Effective Debt Management: The Key to Corporate Restructuring

In 2023, Switzerland saw a record high in bankruptcy proceedings, with the Federal Statistical Office (FSO) reporting 15,447 cases—a 2.9% increase from the previous year. This marks the third consecutive year of growth in bankruptcy cases. However, despite this surge, financial losses decreased by 11.7%, amounting to around two billion Swiss francs. These trends highlight the critical need for efficient debt management.

For companies facing financial distress, restructuring is often essential. Central to this process is robust debt management, which involves structured measures to restore financial stability and manage long-term obligations.

The first step in this process is a detailed analysis of all debts. It is crucial to understand the type, amount, and repayment terms of each liability. With a clear overview, management can improve their approach in line with projected cash flows.

Open discussions with creditors are vital for renegotiating payment plans, reducing interest rates, or even partially canceling debts. Transparent communication and a constructive approach are essential for finding mutually acceptable solutions. The involvement of experienced negotiation partners can be particularly helpful.

Debt restructuring can take various forms, including new financing instruments, modified terms, or interest rates. Combining liabilities and transferring them to new creditors are also practical options. Careful planning and expert advice ensure that new obligations are still sustainable over the long term.

Sound financial planning is indispensable for long-term stability. A comprehensive financial plan should encompass debt reduction strategies, cash flow projections, and investment plans. This enables companies to achieve their financial goals while keeping a healthy balance between debt and equity.

Our Expertise

Leverage our ability in analyzing and restructuring corporate debt. We offer customized solutions to secure your financial stability and ensure long-term success. Contact us to steer your company towards a stable future.

Conclusion

Managing debt during a restructuring is challenging but offers an opportunity to stabilize the company. Through thorough analysis, targeted negotiations, debt restructuring, cost reduction, and efficiency improvement, supported by comprehensive financial planning, companies can build a sustainable financing structure.

Fraud attempts on the Internet: A growing threat and how to protect yourself

The internet offers numerous benefits, including fast communication, simplified work processes, convenient shopping and access to a wealth of information. However, this digital world also harbours risks, particularly in the form of fraud attempts, which are becoming increasingly sophisticated and frequent. Fraudsters exploit the anonymity and vastness of the internet to deceive unsuspecting victims and steal financial or personal data.

The most common scams are

• Phishing: The classic Internet scam
• Online shopping scams: Fake shops and bargain traps
• Ransomware: digital blackmail
• Romance scams: Love on the internet as a trap
• Investment fraud and Ponzi schemes

In addition, there is now a new, perfidious variant: 

Fraud through fake emails with correct invoices

Fraudsters are now able to intercept and modify emails with correct invoices. You receive a deceptively genuine email with an invoice that you may have already received from your supplier. The email then points out that you should settle the outstanding amount by using new bank details, which you received a few days ago and is usually sent again in an attachment, to a different IBAN. The new bank details are included in the email, including the contact details which you should contact if you have any questions or uncertainties. 

If you call the telephone number, they will explain the reason for the change of IBAN and even apologise for the inconvenience, all in the local language.

THIS IS A REALLY WELL MADE SCAM

Unfortunately, some of our customers have already come into contact with this scam.  We therefore suggest that you adapt your accounts payable process. From now on, the supplier must always be contacted by telephone for new customer relationships and when changing bank relationships:

• Call the supplier directly, either via a number and contact person known to them or via the official telephone number on the website;
• Never use the telephone number given in the email;
• Ask the supplier to email you a bank document with the bank details;
• Abroad, your bank may already be able to verify your banking relationship. Unfortunately, we are not yet at that stage in Switzerland.

Conclusion

Unfortunately, due to the extremely professional fraud attempts, we have to fall back on almost analogue check methods/processes. Here too, please do not forget that telephone numbers and entire websites are being faked today and exercise even more caution. Under no circumstances should you ever accept urgent payments and unusual payment requests/confirmations.

We will be happy to answer any questions you may have.

Consequences of a late or forgotten election of the Board of Directors

According to Art. 710 of the Swiss Code of Obligations, the Board of Directors of listed companies must be elected annually and individually.

For non-listed companies, the term of office of a Board of Directors is generally three years. The articles of association can extend the term of office to a maximum of 6 years or specify a shorter period.

In December 2021, the Federal Supreme Court found an organizational deficiency at a company where the election of the Board of Directors was not carried out on time and appointed a trustee to restore the legal situation. As a consequence, all subsequent resolutions of a general meeting must be deemed null and void, as the meeting should not have been held due to the organizational deficiency. If, for example, profit distributions had been resolved, these would have had to be cancelled.

