deadline was now extended to 90 days. Prerequisite is that the payment arrears are caused by the Federal Council's measures on combating the coronavirus.

2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?

Guaranteed loans (cf. above) are repayable within five years. If timely amortization means considerable hardship for the borrower, the term may, with the consent of the loan guarantee cooperative, be extended by the bank once for another two years.

3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?

See above. 

4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?

No.

Comments

Switzerland is not a member of the EU and a notification of EU bodies seems thus not required. Switzerland does not have a notification system like the EU.

5. Which prerequisites are necessary to qualify for a programme?

With respect to guaranteed loans up to CHF 0.5 m the applicant needs to be 

  1.  a sole proprietorship, partnership or legal entity with registered office in Switzerland 
  2. which declares that
    1. it has been incorporated before 1 March 2020;
    2. at the time the application is submitted, it is not in a state of bankruptcy or moratorium proceedings (Nachlassverfahren) or in liquidation;
    3. due the COVID-19 pandemic it is economically seriously affected, in particular with regard to its turnover; and
    4. at the time the application is submitted, it has not already received liquidity support under the emergency regulations in the field of sports or culture.

With respect to guaranteed loans up to CHF 20 m the applicant needs to make the declarations set forth above and, in addition, have a company identification number (i.e. commercial register number respectively VAT number, "UID").

Anyone who deliberately makes false statements in order to obtain a guaranteed loan shall be punished with a fine of up to CHF 100,000.

6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?

Yes.

Please specify.

A loan guarantee is not available if

  • at the time the application is submitted, the applicant is in a state of bankruptcy or moratorium proceedings (Nachlassverfahren) or in liquidation;
  • the turnover of the applicant in 2019 exceeded the amount of CHF 500 m; or
  • the loan to be guaranteed would serve to make new investments by the borrower in fixed assets that would not constitute replacement investments.

7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?

Other.

Comments

Swiss subsidiaries of a foreign company are eligible to apply while branches are not eligible.

8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?

Yes.

Please specify.

Guaranteed loans are granted solely for the purposes of securing current liquidity needs. Therefore, for the duration of a loan guarantee the following is not admissible:

  • distribution of dividends, profit shares to board members and repayment of capital contributions;
  • granting of loans or the refinancing of loans granted as private and shareholder loans, with the exception of refinancing of overdrafts accumulated since 23 March 2020 at the bank which grants the loan guaranteed under this emergency program;
  • repayment of group loans; and
  • the transfer of funds received as a guaranteed loan under this emergency program to a directly or indirectly affiliated group company of the applicant, which does not have its registered office in Switzerland.

Anyone who deliberately uses the guaranteed loan amount in contrary to the above restrictions shall be punished with a fine of up to CHF 100,000.

9. How are insolvency application deadlines handled in times of Corona?

Due to the epidemic the Swiss Federal Council (Bundesrat) resolved to have a standstill of all time limits in debt enforcement procedures as well as, in general, all civil and administrative proceedings lasting through 19 April 2020 (article 62 Federal Act on Debt Enforcement and Bankruptcy, Ordinance on Standstill of Time Limits in Civil and Administrative Procedures for the Maintenance of Justice in connection with the Coronavirus (COVID-19)). The standstill does not apply in the case of attachment proceedings or if it concerns measures for the preservation of assets that cannot be postponed (article 56 Federal Act on Debt Enforcement and Bankruptcy).

10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?

See section  9 above. In addition, pursuant to article 24 of the Ordinance on Granting of Loans and joint and several Guarantees due the Coronavirus, guaranteed loans up to CHF 0.5 m are not considered a liability for the calculation of 

  1. a capital loss pursuant to art. 725 para. 1 Swiss Code of Obligations or 
  2. an over-indebtedness pursuant to art. 725 para. 2 Swiss Code of Obligations.

No.

By an order of 18 March 2020, the Swiss Federal Council enacted emergency law due to the Corona crisis with respect to debt enforcement and bankruptcy law: Until 19 April 2020, all debt enforcement proceedings are suspended and it will no longer be possible to push ahead debt enforcement proceedings against debtors until this date. These rules apply to all debtors, not only those with an international background. 

Swiss law provides for a specific procedure giving a distressed company the time for a necessary restructuring. In principle, the aim of the so-called moratorium (Nachlassverfahren) is the debt restructuring of the company. Moratorium proceedings start with a provisional moratorium and may be followed by a final moratorium. In case the restructuring of the debtor is successful before the expiry of the provisional or final moratorium, the court revokes the moratorium. On the other hand, the court must declare bankruptcy before the expiry of the provisional or final moratorium, if (i) this is necessary to preserve the debtor's assets, (ii) there is obviously no prospect of restructuring or confirmation of a debt restructuring agreement, or (iii) the debtor contravenes on the restrictions of his power of disposal or the instructions of the commissioner. Until today, Switzerland has not amended its law regarding the granting of a moratorium for companies due to the Corona crisis. 

Restructuring proceedings, which are initiated abroad, can be recognized in Switzerland, if specific requirements are fulfilled. However, such recognition usually leads to a parallel restructuring proceeding in Switzerland with respect to the assets located here.