From bearer shares to beneficial owners

The bearer share in Ticino practice

For most of the twentieth century the bearer share (Inhaberaktie, azione al portatore) was the ordinary instrument of the Ticino holding company. Swiss company law allowed a stock corporation to issue shares that passed by simple delivery of the certificate, without any entry in a register and without any notice to the company. A Milanese industrialist could therefore own a Lugano SA whose certificates lay in a safe deposit box at his bank, while the commercial register showed only the directors, often local lawyers or fiduciaries. The company's books did not reveal the shareholder, and the directors could truthfully say that they did not know who held the shares on a given day. Chapter D.II describes how this structure became part of the lira economy of the post-war decades. Chapter D.III shows how the Chiasso scandal of 1977 exposed its use for the concealment of Italian funds through the Liechtenstein entity Texon.¹

The bearer share was not illegal and served legitimate purposes, such as the quiet transfer of family holdings or the protection of owners against kidnapping, which was a real risk in Italy in the 1970s and 1980s. Its weakness lay in the fact that it made the legal owner invisible to the State. From June 1977, under the due diligence agreement that the banks and the Swiss Bankers Association concluded with the Swiss National Bank after the Chiasso scandal, banks had to verify the identity of their clients. The agreement and its successors came to require the bank to establish the beneficial owner of accounts held by domiciliary companies, using the declaration known as Form A. The company itself, however, had no such obligation. The result was an asymmetry that persisted for almost four decades: the Lugano bank knew the beneficial owner of the SA's account, while the SA and the commercial register did not know its shareholders.²

The GAFI Act of 2014

The first statutory break came from the Financial Action Task Force. Its revised Recommendations of 2012 required states to ensure that adequate, accurate and timely information on the beneficial ownership of legal persons could be obtained by competent authorities (Recommendation 24). Switzerland implemented the revised Recommendations by the Federal Act of 12 December 2014, which is known as the GAFI Act and which also introduced the qualified tax offence as a predicate offence to money laundering discussed below.³ In company law the Act introduced, with effect from 1 July 2015, a duty for every person acquiring bearer shares of a non-listed company to notify the company of the acquisition and of his identity within one month (Art. 697i CO). It added a duty for any person who, alone or in concert with third parties, reaches 25 per cent of the capital or votes to notify the company of the natural person for whom he ultimately acts (Art. 697j CO). The company had to keep a register of these persons (Art. 697l CO). A shareholder who failed to notify could not exercise his membership rights, and his property rights lapsed if he did not notify within one month (Art. 697m CO).⁴

The system relied on self-declaration and had no external control. The company kept the register but had no means of verifying it, and no authority had routine access to it. The Global Forum on Transparency and Exchange of Information for Tax Purposes found the arrangement insufficient, especially because companies that had issued bearer shares before 2015 could continue to exist with shareholders whose identity was known only to themselves.⁵

Notes

1. For the Chiasso affair see Chapter D.III and the sources cited there. ↩
2. Eidgenössische Bankenkommission, Jahresbericht 1977 , p. 20, https://finma.ch/FinmaArchiv/ebk/d/publik/bericht/pdf/jb77-d.pdf (agreement on due diligence in accepting funds and on the handling of banking secrecy, concluded in June 1977 between the banks domiciled in Switzerland and the Swiss Bankers Association on the one hand and the National Bank on the other; the report gives the date as 2 June 1977). On the current version, CDB 20, in force since 1 January 2020, with the rules on establishing the beneficial owner of assets in Art. 27 ff.: Wikipedia (German), "Vereinbarung über die Standesregeln zur Sorgfaltspflicht der Banken", https://de.wikipedia.org/wiki/Vereinbarung_über_die_Standesregeln_zur_Sorgfaltspflicht_der _Banken (used as a last resort). ↩
3. Lenz & Staehelin, "Umsetzung der revidierten GAFI-Empfehlungen", Newsflash, June 2015, https://www.lenzstaehelin.com/fileadmin/user_upload/publications/150604_Newsflash_FATF_ CC_AMLA_de.pdf (Federal Act of 12 December 2014; partial entry into force on 1 July 2015 and on 1 January 2016). ↩
4. Swiss Code of Obligations (CO), SR 220, Art. 697i, 697j, 697l and 697m, inserted by the Federal Act of 12 December 2014 implementing the revised FATF Recommendations of 2012, in force since 1 July 2015 (AS 2015 1389), https://www.droit-bilingue.ch/de-fr/2/22/220-697j-985.html and https://www.droit-bilingue.ch/de-fr/2/22/220-697m-988.html. Art. 697m para. 3 provides that property rights are forfeited if the shareholder does not report within one month of the acquisition. Art. 697i was repealed by the Global Forum Act of 21 June 2019 with effect from 1 May 2021 (AS 2019 3161), https://www.droit-bilingue.ch/de-fr/2/22/220-697i-984.html. ↩
5. Swiss Federal Council, "Global Forum: Switzerland scores well", press release of 6 April 2020, https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-78708.html, referring to the recommendations on bearer shares. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.