Intercompany Loan Agreement Template for Switzerland

An Intercompany Loan Agreement is a legally binding contract that governs financial lending arrangements between related corporate entities within the same business group. Under Swiss law, these agreements must comply with the Swiss Code of Obligations, particularly Articles 312-318 covering loan agreements, while ensuring proper corporate governance and regulatory compliance.

When do you need this document?

You need an Intercompany Loan Agreement when your parent company provides financing to a subsidiary for expansion projects, when your holding company lends working capital to operating entities, or when your group treasury function centralizes financing across multiple jurisdictions. This document is essential when establishing credit facilities between joint venture partners, providing bridge financing for acquisitions, or restructuring existing intercompany debt arrangements. Swiss companies particularly require this agreement when cross-border lending involves withholding tax considerations or when documenting arm's length terms for transfer pricing purposes.

Key legal considerations

The agreement must clearly define the loan principal, interest calculation method, and repayment terms to satisfy Swiss legal requirements. You should include specific provisions for default scenarios, security arrangements, and early termination rights to protect both parties' interests. Interest rates must reflect arm's length pricing to comply with transfer pricing regulations and avoid tax authority challenges. The document should address currency denomination, particularly important for Swiss franc loans or foreign currency arrangements. Corporate authorization clauses ensure both entities have proper authority to enter the lending relationship, while dispute resolution mechanisms provide clear enforcement procedures under Swiss jurisdiction.

Legal requirements in Switzerland

Swiss law requires intercompany loans to comply with thin capitalization rules under Swiss Federal Tax Law, limiting the deductibility of interest payments when debt-to-equity ratios exceed prescribed thresholds. You must consider stamp duty implications, as loan agreements may trigger federal stamp duties depending on the loan amount and structure. The Swiss Banking Act may apply if loan amounts exceed certain thresholds or if lending activities constitute banking business requiring authorization. Corporate law provisions mandate that loan agreements receive proper board approval and comply with statutory capital maintenance rules. Withholding tax obligations may arise on interest payments, particularly for cross-border arrangements, requiring careful structuring to optimize tax efficiency while maintaining compliance with Swiss regulatory requirements.