An open-ended investment fund in Switzerland is a type of vehicle in which the investors may issue an unlimited amount of shares. The Swiss legislation allows the incorporation of various types of funds set up as open-ended vehicles, such as alternative investment funds (AIFs), mutual funds or retail funds.

Investors interested in how to start a fund in Switzerland should know that the applicable legislation clearly distinguishes between open-ended and closed-ended structures, as they have different regulations related to the issuance of shares or units. 
 

As mentioned above, in an open-ended fund, the investors will have the right to issue an unlimited number of shares. Also, in these funds, the investors may redeem the company’s units at the net value asset (NAV).
 

Investment funds in Switzerland registered as collective investment schemes must be registered as one of the following entities: 
 

• contractual fund;

• investment company with variable capital (SICAV). 
 

An investment vehicle set up as a contractual fund will need to appoint a fund management company and a custodian bank, which have to receive an authorization issued by the Swiss Financial Market Supervisory Authority (FINMA). In this sense, it is necessary to provide a fund contract to the FINMA representatives, which will also include consent of the custodian bank. 
 

The registration requirements are similar for the SICAV structure as well, with the main difference that the investors will have to submit to FINMA the company’s statutory documents (articles of association). As a general rule, all investment funds registered as SICAVs should also appoint a custodian bank, but there are certain exemptions applicable in this case.  
 

FINMA is the main regulatory body available for investment vehicles. All types of investment companies, including a hedge fund startup, are required to receive authorization from this institution. 
 

Investors who are interested in how to start an investment fund in Switzerland may also set the following types of funds, depending on their type of investment: 
 

• securities funds;

• real estate funds;

• alternative investment funds. 
 

The investment funds registered as open-ended vehicles are regulated under the Collective Investment Schemes Act (CISA), applicable in Switzerland starting with 1st of January 2007. 
 

Businessmen are invited to contact our team of affiliates in Switzerland for more details on the legislation referring to open-ended funds.