The Swiss parliament is considering two bills that will update Swiss corporation law: one revises the Swiss Code of Obligations (the CO) regarding audits and one introduces the Swiss Federal Act on Admission and Supervision of Auditors. These two bills reflect recent international developments in the field of corporate governance.
Regarding the CO, the requirements of nationality and domicile of members of the board of directors in stockholding companies were also reviewed. The existing rules provide that the majority of the members of the board of directors must have Swiss citizenship and be domiciled in Switzerland.
Subsequent to the enforcement of Bilateral Agreements with the EU, the requirement of nationality was adapted because it was regarded as discrimination. The adaptation was made by way of an interim Circular of the Swiss Federal Commercial Registry in July 2003. It provides that citizens of the EU must be treated as Swiss citizens when assessing the requirement of nationality of the members of the board of directors, provided that they are domiciled in Switzerland.
The current revision goes even further: both chambers of the Swiss parliament (National Council and Council of State) decided to drop the requirement of nationality for members of the board of directors of stockholding companies completely. However, to sufficiently consider the interests of the Swiss tax authorities and potential creditors, the draft bill requires that at least one member of the board or one director authorized to represent the company is domiciled in Switzerland. All other requirements are waived, which facilitates the management of foreign controlled stockholding companies in Switzerland greatly. It will no longer be necessary to nominate (and pay) Swiss trustees in the board of stockholding companies to meet the present requirement of nationality. This new rule will enter into force together with the revised provisions regarding the audit and the Act on Supervision of Auditors, which will be on January 1 2007 at the earliest.