1The Confederation may legislate on professional activities in the private sector.
2It shall seek to create a unified Swiss economic area. It shall guarantee that persons with an academic qualification or with a federal or cantonal educational qualification or an educational qualification recognised by a Canton are able to practise their profession throughout Switzerland.
3For the protection of the economy, private property and shareholders, and to guarantee sustainable corporate governance, the law shall regulate Swiss companies limited by shares listed on stock exchanges in Switzerland or abroad in accordance with the following principles:
the general meeting votes on an annual basis on the total amount of all remuneration (money and the value of benefits in kind) given to the board of directors, the executive board and the board of advisors. It elects on an annual basis the president of the board of directors, the individual members of the board of directors and the remuneration committee, and the independent representatives of voting rights. Pension funds vote in the interests of their insured members and disclose how they have voted. Shareholders may vote remotely online; they may not be represented by a governing officer of the company or by a custodian bank;
the governing officers may not be given severance or similar payments, advance payments, bonuses for company purchases and sales, additional contracts as consultants to or employees of other companies in the group. The management of the company may not be delegated to a legal entity;
the articles of association regulate the amount of credits, loans and pensions payable to governing officers, their profit-sharing and equity participation plans and the number of mandates they may accept outside the group, as well as the duration of employment contracts of members of the executive board;
persons violating the provisions under letters a-c are liable to a custodial sentence not exceeding three years and to a monetary penalty not exceeding six times their annual remuneration.
57* With transitional provision
Overview
Art. 95 FC regulates three important areas of the Swiss economic order. It gives the Confederation the competence to issue regulations for private economic activities. This means: the Confederation can determine how companies and self-employed persons are permitted to work.
The provision ensures a unified economic area throughout Switzerland. Anyone with recognised professional training can practise their profession throughout Switzerland. A Bernese doctor may also practise in Geneva, a Zurich electrician may also work in Lucerne. This rule prevents cantons from sealing off their own markets.
Art. 95 FC regulates large publicly traded stock corporations in particular detail. This so-called "Rip-off Initiative" from 2013 stipulates: shareholders (participants in the company) must vote annually on all salaries and bonuses of the executive management. They also elect the chairman of the board of directors directly. Severance payments and golden parachutes are prohibited. Those who violate these rules can be punished with up to three years in prison.
An example: The major bank UBS must have its shareholders vote on executive compensation every year. If they vote against it, the compensation is not permitted.
The federal competence under para. 1 is very far-reaching. The Federal Supreme Court confirmed in BGE 125 I 276 that "any commercially exercised, private economic activity" falls under it. According to Felix Uhlmann in his BSK commentary, the Confederation can "autonomously determine the concept of private economic activity" (BSK BV, Art. 95 N. 4). The Federal Council emphasised in the message on the total revision that this competence is "comprehensive" (BBl 1997 I 303).
The provision thus combines fundamental rights protection with state regulation: it enables economic freedom, but also sets limits to protect the general public.
No. 1 Art. 95 Cst. is based on three historical roots. The competence to regulate private economic activity (para. 1) goes back to Art. 31 para. 2 old Cst., which granted the Confederation subsidiary legislative competence for trade and commerce as early as 1874. The internal market provisions (para. 2) were inserted in 1995 as Art. 95 para. 2 old Cst. to constitutionally guarantee the free movement of persons within Switzerland (BBl 1995 I 1213). The company law requirements (para. 3) stem from the popular initiative «against rip-offs» and were accepted by the people and all cantons on 3 March 2013 (BBl 2013 2905).
No. 2 The Message on the total revision of the Federal Constitution of 1996 emphasised that the federal competence according to para. 1 is «comprehensive» and allows the Confederation to «act legislatively in the field of private economic activity» (BBl 1997 I 303). This competence has «subsequently derogatory effect», whereby contrary cantonal law is set aside.
No. 3 Art. 95 Cst. forms the centrepiece of federal economic competences. It is closely connected with economic freedom (→ Art. 27 Cst.) and the principles of economic order (→ Art. 94 Cst.). While Art. 27 Cst. guarantees the individual fundamental right to free economic activity, Art. 95 Cst. authorises the Confederation to regulate this freedom.
No. 4 The provision must be distinguished from the specific economic competences of the Confederation (→ Art. 96-98 Cst.) as well as from cantonal competences in the area of public order and security. Felix Uhlmann emphasises that the Confederation has the authority to «determine the concept of private economic activity autonomously and not to follow strictly the limitations of the fundamental right according to Federal Supreme Court case law» (Uhlmann, BSK BV, Art. 95 No. 4).
