What a Swiss SPV needs to be respected

What an SPV is, and why substance is the whole question

An SPV is a company set up for one transaction or one asset, and nothing else: to raise or on-lend finance, securitise receivables, hold shares as a group holding, own a single property, or sit at the centre of a joint venture or acquisition. Switzerland has no separate SPV statute, so a Swiss SPV is an ordinary company under the Swiss Code of Obligations with a narrow purpose clause. The mechanics of forming one (AG against GmbH, share capital, the register route, bankruptcy-remoteness) are a separate subject, covered in our guide to opening an SPV company in Switzerland. This page is about the question that decides whether the vehicle works once it exists: will its Swiss residence and the benefits attached to it be respected, or will it be seen through as a conduit and those benefits denied.

The question has teeth because the rules have moved, over the past decade, from form toward substance. A structure that passed muster on paper in the early 2010s can be challenged today for lacking genuine presence. Treaty beneficial-ownership tests, domestic anti-abuse doctrine and the OECD minimum-tax framework all push the same way: real activity is rewarded, paper presence is penalised. An SPV is where this bites hardest, because its activity is light by design. It owns one thing or owes for one thing, which makes it easy to run on a shoestring. The shoestring is what fails.

When a Swiss SPV is respected

A Swiss SPV is respected when a reviewer can see that it is genuinely managed in Switzerland and that it owns its income rather than merely passing it through. That is a practical test rather than a checklist score, but it rests on a recognisable set of elements. The board meets here and the meetings decide something real, with minutes that record deliberation. At least one director is resident in Switzerland, which Art. 718 para. 4 CO requires in any case, since the company must be capable of being represented by a Swiss-resident signatory. The registered office is a genuine address in the canton of seat, the statutory books are kept there, the accounts are prepared, and the bank account is operated locally rather than steered entirely from the parent.

These are the ordinary attributes of a company actually run where it says it is run; the difficulty is never understanding them but sustaining them year after year on an entity that has almost no business of its own. In the vehicles we administer, the part that bites is rarely the office or the resident director taken in isolation. It is whether the board genuinely decides in Switzerland, with minutes that record a decision being made here rather than ratifying one already taken at the parent. A reviewer who reads a year of those minutes can usually tell the difference, and that is where thin structures come apart.

When a Swiss SPV is disregarded

A Swiss SPV is disregarded when it is a pure conduit: an entity that receives income and is bound, contractually or in practice, to route it straight on, with the real decisions taken elsewhere. The classic pattern is the back-to-back arrangement: money comes in, money goes out on matching terms, the SPV bears no genuine risk and exercises no genuine discretion, and the only thing it adds is a better treaty position than the ultimate recipient could claim directly. Where a reviewer sees that pattern, the SPV is treated as not the beneficial owner, and the benefit it was inserted to obtain is refused.

"Disregarded" does not mean the company vanishes. It stays legally in existence and on the commercial register; what is denied is the tax consequence. The gaps a thin SPV most often falls through, and what each failure costs:

The common thread is that none of these reviewers cares what the structure was called at formation. Each looks at where decisions are actually taken and whether the vehicle genuinely owns its income. A purpose clause and a Zefix entry prove the company exists; they say nothing about whether it is run from Switzerland.

Beneficial ownership, withholding tax and treaty access

Beneficial ownership is the hinge on which a Swiss SPV's treaty access turns. Switzerland levies a federal withholding tax (Verrechnungssteuer) of 35% on dividends and on interest from Swiss-issued bonds, under the Withholding Tax Act (VStG), deducted at source. The 35% is a security mechanism rather than necessarily a final cost. Recovering it down to a treaty residual of 15%, 5% or 0% depends on the recipient being the beneficial owner of the income. A mere conduit is not, and for it the 35% can become definitive on the relevant flow.

The same concept governs the outbound side. When a Swiss SPV claims a reduced rate, or zero, on income from a treaty country, that counterparty state applies its own beneficial-ownership and anti-abuse tests. If the SPV is seen as inserted only to access a better treaty than the ultimate owner could claim, the relief is refused in the source state, and the vehicle carries cost and governance without delivering the rate it was built to obtain. How the 35% works, who recovers it, and the notification procedure that replaces the cash cycle for qualifying groups are set out in our guide to dividend taxation in Switzerland. The Federal Tax Administration applies the beneficial-ownership test on refund and notification requests, and it queries the thin cases.

