Switzerland to Introduce Investment Control Act: What You Need to Know

Zurich and Lausanne have long been considered choice international investor havens-stable, efficient, and famous in the business world. However, there is going to be a drastic shift. The Swiss Government is going to bring in a law which will allow the authorities to check and possibly bar certain foreign undertakings under the Investment Control Act (ICA), thus ushering in a change that is not simply a tweak but a watershed moment in the making. This new layer of regulation marks an end to policy making for companies that were beyond Switzerland for purposes of expansion or acquisition. In this article, therefore, we will show you all about the ICA: what it is, why it exists now, what areas it will cover and how this will change the investment landscape in Switzerland.

The Shift: Why Switzerland Is Rethinking Its Investment Openness

So Switzerland has no formal investment vetting system. Such a hands-off policy has always worked in its favor in attracting capital from different parts of the world. However, increasing concerns related to national security, risks from geopolitical issues, and strategic autonomy have changed the trend in recent years.

Here is what caused Switzerland to move in that direction:

• In 2016, ChemChina, a Chinese company, acquired Syngenta, the Swiss agricultural giant. Alarm bells began ringing regarding foreign infiltration in vital industries.
• Most European countries, Germany, and France, have outlandishly developed more stringent frameworks for investment screening; hence, it puts more pressure on Switzerland to follow suit.
• With that, an escalation in global competition over sensitive assets like energy grids, data infrastructure, and AI has been experienced.
• In this light, the Swiss legislators instructed the Federal Council to draft legislative proposals. That is how the ICA came into being.

What Exactly Is the Investment Control Act?

The ICA is a proposed federal law that would create a mechanism for screening foreign investments in Swiss firms — particularly those operating in sensitive or essential sectors. The aim is to prevent unwanted takeovers that could threaten Switzerland’s public order, national defense, or technological sovereignty.

The first draft of the law was published in 2024 and is now going through the consultation phase. If all goes according to plan, it could be implemented by 2025 or 2026.

Key Components of the Draft Legislation

Sporadic and Sector-specific

• Not a broad restriction on foreign capital: it is applicable only to sectors or related acquisition where it is deemed strategically vital for the country. These include:
• Defense-related technologies
• Core infrastructure (energy system, communications, transport, health)
• Data processing and digital infrastructure
• Media companies important for public discourse

State-linked Investors Focus

An extra level of scrutiny will be placed on investments coming from states supported investors. Thus, even if the business is construed as needing special protection, if its acquisition is an at least 25% state-owned or influenced by foreign state, automatically, it would go under review.

This would, of course, be directed at flows of investment from state-backed entities, especially those with base in China, Russia, or even from the Gulf.

Mandatory Pre-Approval

In other words, prospective buyers would need to notify authorities before closing the deals on the covered sectors. Formal approval must be granted for the transaction to proceed.

These thresholds include:

• at least 25 percent of voting shares;
• additional control gains for already controlled companies;
• key assets purchase in strategic areas.
• Expected to take not more than 3 months maximum, but may be longer.

Enforcement and Penalties

Failure to comply could carry consequences:

• Monetary fines
• Cancellation or reversal of deals
• In serious cases, potential criminal charges

How Switzerland Fits into the Global Picture

While Switzerland has taken its time, this move puts it in line with most other developed countries. Around the world, governments are implementing similar frameworks — aiming to protect national interests in the face of strategic competition, technological rivalry, and rising geopolitical uncertainty.

The Swiss model is relatively focused compared to more expansive regimes like those in the United States or the United Kingdom. But the core logic is the same: foreign investment isn’t just an economic transaction anymore — it’s a potential strategic risk.

Pushback and Questions

While the general political consensus supports the ICA, not everyone is on board.

Business Community’s Concerns

Swiss industry groups have voiced concerns about overregulation. They argue the new system:

• Creates unnecessary legal and administrative burdens
• May slow down deals and discourage foreign interest
• Could damage Switzerland’s long-standing reputation for openness

The business lobby economiesuisse has urged lawmakers to make the rules more focused and predictable.

Legal Grey Zones

Legal scholars have pointed out that terms like “national interest” or “public order” are vague and potentially open to interpretation. That could create legal uncertainty and make it harder for businesses to plan transactions.

Political Risk and Bias

Critics also worry the law could be politicized — that is, used to block certain deals not for national security reasons but because of economic nationalism or pressure from lobbying groups.

Arguments in Favor

Despite criticisms, many see the ICA as overdue.

A Safer, More Resilient Economy

The Swiss government argues that without a screening mechanism, the country is exposed. Cybersecurity, energy reliability, and democratic independence all rely on who owns key infrastructure.

Officials emphasize that this law is about setting boundaries — not closing off entirely.

Aligning with International Norms

By establishing the ICA, Switzerland joins the ranks of countries adapting to today’s reality: investment is no longer just an economic issue — it’s strategic. The ICA helps the country stay aligned with European partners and maintain credibility in a changing world.

What Investors Should Expect

For foreign investors eyeing opportunities in Switzerland, this is the right time to start getting things into place.

Get Ready for Compliance

In addition, the due diligence will become even more complex regarding the target company and whether it belongs to a protected sector and whether notification is required.

Get Ready for Increased Scrutiny

Ownership structures – especially those which have external links to other foreign states – will be put under microscope. Transparency shall be of supreme importance.

Factor Possible Delays or Rejects

Most investments are likely to be cleared; however, there is the real risk of denial- or conditional approval-for investments in sensitive sectors.

Timeline and Implementation Outlook

As of early 2025:

• The draft is still open for public consultation
• Parliament will debate and vote later in the year
• If approved, the law could take effect as early as 2026

In the meantime, companies should:

• Identify operations or assets potentially covered by the ICA
• Review foreign ownership stakes
• Begin integrating compliance checks into deal planning

The Big Picture: Not a Wall, But a Gate

Such legislation has nothing to do with separation; it is only control-the control over making ownership of Switzerland’s most important systems and firms with the long-term security and democratic interests of the country.

Switzerland signals that it still welcomes foreign investment but wants to have a say in who gets to own what. And that is not an unusual position to take in the increasingly multipolar and politically volatile world.

The Investment Control Act is neither against global capitalism nor against it. The interests are only recalibrated.