In a significant move to combat financial crime and enhance transparency, Switzerland is set to introduce a Federal Register of Beneficial Owners under the Legal Entities Transparency Act (LETA). Passed by the Swiss Parliament on September 26, 2025, the new law is expected to come into effect by mid-2026, and it is poised to overhaul how Switzerland handles information on beneficial ownership within its financial and corporate sectors.
The driving force behind LETA
Switzerland has long prided itself on being a global financial hub known for its stability, trustworthiness, and robust regulatory frameworks. However, international standards have evolved, particularly in the realms of anti-money laundering (AML) and the prevention of terrorist financing. In line with these global shifts, LETA is designed to align Switzerland’s financial sector with international regulations such as those from the Financial Action Task Force (FATF) and the European Union.
The primary purpose of the Transparency Register is to ensure that criminals cannot hide behind opaque corporate structures to launder money or fund terrorism. By centralizing data on the ultimate beneficial owners (UBOs) of companies, the register will enable authorities to track financial activity more effectively and root out illicit financial practices.
Key features of the Legal Entities Transparency Act (LETA)
- Scope of the Law
The law mandates that all Swiss legal entities, including corporations (AG/SA), limited liability companies (GmbH/Sàrl), cooperatives, and certain foreign entities with a nexus to Switzerland, must disclose their beneficial owners. The register will include details such as the full name, date of birth, nationality, address, and the nature of the control that these owners hold over the entity.
- Non-public access
Unlike some jurisdictions that make their beneficial ownership registers publicly available, Switzerland's register will be non-public. It will be accessible to government authorities, financial intermediaries, and other authorized bodies that need the information for compliance or law enforcement purposes.
- Enhanced compliance obligations
Companies will be required to report the identity of their beneficial owners to the central register within one month of their establishment and must update this information whenever there are changes. Financial intermediaries who identify discrepancies between a company’s reported ownership and the information they hold will have an obligation to report these inconsistencies to the relevant authorities.
- Penalties for non-compliance
The penalties for failing to comply with these requirements are severe. Legal entities that intentionally provide false information or fail to register the required data can face fines of up to CHF 500,000. This will serve as a strong deterrent against non-compliance and reinforce the importance of maintaining transparency in business operations.
- Exemptions
Certain entities are exempt from this law, including state-owned companies and publicly listed companies (and their subsidiaries with more than 75% ownership). These exemptions are designed to reduce administrative burden on entities already subject to other regulations, though they do not diminish the law’s overall effectiveness.
Why this legislation matters
- Aligning with international standards
The introduction of LETA is Switzerland’s commitment to upholding international standards on financial crime prevention. By adopting these measures, Switzerland ensures that it is not left behind as other countries strengthen their transparency frameworks. The FATF recommendations require countries to maintain accessible, accurate, and timely information on the beneficial ownership of companies. With LETA, Switzerland is positioning itself to stay in line with these global expectations.
- Combatting financial crime
The ability for authorities to access reliable ownership data will allow them to detect and prevent money laundering and terrorist financing more effectively. By centralizing beneficial ownership information, Switzerland aims to close the gaps that criminals have historically exploited. This transparency is a critical tool in the fight against financial crime.
- Maintaining Switzerland’s reputation
Switzerland has long been regarded as a trusted financial center. The adoption of LETA strengthens its reputation as a jurisdiction that actively combats financial crime and is dedicated to upholding the highest standards of financial integrity. This will not only benefit the country’s financial sector but will also boost investor confidence, ensuring Switzerland remains an attractive destination for business.
What’s next?
The Federal Department of Justice and Police will maintain the Transparency Register, which will be a central repository for all UBO data. The implementing ordinances are currently being prepared, and a public consultation period will conclude in January 2026. After this period, the Federal Council will issue a final version of the regulations, with LETA officially coming into force mid-2026.
In the interim, businesses should begin preparing for the implementation of these new compliance obligations. This means ensuring their internal systems are capable of collecting and verifying beneficial ownership information for submission to the register. Financial intermediaries will also need to familiarize themselves with the new requirements to ensure they are compliant with the law once it takes effect.
Conclusion
Switzerland’s new Legal Entities Transparency Act marks a significant shift in the country’s approach to financial transparency and anti-money laundering efforts. By establishing a centralized register of beneficial owners, Switzerland is aligning itself with international standards and strengthening its reputation as a leading financial hub committed to integrity and accountability.
For businesses, this means heightened transparency obligations, but also an opportunity to demonstrate their commitment to operating within a regulatory framework that fosters trust and reliability. The introduction of LETA is a pivotal step in ensuring that Switzerland remains a secure and reputable place for both domestic and international business.
As we approach the mid-2026 implementation, companies should begin preparing for these new requirements, ensuring they have robust mechanisms in place to comply with this important regulation.
