Mr Daniel Hayek
Partner

Daniel Hayek is chairman of the management committee and head of the insolvency and restructuring team of Prager Dreifuss, one of Switzerland’s leading firms for commercial law. He graduated from the University of Zurich in 1990 (lic iur) and from New York University School of Law in 1995 (LLM in corporate law). He was admitted to the Bar in 1993. Before he joined Prager Dreifuss in 1997, he worked for another well-known business law firm. Daniel has been a partner with Prager Dreifuss Ltd since 2001.

Daniel Hayek’s practice focuses on all aspects of insolvency and restructuring matters, including representing creditors in bankruptcy-related litigation, registering or purchasing claims or in enforcing disputed claims before courts. His longstanding expertise includes M&A, corporate finance, takeovers, banking and finance and corporate matters, also in restructuring situations. He represents a broad range of corporate clients as well as private clients in all types of domestic and cross-border transactions in court and before arbitration tribunals.

Daniel’s recent practice comprises, amongst others, the representation of lenders in Tupperware restructuring as well as a large Swiss company in a Swiss restructuring situation. Further Daniel also represented the trustee and the security agent of the bondholders regarding their claims against one of Europe’s largest independent oil refiners, Swiss-based Petroplus group, enforcing a large claim based on derivatives in a litigation against the bankrupt estate of the Swiss Lehman entity and advising the trustee of the Kodak pension plan on the acquisition of assets and restructuring. Further, Daniel is leading a group of bondholders in negotiations and litigation proceedings against Banca Monte dei Paschi di Siena and the European Commission. He is also advising on the assignment of large claims raising complex cross-border issues against bankrupt estates such as Swissair, Erb and Lehman. Daniel and his team have been leading asset recovery against sovereign states and have a broad network of law firms world-wide they are working with.

KEY GLOBAL DEVELOPMENTS AND TRENDS IN RESTRUCTURING AND INSOLVENCY

In 2024, Switzerland continued to be a global hub for finance, trade, and business due to its particularly stable legal framework. Year 2024 provided several financial regulation and tax reforms as well as developments in insolvency law and bankruptcy procedures. The following article examines Switzerland’s current legal landscape and reflects on its ongoing efforts to maintain a competitive edge in international finance amidst global economic shift.

1. Switzerland’s Legal and Economic Framework

1.1 Global Economy

Geopolitical tensions and trade uncertainties influenced the global economy in 2024. Despite these challenges, Switzerland’s inflation rate dropped to 1.1%, even lower than the previous year.¹Schweizerische Nationalbank, Geopolitische Lagebeurteilung, 12. Dezember 2024 GDP growth was modest, at around 1% in 2024, and the labor market experienced a slight increase in unemployment. While risks from global developments persist, the Swiss National Bank (“SNB”) expects a slight increase in growth at about 1% to 1.5% for 2025. In this context, unemployment is expected to rise slightly, and utilization of production capacities is likely to decrease marginally. The SNB maintained a cautious monetary policy, with the official interest rate set at 1.75% in early 2024, with expectations for gradual easing in the coming years. As with other countries, Switzerland’s outlook is also subject to significant uncertainty and foreign developments represent the main risk.

1.2 Administrative and Tax Reforms

The Swiss tax landscape has kept pace with global economic shifts, with several key reforms introduced in 2024. Particularly, the tax environment has evolved with the introduction of supplementary taxes for large multinational companies. Since January 2024 large internationally active companies in Switzerland have become subject to a minimum tax rate of 15%. This measure aligns with the tax minimum for large corporations agreed upon by the OECD and G20 countries, aimed at preventing tax base erosion and profit shifting. The minimum tax applies to companies with a global turnover of over EUR 750 million, but it impacts only a small fraction of companies in Switzerland – approximately 99% remain unaffected. The international supplementary tax under the income inclusion rule (“IIR”), which is part of the OECD’s Pillar Two framework will come into effect in 2025. This also ensures the minimum taxation of all foreign business units of a corporate group at the ultimate parent entity (or an intermediate holding company) if the business units in question are not subject to minimum taxation in other jurisdictions.

A significant domestic reform in 2024 was the increase in the retirement age for women to 65 from 64, alongside new regulations around flexible retirement. These changes are part of the broader effort to stabilize Switzerland’s pension system, especially the Old Age and Survivor’s Insurance fund (AHV). To support these pension reforms, the VAT on goods and services has been raised from 7.7% to 8.1 %. The extra revenue will be fully directed to the compensation fund, stabilizing the fund and ensuring its sustainability for future generations.

The Swiss Federal Council decided to abolish industrial tariffs on non-agricultural products, which are a part of the import facilitation package of measures in order to strengthen Switzerland’s position as a business and industrial hub by reducing trade barriers. Consumers benefit from this measure, as tariffs which were previously imposed on good such as cars and household items no longer apply. This measure addresses the high cost of goods and services in Switzerland compared to neighboring countries, which is influenced by higher wages and other existing trade barriers.

The aftermath of the Credit Suisse / UBS merger continued to reverberate in 2024, with Swiss regulatory authorities reconsidering the “too big to fail” framework in light of the newly consolidated banking sector. A legislative proposal is under review to formalize the Public Liquidity Backing regime (PLB), enabling the Swiss National Bank to provide government-backed liquidity support to distressed banks during restructuring.

2. Updates in Corporate and Insolvency Law

2.1 Financial Regulations: Strengthening Compliance and Digitalization

To ensure continued innovation and stability and in order to remain a global leader in financial services, various steps have been taken to regulate digital assets. The framework for crypto currencies, digital assets and decentralized finance platforms have been adapted, the focus being on anti-money laundering measures.