How much substance is enough

Enough substance is exactly as much as the structure relies on Switzerland for, so there is no universal figure; the requirement is relative to what is at stake on the vehicle. A passive intra-group holding that claims no treaty relief and sits in no minimum-tax group can hold up on a light footing: office, resident director, books, governance kept current. A holding that leans on a low treaty residual, or claims the participation deduction on a substantial dividend flow, needs presence that demonstrably owns and manages the income. An SPV inside a Pillar Two group weighs the carve-out arithmetic on top of that.

The honest way to size it is to work backwards from the benefit: ask what consequence the vehicle exists to obtain, then what a reviewer testing that consequence would need to see, and build to that. Under-providing to save administration cost is a false economy once the position is challenged and the benefit falls away with back tax and interest behind it. Matching presence to exposure is the design problem our Swiss substance package solves, and the substance is then carried by the recurring SPV administration that keeps it real.

How Pillar Two changes the calculation

Pillar Two adds calculable consequences to a principle that already governed treaty and residence positions. The OECD global minimum-tax rules apply to groups with consolidated revenue of EUR 750 million or more and top low-taxed profit up to an effective 15%. They reward genuine substance through the substance-based income exclusion, which removes from the top-up base a percentage of real payroll costs and the carrying value of tangible assets in the jurisdiction. The percentages are on a long phase-down: in 2024 the exclusion was 9.8% of payroll and 7.8% of tangible assets, declining toward a steady-state 5% for both by 2033. A vehicle with no payroll and no tangible assets gets nothing from this carve-out.

Switzerland has implemented the framework in stages. It has levied a qualified domestic minimum top-up tax since 1 January 2024, and the Federal Council brought the income inclusion rule into force from 1 January 2025; the undertaxed-profits rule has been postponed indefinitely. For an in-scope SPV, substance is no longer only a defence of Swiss residence; it is an input into how the vehicle's profit is treated under the minimum-tax computation, and it has to be real to count. Quantifying how much a particular structure needs is the work of our Pillar Two advisory practice, which sits alongside the substance the administration builds.

What substance does not buy you

Substance does not make a paper position retroactively defensible. Minutes written after a refund query lands, recording decisions actually taken at the parent, do not create substance that was never there; they tend to make a weak position worse, because authorities can distinguish contemporaneous evidence from a file assembled to answer a challenge. Substance has to be real from the point it is built and documented as the activity happens, which is why it is stood up before it is needed.

Two further limits are worth stating plainly. Substance does not turn a genuine conduit into a beneficial owner: if the vehicle is bound to pass income straight on and bears no risk, adding an office and a director does not change the economic reality a reviewer sees. And substance does not buy a result the structure was never entitled to; it secures a position that is genuinely available, by making the residence and ownership of income true. Where a client wants an address and nothing behind it, that is the conduit pattern that now fails, and it is work this firm declines.

The recurring administration that keeps substance alive

Substance is a calendar, not a one-off build, and the gap that defeats an SPV is almost always the one that opened unnoticed after set-up. A vehicle left to drift loses its substance without anyone deciding to let it go: the board stops deciding in Switzerland, the books fall behind, the account is run from the parent, and the shortfall stays invisible until a refund is queried or a treaty partner tests the claim, when it is too late to fix for the years in question. Keeping it alive is an annual cycle of real things: the board meeting and genuinely deciding here with minutes that record deliberation, the accounts and returns prepared and filed, the registers kept current, the bank account managed locally, and material changes notified or approved before they happen. Where the vehicle relies on a resident director, that director has to carry genuine duties, which is why the role belongs to directorship services rather than to a name lent for the register. Run as one accountable cycle, the vehicle holds up when examined; scattered across providers each doing a piece, it develops the gaps no one is watching for. What genuine Swiss presence requires across a whole structure is treated in our substance and Pillar Two guides.