Switzerland

Government Measure

Employers may request to temporarily defer the payment of the AVS-AHV/AI-IV/APG-EO/AC-ALV2 social security contributions (the "1st pillar contributions"). If this deferral is approved, no default interest is due.

Employers may also request the adjustment of the usual amount of the advance payments in respect of the 1st pillar contributions in the event of a significant decrease in the total payroll. The deferral of payments and reduction of advance payment requests is evaluated by the AVS-AHV compensation funds.

Eligibility

Businesses impacted by the current exceptional economic situation.

Supervising Authority

AVS-AHV compensation funds.

Availability

Effective as from 26 March 2020 for a period of six months.

Government Measure

The social insurances (AHV/IV/ALV/EO) generally waive, until 30 June 2020, the collection of default interest on arrears of social security contributions. The measure applies retroactively from 21 March. Contributions remain due and must be paid in full.

As of 1 July 2020, the compensation funds will once again submit summons in the event of non-payment of social security contributions and may, if necessary, institute legal proceedings.

³This measure complements the one already taken with regard to the suspension of default interest on deferred payments granted to companies lacking liquidity.

Eligibility

Company or self-employed person required to pay social security contributions.

Supervising Authority

AVS-AHV compensation funds.

Availability

Effective as from 29 April 2020 (with retroactive effect to 21 March 2020) to 30 June 2020.

Government Measure

Limitation periods are suspended for the entire debt collection system. This means, in essence, that debt collection acts may no longer be carried out. The following are, in particular, deemed debt collection acts:

• Service of an order to pay to debtors;
• Definitive and provisional dismissal of debtor’s objection; and
• Bankruptcy notice, bankruptcy hearings, and the declaration of bankruptcy.

Limitation periods triggered by debt enforcement acts that come to an end within this suspension period or the debt collection holidays will not expire during that period, but are extended until the third day following the end of the suspension period and the debt collection holidays.

Eligibility

All debtors, without exception.

Supervising Authority

Debt enforcement and bankruptcy offices.

Government Measure

The new COVID-19 Insolvency Ordinance temporarily allows executive bodies of Swiss companies not to notify the courts of an existing balance sheet over-indebtedness and to continue trading on the basis of an overall positive assessment of the future ability of the company to restructure its balance sheet by 31 December 2020.

To remove pressure from executive bodies and to avoid premature insolvency filings in view of daunting liability risks, the Swiss Federal Council has now ordered that companies with a healthy balance sheet (no over-indebtedness) as per 31 December 2019 will not have to comply with insolvency filing requirements established under Swiss law, if:

• there are prospects (Aussicht) that the company will have a "clean" balance sheet (no over-indebtedness) by 31 December 2020; and
• the company was not over-indebted as per 31 December 2019.

In addition, while corporate executives will still have to prepare interim financials in case of a concern of over-indebtedness, it will not be necessary to have such interim financials audited. The subsidiary filing obligation of auditors will be equally suspended. This allows for a dialogue between executive bodies and statutory auditors.

³ A company suffers "over-indebtedness" when the claims of the company’s creditors are not covered by the company’s assets.

Eligibility

Swiss based companies with a healthy balance sheet (no over-indebtedness) as per 31 December 2019.

Availability

Effective as from 20 April 2020 and, subject to any extension, expires six months thereafter.

Government Measure

Under the new COVID-19 Insolvency Ordinance, access of small and medium sized entities (SMEs) to a protective moratorium has been facilitated by introducing a special COVID-19 moratorium or 'moratorium-lite' with less stringent formal requirements.

The main differences between the 'moratorium-lite' and the general moratorium are as follows:

• the moratorium-lite is available to privately held SMEs only (i.e. not to listed or large companies);
• the "moratorium-lite" can only be applied for by the SME seeking protection (but not by its creditors);
• the applicant must have been balance sheet "healthy" (no over-indebtedness) as per 31 December 2019. This requirement is aimed at ensuring that the "moratorium-lite" will not be used for entities which were in distress prior to the COVID-19 pandemic. That said and in contrast to what is outlined above for the easing of filing obligations, companies showing an over-indebtedness as per 31 December 2019 which, at that time, was covered by debt subordinations may apply for a "moratorium-lite”;
• the financial information to be provided to the court is less specific than under a composition moratorium but must make plausible the applicant's financial position to the extent possible;
• the duration of the 'moratorium-lite' is initially up to three months (one time extension by up to three months possible);
• the appointment of an administrator by the court will be the exception (rather than the rule as in the general moratorium);
• the moratorium will always be public (no silent "moratorium-lite") and the SME will have to inform its creditors proactively once the "moratorium-lite" has been granted;
• while the "moratorium lite" generally offers protection against creditor action, certain remedies of a general moratorium do not apply: (i) Interest continues to accrue during the 'moratorium lite', (ii) court and administrative proceedings are not suspended automatically, (iii) it will not be possible for an administrator to order the conversion of non-monetary claims into monetary claims and (iv) long term agreements cannot be terminated to facilitate the restructuring even if an administrator is appointed;
• no specific "exit" rules apply to the "moratorium-lite", i.e. the SME will be operating under regular rules again once the term of the "moratorium-lite" has expired. There will not be any court involvement at that stage;
• as in the composition moratorium, super-priority of claims coming into existence during the "moratorium lite" requires consent from the administrator. However, as administrators will be the exception for the "moratorium lite", creditors may not expect to benefit from a super-priority.

If a "moratorium-lite" is applied for, the COVID-19 Insolvency Ordinance clarifies that the executive bodies of the relevant entity will have complied with their filing obligations in case of over-indebtedness.

Eligibility

Private Swiss based SMEs (as set out above).

Availability

Effective as from 20 April 2020 and, subject to any extension, expires six months thereafter.

Government Measure

The new COVID-19 Insolvency Ordinance provides for certain amendments to the general moratorium. In particular, applicants are currently not requested to provide a restructuring plan to the court together with the request for the grant of a provisional composition moratorium (i.e. the first stage of the general moratorium) as such document would be difficult to produce in the current uncertainty. Further, the maximum duration of the provisional moratorium has been extended to six months (previously: four months). Lastly, until 31 May 2020, courts will not have to open bankruptcy proceedings ex officio in case of uncertainties regarding the prospects of the successful restructuring provided, however, that the relevant debtor was not over-indebted as per 31 December 2019 or such over-indebtedness was covered by sufficient debt subordinations.

Eligibility

Debtors subject to bankruptcy proceedings.

Availability

Effective as from 20 April 2020 and, subject to any extension, expires six months thereafter.