Additionally, the introduction of the Limited Qualified Investor Fund (L-QIF) in 2024 aims to enhance Switzerland’s competitiveness in the investment fund market by offering a product exempt from the Swiss Financial Market Supervisory Authority (FINMA) supervision but limited to qualified investors.

In late 2024, the Federal Council initiated a consultation to amend the Financial Market Supervisions Act (FINMASA) and other relevant legislation to enhance Switzerland’s international cooperation in the financial sector. The goal is to ensure the Swiss financial system remains globally interconnected while maintaining market stability, transparency and integrity. Proposed amendments include streamlining FINMA’s administrative assistance procedures, potentially limiting the right to appeal for certain offenses such as market abuse and money laundering. The reforms also aim to strengthen cooperation between FINMA and the SNB, clarify cross-border information transmission, and authorize FINMA to request audits of foreign companies. Additionally, the legal framework for international cooperation in auditing will be aligned with FINMASA.

In May 2024 the Swiss Federal Council approved a proposal to strengthen the country’s anti-money laundering (AML) framework, which has been subsequently submitted to the Parliament. The key measures aim to reinforce Switzerland’s financial integrity and competitiveness, including the introduction of a federal register for beneficial owners, due diligence for high-risk legal activities and additional AML provisions. The register will not be public but rather managed by the Federal Department of Justice and Police. High-risk advisory activities such as legal advice related to company structuring and real estate transactions will be subject to AML due diligence requirements. The proposal, in line with international standards such as those of the Financial Action Task Force (FATF/GAFI), is expected to come into effect by 2026.

2.2 ESG Updates

Switzerland introduced mandatory climate reporting for large corporations in 2024, affecting public companies, banks, and insurers that meet certain size criteria, such as having a workforce of at least 500 employees, a balance sheet of CHF 20 million of higher or annual revenues exceeding CHF 40 million. However, ESG regulations in Switzerland are not as strictly enforced as in the EU, and the country is not fully aligned with international standards. The EU Corporate Sustainability Due Diligence Directive applies to Swiss companies with certain international ties, but its full impact is still unfolding. The Swiss Federal Act on Climate Protection Objectives, Innovation and Strengthening Energy Security, which came into force 1 January 2025, aims to reduce energy dependence and strengthen climate efforts with a net-zero target set for 2050.

2.3 Insolvency and Bankruptcy Law

In 2024, the number of company bankruptcies reached a new high compared to previous years, with the construction industry being the most affected, followed by trade and business services. Recent updates to Swiss insolvency law have streamlined bankruptcy procedures, aiming to reduce complexities and expedite resolution. A significant development is the simplification of restructuring processes, making it easier for companies to reorganize and avoid liquidations, ultimately helping to preserve jobs and maintain services vital to the economy.

The Federal Act on Combating Abusive Bankruptcy came into force on 1 January 2025, aiming to prevent individuals from exploiting bankruptcy proceedings to avoid financial obligations. This law, and the corresponding amendments to the Swiss Code of Obligations and the Swiss Criminal Code, targets those attempting to misuse the process and ensure that genuine cases of over-indebtedness are addressed without abuse, protecting the interest of creditors.

To give over-indebted individuals a second chance, the Federal Council and Parliament are planning to further amend the Federal Debt Enforcement and Bankruptcy Act in the coming years. A simplified debt restructuring procedure will allow debtors with regular income to escape debt. As part of a settlement, part of their debt will be forgiven, provided the majority of creditors agree and the court deems it appropriate. The settlement will also be binding for creditors who do not agree. For individuals who are hopelessly in debt and cannot reach a settlement, the Federal Council proposes a bankruptcy-based restructuring procedure which shall give all available funds to creditors over several years. To prevent abuse and excessive losses for creditors, several safeguards will be introduced. Once a debtor is freed from remaining debts, no new restructuring bankruptcy can be initiated for ten years. If the debtor suddenly comes into wealth (e.g., inheritance or gift), this wealth will benefit creditors for a certain period after the procedure.

3. Sustainable Finance Regulations

The Federal Act on the Reduction of CO2 Emissions and the Unfair Competition Act are set to be amended in 2025, aiming to prevent misleading environmental claims, i.e. greenwashing, and increase transparency regarding ecological statements. Companies will be required to demonstrate that their environmental claims are based on verifiable facts and the Swiss consume protection organization will set up a platform for consumers to report suspected greenwashing cases. The changes aim to build consumer trust and encourage companies to make credible and transparent environmental promises, reflecting a tone reminiscent of the 20th century approaches to corporate accountability.

4. Outlook

Switzerland is set to strengthen its leadership in sustainable finance with new regulatory measures aimed at preventing greenwashing and increasing transparency on environmental impact. The steps will reinforce the credibility of Swiss financial institutions managing ESG factors. The regulation of fintech innovations, especially stablecoins and crypto assets, will gain attention in the coming years. The Swiss government is expected to address regulatory gaps in this sector, with new legislation likely to be introduced in 2025 to ensure a secure and clear framework for digital currencies. Switzerland’s relationship with the EU will continue to evolve, particularly in areas such as trade agreements, data protection, and market assets. Additionally, the regulation of Artificial Intelligence will become a priority, ensuring its ethical use and integration into financial services while safeguarding transparency and security. Navigating international sanctions remains complex due to Switzerland’s neutral stance, requiring careful alignment with global standards while retaining its reputation as a secure financial hub.