Due Diligence Checklist for Buying a Swiss Business
Due diligence is the critical investigation phase between signing a Letter of Intent (LOI) and closing a business acquisition. It is your opportunity to verify the seller's claims, identify risks, and confirm that the business is worth the agreed price. In Switzerland, due diligence has unique dimensions shaped by the federal-cantonal system, multilingual business culture, and specific regulatory requirements. This checklist covers everything you need to examine.
Financial Due Diligence
Financial due diligence validates the numbers behind the business. Request and analyze:
| Item | Details |
|---|---|
| Financial statements | 3 years of audited P&L, balance sheet, and cash flow statements |
| Tax returns | 3 years of corporate and VAT (MWST) returns |
| Revenue breakdown | By customer, product/service, and geography |
| Normalized EBITDA | Add-backs for owner compensation, one-time items, related-party transactions |
| Outstanding debt | Bank loans, shareholder loans, leasing obligations |
| Contingent liabilities | Guarantees, warranties, pending claims, environmental liabilities |
| Working capital | Accounts receivable aging, inventory valuation, accounts payable terms |
| Capital expenditures | Historical and planned CAPEX, deferred maintenance |
Legal Due Diligence
| Item | Details |
|---|---|
| Corporate documents | Articles of association, shareholder agreements, board minutes |
| Contracts | Customer contracts, supplier agreements, lease agreements, service contracts |
| Intellectual property | Trademarks, patents, trade secrets, software licenses, domain names |
| Litigation | Pending, threatened, or historical lawsuits and regulatory proceedings |
| Permits and licenses | Business permits, industry-specific licenses, cantonal authorizations |
| Employment contracts | Key employee terms, non-compete clauses, bonus structures, notice periods |
| Insurance | Policies, coverage limits, claims history |
Commercial Due Diligence
| Item | Details |
|---|---|
| Market position | Market share, competitive landscape, barriers to entry |
| Customer concentration | Top 10 customer revenue share — risk if any single customer exceeds 15-20% |
| Customer retention | Churn rates, contract renewal history, NPS or satisfaction scores |
| Sales pipeline | Current pipeline, win rates, average deal size, sales cycle length |
| Competitive threats | Direct competitors, substitute products, market disruption risks |
| Growth potential | Addressable market, expansion opportunities, geographic reach |
Operational Due Diligence
| Item | Details |
|---|---|
| Key employees | Roles, tenure, flight risk, succession readiness |
| IT systems | ERP, CRM, tech stack maturity, cybersecurity posture, data protection (FADP/nDSG) |
| Processes | Standard operating procedures, quality management (ISO certifications) |
| Supplier dependencies | Key suppliers, single-source risks, contract terms, lead times |
| Facilities | Condition, lease terms, CAPEX needs, environmental compliance |
Swiss-Specific Due Diligence Items
Acquiring a business in Switzerland involves regulatory and administrative elements that do not exist in many other jurisdictions:
| Item | Details |
|---|---|
| Handelsregister | Verify the company's commercial register entry, authorized signatories, and legal form |
| Cantonal permits | Industry-specific licenses (Gastro, healthcare, finance) vary by canton |
| Pension fund (BVG/LPP) | Review pension fund coverage ratio, obligations, and any underfunding |
| Employee notification | Swiss law requires employee information/consultation before a share or asset transfer (OR Art. 333) |
| MWST/TVA registration | Confirm VAT registration status and compliance history |
| AHV/AVS obligations | Verify social security contribution compliance for all employees |
| Environmental permits | Cantonal environmental authorizations, waste disposal, emissions compliance |
| Data protection (nDSG) | Compliance with the revised Swiss Federal Act on Data Protection |
Tips for a Smooth Due Diligence Process
- Set a clear timeline and stick to it — 4 to 8 weeks is typical for SME transactions.
- Use a virtual data room for secure document sharing.
- Engage your own advisors — do not rely solely on the seller's representations.
- Prioritize deal-breakers early: pension fund issues, undisclosed liabilities, key customer loss risks.
- Document everything — your due diligence findings inform the SPA warranties and indemnities.
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