Debate over the alternative investment fund managers draft directive is heating up in Europe, with political bodies becoming more involved every week. One important point of that debate is the idea that it will create regulatory arbitrage, with funds relocating to new jurisdictions within and outside Europe. At the same time, tax and transparency issues are also being discussed on the world stage and leading to debate over the relocation of funds. Against this background, it is important to understand the structures that are available for private equity funds based and investing in Switzerland.
Private equity firms investing in Switzerland do not necessarily need to use a Swiss structure but are generally free to choose the set-up they deem most appropriate for fundraising and investment. The main drivers for the appropriate legal structure are, in a nutshell: (i) the investment vehicle must be tax transparent – income, capital gains and...