For this reason, we recommend the following:

- Take a look at the Articles of Association to ensure that the election is held at the correct frequency.

- If the annual financial statements are not yet available after 6 months, the Board of Directors can be elected in advance at an Extraordinary General Meeting.

- Hold a universal general meeting (but all shareholders must be in favor of this) to rectify the shortcoming retrospectively.

Conclusion

In the case of a heterogeneous, possibly even disputed shareholder base, it is certainly advisable to strictly observe the formal requirements in order not to risk the appointment of a custodian. If necessary, an extraordinary general meeting should be held to elect the members of the board of directors in good time. In simpler circumstances, a universal general meeting with a unanimous resolution can subsequently remedy the defect.

Buy-in into pillar 3a from 01.01.2025

The Federal Council is implementing motion 19.3702 ‘Enabling purchases into pillar 3a’ by Councillor of States Erich Ettlin. The aim of the motion was to create the opportunity to make up for missed payments and thus strengthen private pension provision.

Pillar 3a is a tied pension plan that can only be withdrawn upon retirement. Payments into Pillar 3a can be deducted from taxable income and the assets already accumulated are not subject to income or wealth tax. Currently, the lump-sum benefit is taxed once at a reduced tax rate upon withdrawal. However, the future tax treatment of capital withdrawals from purchases is expected to be presented by the Federal Council at the end of January 2025 with the consultation draft «Review of tasks and subsidies».

The following applies from 1 January 2025:

• A buy-in of the last 10 years is possible if you are/were entitled to make a payment in the corresponding years (year of buy-in and year for which a subsequent payment is made) (income subject to AHV contributions in Switzerland).
• The maximum buy-in is the difference between the maximum amount at that time and the amount actually paid in.
• The ordinary annual contribution must be paid in full in the year in question (CHF 7,258.00 in 2025).
• The buy-in is limited to the small contribution (as at 2025 CHF 7,258.00). This means that employees with a second pillar can pay in a maximum of twice the small contribution per year, while employed persons without a second pillar can pay in a maximum of the small contribution after they have paid in the large contribution (as at 2025 20% of earned income max. CHF 36,288.00).
• A buy in is only possible retroactively for years beginning 2025 and letter, i.e., for the first time in 2026 for 2025.

The buy-in and the current annual contribution are fully deductible from taxable income.

Specific calculation examples for the canton of Zurich

The examples are calculated for a single person with Roman Catholic church tax. A buy-in of CHF 7,258.00 has the following effect on the tax amount:

However, the retrospective buy-in can also be used for tax planning e.g., if there are high deductions in a year due to property maintenance costs or education costs, which already reduce the marginal tax rate.

Conclusion

A buy-in into pillar 3a makes sense to compensate for life situations in which the financial possibilities are lacking (e.g. studies, start of self-employment, family time, etc.). However, the purchase can also be used to save tax if there are already high deductions in a year due to property maintenance costs or further education costs, for example, which can reduce the marginal tax rate in the progression.

Subordination Agreements – Creation, Impact, and Termination

In the startup environment, financing models such as convertible loans or shareholder loans are common. While essential for growth, such financing can significantly burden the balance sheet and lead to formal over-indebtedness. A properly structured subordination agreement under Art. 725b para. 4 item 1 of the Swiss Code of Obligations (CO) provides important legal leeway in such situations.

What is a subordination agreement – and when is it appropriate?

A subordination agreement is a contractual arrangement in which a creditor agrees to subordinate their claim behind all other creditors and only demand repayment if doing so does not result in over-indebtedness. It is considered a contract in favor of third parties (Art. 112 CO) and serves two main purposes:

• Protection of other creditors
• Preservation of the company’s ability to restructure and continue operations

Special case: Convertible loans

Convertible loans are treated as liabilities until conversion. Despite their equity-like characteristics, they burden the balance sheet and may lead to over-indebtedness in early-stage companies. A carefully structured subordination of convertible loans offers several benefits:

• Temporary legal neutralization of repayment obligations
• Preservation of going concern status
• Flexibility to convert into equity at a later stage

Termination of a subordination agreement – only under strict conditions

A subordination agreement must be concluded for an indefinite period. Termination is not automatic and is only permissible when all of the following conditions are met:

1. Audited balance sheet: The balance sheet must be audited by the statutory auditor in accordance with applicable Swiss auditing standards.
2. Full coverage of liabilities: The audited balance sheet must clearly demonstrate that all liabilities – including subordinated claims – are fully covered by the company's assets.
3. Type of audit matters:
• For ordinary audits, a summary audit report without a reference to Art. 725 CO is sufficient.
• For limited audits, a separate audit report with positive assurance is required, since the standard report provides only negative assurance in accordance with Art. 729b CO.

