A demerger (scission) in Switzerland is the legal operation by which a company transfers part of its assets and liabilities to one or more existing or newly created entities, in exchange for shares allocated to the shareholders of the demerging company. Governed by the Swiss Merger Act (LFus), it can take the form of a split (the company ceases to exist) or a spin-off (the company continues with the remaining assets). Demergers are used to separate business activities, facilitate succession planning or unlock value by enabling independent valuations of distinct business units. Their tax treatment — particularly the conditions for tax neutrality — is governed by LHID and federal tax law.

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Example: a Swiss industrial conglomerate demerges its real estate division (valued at CHF 35.0 million) from its industrial operations (valued at CHF 80.0 million), creating two independent SA entities. The demerger qualifies for tax neutrality as both successor entities continue the activities previously conducted by the demerging company — avoiding immediate taxation of the CHF 35.0 million real estate division.

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Hectelion advises on demerger structuring, valuation of separated entities and tax neutrality conditions under Swiss law.