A Swiss branch (succursale / Zweigniederlassung) is a legally dependent establishment of a foreign company — it has no separate legal personality but is registered separately in the Swiss commercial register. The branch is bound by the legal acts and obligations of its parent company, and vice versa. It allows a foreign company (including French companies) to operate in Switzerland without incorporating a separate Swiss entity, providing commercial flexibility but exposing the parent to Swiss legal jurisdiction.

For tax purposes, a Swiss branch of a foreign company is taxed in Switzerland on the profits attributable to the branch's Swiss activities (limited tax liability / assujettissement limité), at the same cantonal and federal rates applicable to Swiss companies. The branch is not subject to Swiss withholding tax on payments to its head office (as these are not dividends from a separate entity). The allocation of profits between the branch and the head office is governed by the arm's length principle and the applicable tax treaty (e.g., the Franco-Swiss treaty for French parent companies).

In an M&A context, a branch can be acquired as part of an asset deal or transferred to a newly incorporated Swiss subsidiary. The conversion of a branch into a subsidiary (apport de la succursale) may trigger Swiss stamp duty on the incorporation capital and requires careful planning. From a due diligence perspective, branch structures often have less complete standalone financial reporting than subsidiaries, creating documentation challenges that must be addressed early in the process.

At Hectelion, we analyze branch structures and advise on branch-to-subsidiary conversion in our due diligences and structuring mandates.