The subordination agreement must be drafted with these audit requirements in mind. It may only be lifted contractually once all listed conditions are demonstrably met.

Practical notes

• No partial repayments: While the subordination is in effect, no repayment or offsetting of the subordinated claim is permitted.
• Foreign currency claims: If the claim is denominated in a foreign currency, the subordination should be established in the same currency.

Debt waiver vs. subordination: A debt waiver permanently extinguishes the claim and results in a true balance sheet restructuring. In contrast, a subordination merely suspends enforceability – the claim continues to exist.

Conclusion for founders and investors

A properly structured subordination agreement creates legal certainty for all stakeholders – particularly during the critical phase between seed financing and market breakthrough. For investors using convertible loans, subordination is a strategic tool to support the startup without immediately demanding repayment – under clearly defined legal conditions.

We are here to support you with the legally sound drafting, audit review, reduction and termination of subordination agreements.

VAT changes as of 01.01.2025

Overview of changes

No, for once, apart from monthly hygiene products, no VAT rate will change. Two major changes that will come into force from 2025 are very sector-specific. The taxation of e-commerce platforms will be adjusted and services provided by travel agencies and tour operators will now be included in the catalog of exempt services under Art. 21 of the VAT Act, which may result in an input tax correction.

Please note: the changes to e-commerce platforms may also affect customers, at least indirectly. The platforms must now register with VAT authorities. Effective administrative measures will be introduced to ensure that platforms register. If a platform does not register, in rare cases the ordered products will be destroyed without compensation. So if you are not sure whether the platform is complying with the new rules when ordering products, it is worth taking a look at the blacklist published by the FTA.

Other changes concern definitions of location, including the place where a teaching unit is deemed to have been provided for VAT purposes if it is also available online.

In the catalogue of exempt services in accordance with Art. 21 para. 2 of the VAT Act, in addition to travel agency services, some adjustments have also been made in the area of medical treatments and cultural events in order to broaden their scope of application.

However, the most relevant changes for SMEs are probably the now mandatory electronic filing of VAT reports and the option of annual invoicing for companies that do not exceed the size criteria for net tax rates.

However, we only recommend the option of an annual statement to a very limited extent in very simple cases. On the one hand, no liquidity can be saved in this way, as the instalments for the expected tax burden are still made quarterly, and on the other hand, there is no change to the accounting requirements or the necessary supporting documents. If the accounting is only done once a year, there is an increased risk that the receipts are no longer available and therefore the basis for a well-founded accounting is missing.

Conclusion

If you have reason to believe that the changes as of 1 January 2025 could be relevant for you and would like to find out more, actively approach your trustee or tax advisor.

Tax savings due to excess equity and research and development activities

Additional deduction of research and development expenses in accordance with Art. 25a StHG

In order to promote scientific research and knowledge-based innovation at Swiss companies, the additional deduction of research and development expenses ("R&D") was introduced as part of the introduction of the TRAF. When it comes to research and development expenses, many often have very innovative spin-offs from ETH, EPFL and the like in mind and do not think that their own company could qualify for such a deduction. As the additional R&D deduction can only be deducted from any profit in the current financial year and is also limited by the relief limit of 70% of the annual profit, this deduction often comes to nothing, especially for start-ups with high development costs and corresponding losses at the beginning of the company's activities. It is often forgotten that the deduction is also intended to promote development and innovation, i.e. the development of new products, procedures, processes and services for the economy and society. For understandable reasons, however, this deduction cannot be claimed for any efforts for mere market launch or commercialization.

For example, mere expenses for the implementation of existing solutions are usually not additionally deductible. However, items such as the in-house development of software or the development of new packaging materials or molecules may fall under the additional deduction of R&D costs. As an additional 50% of qualifying expenses can be deducted over and above the actual expenditure, potentially large tax savings can be achieved by applying the R&D deduction. So, if you have the feeling that your activities could potentially qualify for this deduction, contact your trusted accountant and have any deductibility checked with the tax authorities.

Deduction for excess equity in accordance with Art. 25abis StHG

In a reverse analogy to interest on hidden equity, the deduction on excess equity was introduced as part of the introduction of STAF. Although the percentage rates at which the various assets must be backed by equity in order to arrive at excess equity within the meaning of Art. 725abis StHG are not 1:1 the same as in the FTA circular no. 6 on hidden equity, however, the principle is comparable. If a company now has a high level of equity and therefore also a portion of equity that is deemed to be security equity, this can be notionally subject to interest at the interest rate according to the yield on 10-year federal bonds. This notional interest can then be deducted from the taxable profit. As with other STAF deductions, the maximum deductibility is limited by a relief limit (70%) of the taxable profit. The deduction for self-financing can only be made in cantons in which the profit tax burden (excluding federal tax) is at least 13.5%. This is currently only the case in the canton of Zurich.

