Investment Screening Act: Risk for Startups

The Swiss Investment Screening Act (Investitionsprüfgesetz) would give  the federal government the power to review and, if necessary, block foreign direct investments in Swiss companies. Acquisitions in security-relevant and critical sectors, such as defense, energy, healthcare, and infrastructure, could be prohibited if they are deemed to threaten public order or national security.

What this means for Startups

For startups, the Investment Screening Act introduces several risks:

• Restricted or delayed access to venture capital: Young companies depend on foreign investment to scale. Longer approval procedures or blocked deals could slow growth.
• Legal uncertainty: Vague definitions of what counts as a “critical sector” leave founders unsure whether their companies fall under the new rules. 
• Competitive disadvantage: Innovative firms in cutting-edge areas such as cybersecurity and artificial intelligence (AI) may be excluded from international capital flows, weakening Switzerland’s global competitiveness. 

If adopted, the Investment Screening Act could unintentionally stifle innovation and reduce Switzerland’s appeal as a startup hub, precisely at a time when competition for talent and investment is intensifying globally.

Why the Startup Community Opposes the Act

The Swiss Startup Association (SSA) and many entrepreneurs strongly oppose the draft legislation. The concern is that a broad, restrictive framework would:

• Add bureaucratic hurdles for investors and founders
• Discourage international venture capital funds from engaging in Switzerland
• Shift valuable deals to other startup-friendly ecosystems in Europe and beyond

Instead of blanket restrictions, the startup community calls for targeted, clearly defined rules that protect security without burdening innovation.

Our Recommendations

To safeguard Switzerland’s role as an innovation hub, the Swiss Startup Association (SSA) proposes two key measures: 

1. Prevent the introduction of the Investment Screening Act and preserve Switzerland’s current liberal investment regime.
2. Monitoring instead of blocking: create an “investment radar” to track and analyze foreign investments, ensuring transparency without restricting growth

Such an approach would allow Switzerland to protect sensitive sectors where necessary while preserving the open, innovation-friendly climate that has made the country one of the leading startup locations worldwide.