Switzerland – New Rules for Opting-Out of Auditor Requirements

As of the 1st of January 2025, Switzerland has implemented new audit opt-out regulations. The new regulations have been communicated by a circular from the Swiss Federal Commercial Registry Office, outlining the changes and how businesses must declare and renew their audit opt-out status.

Key Changes

1. Advance Declaration Required

Companies wishing to opt-out of limited audits must now declare their intention before the start of the financial year. This declaration must include the previous year’s annual financial statements. Retroactive opt-outs will no longer be permitted.

2. Renewal Process Introduced

The Commercial Registry Office may require companies to renew their opt-out status or appoint an auditor if:

• Cantonal tax authorities report non-submission of annual financial statements
• Circumstances suggest opt-out conditions are no longer met

Eligibility for Opting-Out

Companies can opt-out of limited audits if they:

• Do not meet requirements for ordinary audits
• Have 10 or fewer full-time employees on average
• Obtain unanimous shareholder agreement

Implementation Timeline

The new rules took effect on the 1st of January 2025. For the 2026 financial year, companies must register their opt-out declaration by the 31st of December 2025.

Steps for Opting-Out or Renewal

1. Obtain shareholder resolution for upcoming year
2. Submit declaration to Commercial Registry Office
3. Attach approved annual financial statements from previous year

The Risks of Non-Compliance

If an opt-out application is handed in too late or submitted without the necessary financial statements, the Commercial Registry Office will reject the application.

Non-compliance with the duties regarding a renewal might constitute an organizational defect. This will trigger a deadline to rectify the situation (i.e. either renew the opting-out or appoint an auditor). Failure to rectify may result in court proceedings.

How Mercator® by Citco Can Help

Our team can assist with:

• Preparing shareholder resolutions
• Drafting opt-out declarations
• Submitting applications to the Commercial Registry Office

Contact us today for expert guidance and support with Switzerland’s new audit opt-out regulations.