As the yield on 10-year Confederation bonds as at 1 January of the calendar year is decisive for the calculation, and the yield as at 1 January 2023 was 1.565%, such a deduction for excess equity can be made for the first time for the 2023 financial year for companies domiciled in the canton of Zurich due to the end of negative interest rates. However, it is important to note that such a deduction can only be made on taxable company profits in the current year and cannot be carried forward to future financial years in the event of a loss.

Conclusion

Actively approach your accountant or tax advisor about any additional deductions for research & development at the next annual accounts meeting, or make sure that your accounting department is aware of your company's development activities.

Online platforms

New VAT regulations for online platforms have been in effect in Switzerland since January 1, 2025. The objective of this reform is to eliminate competitive distortions between domestic and foreign providers.

Under the new rules, the VAT obligation is no longer the sole responsibility of the seller. Platform operators are now liable if they facilitate sales to Swiss consumers. This applies to large marketplaces such as Amazon, eBay or Temu, as well as to smaller platforms, including portals for direct agricultural sales or courier services, provided they exceed the applicable turnover threshold in Switzerland.

In practice, this means the platform is now considered a service provider and is liable for VAT on the entire turnover generated through it, even if goods are shipped directly to customers in Switzerland from abroad. VAT must be paid in Switzerland regardless of whether the seller is based in Switzerland or not.

For consumers, the change is expected to bring more price transparency and fewer unexpected charges upon delivery, as VAT will already be included in the purchase price. For platform operators, however, this means increased obligations in terms of accurate VAT reporting, invoicing and monitoring of sales.

Smaller retailers who were previously able to deliver VAT-free through platforms will also be affected, as these platforms are now subject to VAT.

Companies selling to Switzerland via online platforms, or operating such platforms themselves, should carefully review the new requirements and adapt their processes where necessary. The Swiss Federal Tax Administration (FTA) provides further guidance and support in its recently published Branchen Info 27.

Conclusion

If you believe your business could be affected by these changes to the VAT regulations for online platforms, you are strongly advised to consult your tax advisor or fiduciary.

2023 erreichte die Anzahl der Konkursverfahren in der Schweiz einen neuen Höchststand. Laut dem Bundesamt für Statistik (BFS) wurden 15'447 Konkursverfahren eröffnet, ein Anstieg um 2,9 Prozent im Vergleich zum Vorjahr. Dies markiert das dritte aufeinanderfolgende Jahr mit einem Zuwachs. Trotz des Rekordwertes sank der finanzielle Schaden um 11,7% auf rund zwei Milliarden Schweizer Franken. Diese Entwicklungen verdeutlichen die Dringlichkeit eines effizienten Schuldenmanagements.

Um Unternehmen in finanzieller Notlage wieder auf Kurs zu bringen, ist eine Restrukturierung oft unumgänglich. Dabei spielt das Schuldenmanagement eine zentrale Rolle. Strukturierte Massnahmen sind notwendig, um die finanzielle Stabilität wiederherzustellen und die Verpflichtungen des Unternehmens nachhaltig zu bewältigen.

Der erste Schritt ist eine detaillierte Analyse aller Schulden. Es gilt, die Art, Höhe und Rückzahlungsbedingungen jeder Verbindlichkeit genau zu kennen. Mit einem klaren Überblick kann das Management gezielte Optimierungen in Einklang mit den prognostizierten Cashflows vornehmen.

Offene Gespräche mit den Gläubigern ermöglichen es, Zahlungspläne neu zu verhandeln, Zinsen zu reduzieren oder sogar Schulden teilweise zu erlassen. Eine transparente Kommunikation und eine konstruktive Herangehensweise sind entscheidend, um für beide Seiten akzeptable Lösungen zu finden. Die Unterstützung durch erfahrene Verhandlungspartner ist hierbei von Vorteil.

Die Neuordnung der Schulden kann in Form von neuen Finanzierungsinstrumenten, geänderten Laufzeiten oder Zinssätzen erfolgen. Auch die Konsolidierung von Verbindlichkeiten und deren Übertragung auf neue Gläubiger sind mögliche Schritte. Eine sorgfältige Planung und fundierte Beratung gewährleisten, dass die neuen Verpflichtungen langfristig tragbar bleiben.