#3. Elements of the Offence / Content of the Provision
No. 5 The concept of private economic activity encompasses any activity by private economic actors aimed at profit or earned income. The Federal Supreme Court has confirmed in consistent case law that this includes «any professionally exercised, private economic activity», regardless of the specific industry or type of profession (BGE 125 I 276 consid. 6a).
No. 6 Federal competence is comprehensive, but not unlimited. It is subject to constitutional principles, in particular proportionality (→ Art. 5 para. 2 Cst.) and the prohibition of arbitrariness (→ Art. 9 Cst.). Uhlmann points out that federal competence to regulate fighting dogs was «rightly denied», «since the core issue is the private (not private economic) keeping of dogs» (Uhlmann, BSK BV, Art. 95 No. 15).
No. 7 Para. 2 obliges the Confederation to create a unified Swiss economic area. This provision concretises the principle of economic freedom of movement within Switzerland. It comprises two components: the general internal market guarantee (sentence 1) and the specific guarantee of professional freedom of movement (sentence 2).
No. 8 The guarantee of mutual recognition of educational qualifications refers to academic training as well as federal, cantonal or cantonally recognised qualifications. The Federal Supreme Court clarified in BGE 130 I 26 that this guarantee does not apply absolutely and can be restricted by overriding public interests.
No. 9 The detailed requirements in para. 3 are addressed exclusively to «Swiss public limited companies listed in Switzerland or abroad». The constitutional text contains mandatory substantive requirements for the remuneration and election of members of governing bodies as well as a criminal law mandate.
No. 10 The formulation as «principles» does not mean, according to Uhlmann, that the legislature has wide discretion. Rather, these are «very detailed requirements», whereby «the absolute validity and non-balanceability of a constitutional provision is not to be assumed lightly» (Uhlmann, BSK BV, Art. 95 No. 25).
No. 11 Para. 1 results in comprehensive legislative competence of the Confederation with subsequently derogatory effect. If the Confederation enacts provisions based on Art. 95 para. 1 Cst., contrary cantonal law automatically ceases to apply. This was confirmed by the Federal Supreme Court in the context of the Medical Professions Act (judgment 2C_236/2020 consid. 2.3).
No. 12 Para. 2 establishes an obligation for the Confederation to act («it ensures») and a subjective right to practice a profession throughout the country for holders of the mentioned qualifications. Cantonal restrictions on admission are only permissible insofar as they are justified by overriding public interests and are proportionate.
No. 13 The requirements in para. 3 are directly applicable and oblige the legislature to implement them verbatim. According to the materials, the Federal Council has decided on «an implementation of the initiative that is 'as literal as possible'» (cited in Uhlmann, BSK BV, Art. 95 No. 53). In case of violation of the provisions, custodial sentences of up to three years are threatened.
No. 14Scope of federal competence: In legal doctrine, it is disputed how far federal competence according to para. 1 extends. While Häfelin/Haller/Keller/Thurnherr assume a «very comprehensive» competence (Bundesstaatsrecht, No. 1058), part of the doctrine advocates for a more restrictive interpretation taking into account cantonal competences.
No. 15Consultative vs. binding votes: In interpreting Art. 95 para. 3 lit. a, it was disputed whether the term «vote» also allows consultative votes. The Federal Council decided on «annual and binding votes», which was criticised by Forstmoser, who advocated for more flexibility (Forstmoser, SJZ 108/2012, 345).
No. 16Compatibility with international law: Vogt argues that the mandatory company law requirements in para. 3 could lead to conflicts with international company law (Vogt, Aktionärsdemokratie, 287). In contrast, Böckli and Häusermann emphasise the necessity of internationally compatible implementation (Böckli, Aktienrecht, § 13 No. 665; Häusermann, SJZ 108/2012, 541).
No. 17 When applying Art. 95 para. 1 Cst., it must be examined whether private economic activity is involved. Purely private activities without an earning character do not fall under this. The distinction can be difficult in individual cases, for example with non-profit organisations with ancillary economic activity.
No. 18 For professional mobility according to para. 2, early clarification of the recognition question is recommended. The Federal Act on the Internal Market (FAIM) concretises the constitutional requirements and creates procedural guarantees. In case of refusal of recognition, legal recourse is available.
