On 1st October 2026, the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETA) came into force. It introduces a federal transparency register which centralises information relating to the beneficial owners (BOs) of entities subject to the Act.
The reform forms part of the strengthening of Switzerland’s framework for combating money laundering and financial crime, as well as the implementation of international standards on the transparency of legal entities. It has a twofold objective: to improve the identification of individuals who ultimately control legal structures and to enable the competent authorities to access such information more rapidly.
A new register of beneficial owners
Companies subject to the Act are required to identify their BOs, verify their identity and status as BOs with the level of diligence required by the circumstances, collect and retain the relevant information, and report that information to the register. The approximately 600,000 Swiss SAs and Sàrls constitute the vast majority of entities subject to the Act. Cooperatives, SICAVs, SICAFs and limited partnerships for collective investment schemes are also among the entities concerned.
The LETA defines a BO as the natural person who ultimately controls a company, either alone or in concert with third parties, in particular through a participation representing at least 25% of the share capital or voting rights, or “in any other way”. The ordinance implementing the LETA (LETO) specifies the indicators that may characterise such control, including certain veto or appointment rights, agreements between shareholders or partners, options or fiduciary relationships. Where no individual meets the legal criteria defining the BO, the most senior member of the governing body is deemed to be the BO.
Control structures may sometimes be complex
The LETA is not limited to Swiss entities. Certain foreign legal entities are also subject to the Act where they maintain a branch registered in the Swiss Commercial Register, have their place of effective management in Switzerland, or own or acquire real estate in Switzerland within the meaning of the ANRA (Federal Act on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents).
Particular attention should be paid to entities whose place of effective management is in Switzerland. According to the case law of the Swiss Supreme Court, the place of effective management is where decisions concerning the day-to-day operations are taken and where the company is actually managed. Consequently, a foreign company may fall within the scope of the LETA even where its inclusion is not as readily apparent as that of a Swiss company registered in the commercial register.
Structures involving a trust also illustrate the complexity of the new regime. Where a chain of ownership or control involves at least two intermediary entities, a trust or a fiduciary relationship, the entity subject to the LETA must document this chain. If the chain involves a trust, the entity subject to the LETA must identify the trust’s BOs, namely the settlor, trustee, protector, beneficiaries and any other person exercising control over the trust in any other way. A company subject to the LETA and held by a trust will therefore be required to report information concerning the trust’s BOs to the register.
The situation is different where the trust is considered on a standalone basis. The LETA requires trustees domiciled or having their registered office in Switzerland, or administering a trust in Switzerland – where they are not already subject to the AMLA – to identify and verify the trust’s BOs and to retain the relevant information. However, these BOs do not need to be reported to the register.
A register that does not replace AMLA due diligence obligations
The register constitutes a new source of information for financial intermediaries in fulfilling their due diligence obligations under the AMLA.
Entries in the register are declaratory in nature and do not have constitutive effect. Nevertheless, the law provides that a financial intermediary may rely on the information contained in the register where an examination of the BOs carried out in accordance with the AMLA, with the level of diligence required by the circumstances, reveals no anomalies.
The register therefore does not replace AMLA due diligence obligations; rather, it complements them. The law allows financial intermediaries to consult the register to the extent necessary to fulfil their AMLA obligations, without, however, establishing a general obligation to consult it systematically at the start of each client relationship or during periodic reviews. That said, depending on the circumstances and the level of risk associated with the business relationship, the general duty of diligence incumbent upon the financial intermediary under the AMLA may require consulting the register in order to verify or supplement the relevant information regarding the BO.
Indeed, it is precisely the comparison between the information recorded in the register and that collected as part of the KYC process that may reveal discrepancies.
Discrepancies must be reported from April 2027
As from 1 April 2027, financial intermediaries will be required to report a discrepancy to the register where it is likely to cast doubt on the accuracy, completeness or currency of the information relating to the BO and remains unresolved after the client has been contacted and given a reasonable period of time to resolve it.
Not every difference will therefore have to be reported. In particular, the LETO excludes differences arising from the distinct definitions of the BO under the AMLA and the LETA, mere formal variations, or certain discrepancies concerning the chain of control that do not call into question the information relating to the BO.
Where reporting is required, it must be made within 30 days. This period begins to run upon the expiry of the deadline granted to the client to resolve the discrepancy, or upon receipt of a response that fails to resolve it.
Thus, the new register does not exempt the financial intermediary from understanding their client’s ownership and control structures. Rather, it provides them with a new point of reference: one that is sufficiently reliable to be used when nothing gives rise to doubt, but which must be cross-checked against the information gathered as part of their AMLA due diligence obligations, particularly where trusts, complex chains of control or foreign companies are involved.
Extended access rights
The new register was designed as an instrument for combating money laundering. Accordingly, financial intermediaries, MROS, the police and judicial authorities will have access to it.
However, other authorities will also have access to the register even though they are not necessarily involved in anti-money laundering enforcement: tax authorities, land registries, authorities responsible for applying the ANRA, public procurement authorities, authorities responsible for granting financial assistance, and social security enforcement bodies.
The register therefore appears to have a broader regulatory and enforcement function. Its purpose is to help prevent all kinds of fraud and other offences, well beyond the fight against money laundering. The resulting concern is that its purpose could shift: initially designed to serve a specific objective, the register could gradually evolve into a general tool for surveillance as its uses continue to expand.
Frédérique Bensahel
Partner, Geneva
Banking and Finance (Head of practice)
&
Julien Le Fort
Associate, Geneva