Eine solide Finanzplanung ist essenziell für die langfristige finanzielle Stabilität. Ein umfassender Finanzplan sollte Strategien zum Schuldenabbau, Cashflow-Prognosen und Investitionspläne beinhalten. Damit können Unternehmen ihre finanziellen Ziele erreichen und ein gesundes Verhältnis zwischen Verschuldung und Eigenkapital sicherstellen.

Unsere Expertise

Nutzen Sie unsere Expertise in der Analyse und Restrukturierung von Unternehmensschulden. Wir bieten individuelle Lösungen, um Ihre finanzielle Stabilität zu sichern und langfristigen Erfolg zu gewährleisten. Kontaktieren Sie uns, um Ihr Unternehmen auf einen stabilen Kurs zu bringen.

Fazit

Das Management von Verbindlichkeiten während einer Restrukturierung ist herausfordernd, bietet aber die Chance, das Unternehmen auf ein solides Fundament zu stellen. Durch eine gründliche Analyse, gezielte Verhandlungen, die Umstrukturierung der Schulden sowie Kostenreduzierung und Effizienzsteigerung, unterstützt durch eine umfassende Finanzplanung, können Unternehmen eine tragfähige Finanzierungsstruktur aufbauen.

Das Internet bietet zahlreiche Vorteile, darunter schnelle Kommunikation, vereinfachte Arbeitsprozesse, bequeme Einkaufsmöglichkeiten und den Zugang zu einer Fülle von Informationen. Doch diese digitale Welt birgt auch Risiken, vor allem in Form von Betrugsversuchen, die immer raffinierter und häufiger werden. Betrüger nutzen die Anonymität und Weitläufigkeit des Internets aus, um ahnungslose Opfer zu täuschen und finanzielle oder persönliche Daten zu stehlen.

Die bekannten Betrugsversuche sind:

• Phishing: Der Klassiker unter den Internetbetrügereien
• Online-Shopping-Betrug: Fake-Shops und Schnäppchen-Fallen
• Ransomware: Die digitale Erpressung
• Romance Scams: Liebe im Internet als Falle
• Investitionsbetrug und Ponzi-Systeme

Zusätzlich kommt nun noch eine neue, perfide Variante dazu: 

Formularbeginn

Betrug durch gefälschte E-Mails mit korrekten Rechnungen

Die Betrüger sind heute in der Lage Emails mit korrekten Rechnungen abzufangen und zu modifizieren. So erhalten Sie eine täuschend echte Email mit einer Rechnung welche sie eventuell bereits von Ihrem Lieferanten erhalten haben. In der Email wird dann darauf hingewiesen, dass man die Rechnung, welche man von einigen Tagen erhalten hat und im Anhang in der Regel noch einmal mitgesandt wird, doch auf eine unterschiedliche IBAN überweisen sollte. Die neuen Bankdetails werden in der Email mitgeliefert inklusive den Kontaktdetails welche man bei Fragen oder Unsicherheiten doch kontaktieren solle.  

Wenn Sie auf die Telefonnummer anrufen wird Ihnen erklärt, was der Grund für die geänderte IBAN ist und man entschuldigt sich sogar für die Umstände, und dies alles in Landessprache.

DAS IST ALLES, AUF EINEM EXTREM HOHEN NIVEAU, GEFÄLSCHT

Leider haben auch bereits Kunden von uns mit dieser Betrugsmasche Kontakt gehabt.  Wir schlagen Ihnen deshalb vor, Ihren Kreditorenprozess anzupassen. Ab sofort muss bei neuen Kundenbeziehungen und bei der Änderung von Bankbeziehungen immer mit dem Lieferanten Kontakt aufgenommen werden, und zwar per Telefon:

• Rufen Sie direkt beim Lieferanten an, entweder über eine ihnen bekannte Nummer und Kontaktperson oder über die offizielle Telefonnummer auf der Website;
• Benutzen Sie nie die Telefonnummer welche in der Email angegeben wird;
• Lassen Sie sich vom Lieferanten ein Bankdokument mit den Bankdetails mailen;
• Im Ausland kann teilweise bereits Ihre Bank die Bankbeziehungen verifizieren. In der Schweiz sind wir leider noch nicht so weit.

Fazit

Leider müssen wir durch die extrem professionellen Betrugsversuche wieder auf fast analoge Checkmethoden/-prozesse zurückgreifen. Auch hier, bitte vergessen sie nicht, dass heute Telefonnummern und ganze Websites gefälscht werden und lassen sie noch mehr Vorsicht walten. Auf keinen Fall sollten sie sich je auf dringliche Zahlungen und ungewöhnliche Zahlungsaufforderungen/-bestätigungen einlassen.

Gerne stehen wir Ihnen bei Fragen zur Verfügung.