Foreign investors considering the purchase of a Swiss
company very often come across a specific particularity of Swiss
tax law that in many cases complicates matters significantly. An
important issue that foreign investors may be unaware of is the
fact that the owner of the target company, if he is an individual,
wants to make sure he realizes a tax-free capital gain upon the
sale of his company. Whether he achieves this goal or whether the
capital gain realized is re-qualified as taxable dividend income in
application of the so-called indirect partial liquidation theory
depends heavily on the post-acquisition actions taken by the
purchaser of the company.
As a result, an individual seller will very likely impose
far-reaching restrictions on what the purchaser may or may not do
with the target company subsequent to the transaction.
Alternatively, the seller may request language in the sales and
purchase agreement that will compensate him in case he will be
required