No. 19 Listed companies must implement the requirements of para. 3 in their articles of association. The Ordinance against Excessive Compensation (OaEC) specifies the constitutional requirements. Violations are offences prosecuted ex officio. Practice shows that particularly the documentation of voting results and the correct structuring of employment contracts are error-prone (Oser/Müller, Praxiskommentar VegüV, Introduction No. 45).
BGE 138 I 378 (3 July 2012) of 3 July 2012
State enterprises may compete with private providers insofar as there is a formal statutory basis.
The judgment clarifies the limits of entrepreneurial state activity under Art. 94 para. 4 Const.
«Entrepreneurial activity by the state is compatible with the principle of economic freedom (Art. 94 para. 4 Const.) provided there is a formal statutory basis, the activity is in the public interest and proportionate, and the principle of competitive neutrality is preserved.»
BGE 125 I 276 (14 June 1999)
Cantons may regulate independent professional practice without this fundamentally violating economic freedom.
The decision concerns the prohibition of independent practice as a dental technician.
«Art. 31 Const. protects any commercial private economic activity aimed at generating profit or earned income [...], thus also commercial activity as a dental technician. However, Art. 31 para. 2 Const. reserves cantonal provisions on the exercise of trade and commerce.»
#Admission Restrictions and Professional Licensing
BGE 130 I 26 (27 November 2003)
Admission restrictions for medical personnel violate neither economic freedom nor the principle of a single economic area.
Landmark decision on the compatibility of needs clauses with the Federal Constitution.
«The restriction on the admission of service providers to practice at the expense of mandatory health insurance, issued by the Federal Council based on Art. 55a HIA and implemented by the Government Council of the Canton of Zurich, violates [...] neither the Agreement on the Free Movement of Persons [...] nor economic freedom [...], nor the obligation of mutual recognition of educational qualifications.»
Judgment 2C_236/2020 (28 August 2020)
The competence to regulate private economic activity under Art. 95 para. 1 Const. encompasses the entire law on medical professions.
The decision concerns the revocation of a license for independent practice as a dentist.
«The MedPA is based [...] on Art. 95 para. 1 Const., which grants the Confederation comprehensive legislative competence with subsequently derogatory effect regarding the exercise of private economic activity.»
BGE 130 II 87 (29 January 2004)
Registration in the cantonal bar register falls under economic freedom and Art. 95 para. 2 Const.
Fundamental decision on the significance of freedom of professional practice for legal professions.
«Legal practice in the monopoly area falls under the fundamental right of economic freedom; refusal of registration (due to lack of independence) affects this fundamental right, enabling review according to the standard of economic freedom and thus also its limitations.»
#Corporate Responsibility and Remuneration Provisions
BGE 132 III 564 (27 June 2006)
The liability of board members under the CO is not directly subject to Art. 95 para. 3 Const.
The decision addresses duties of care for companies in precarious situations.
«The duty of care of board members must be assessed according to objective criteria, whereby particular attention is required for companies in precarious financial situations.»
BGE 136 III 148 (7 December 2009)
Company law liability and set-off defenses in bankruptcy proceedings.
The judgment clarifies the enforcement of liability claims against board members.
«The defendant may set off claims in liability proceedings that it held against the bankrupt company at the time of the opening of bankruptcy.»
#Company Law Practice after Constitutional Revision
Judgment 4A_268/2018 (18 November 2019)
Company law liability in complex group structures.
The judgment addresses the application of duties of care in the Swissair grounding.
«Board members must fulfill their duty of care independently of external influences and cannot rely on instructions from third parties.»
Judgment 2C_277/2022 (3 July 2023)
License to provide swimming instruction and economic freedom.
The decision demonstrates the broad application of economic freedom to various professional activities.
«Economic freedom applies equally to natural and legal persons [...]. It protects private economic activity [...]; commercial activities are also covered.»
Judgment 2C_501/2016 (7 December 2016)
Condition for license for independent practice of complementary medicine.
The judgment concerns the regulation of alternative healing methods.
«The fundamental right of economic freedom protects any private economic activity aimed at generating profit or earned income. It includes in particular free access to private economic activity and its free exercise.»
Judgment 2C_1007/2022 (15 January 2025)
Equality between men and women and equal pay in public procurement.
The judgment shows the interconnection between equality law and economic freedom.
«The control of equal pay in public procurement affects the economic freedom of bidders, but is justified by the public interest in equality.»
Judgment 2C_102/2023 (18 September 2024)
Challenge to rent increases and state regulatory competences.
The decision concerns the limits of state intervention in rental prices.
«State interventions in price setting require a sufficient statutory basis and must be proportionate, even when they are socially motivated.»