Where to Go Public: Switzerland or the U.S.? These 5 Aspects Are Crucial

The costs of going public in Switzerland are considerably lower than in the USA. The application charge, normally the biggest cost point in an Initial Public Offering, comes to roughly between 2% and 5% of the transaction proceeds, while in the USA it ranges between 4% and 7%. The costs for legal advice in the USA are also higher for a Swiss company, driven by higher fees for American lawyers and the complexity of the regulatory regime in the USA. For the Swiss stock exchange, the level of fees for listing and ongoing maintenance depends on the company’s market capitalization, whereas in the USA either a fixed fee applies or the number of shares is the determining factor. This difference can be considerable, particularly for smaller companies.

Furthermore, additional disclosure obligations as well as the establishment of internal compliance and reporting structures are significant factors.

It is often argued that US stock exchanges guarantee higher valuations. After discounting the distorting effect of the Magnificent 7 – tech giants such as Nvidia and Apple – and consider growth-adjusted data, the markets in the USA and Europe move almost in unison. There are some successful Swiss companies that are traded at a premium compared to their competitors abroad. These premiums can usually be ascribed to leading positions in attractive niche markets, strong brands, and high-value products or services. Ultimately, the valuation depends on the quality of the company, industry dynamics, and investor demand – not on the location of the listing. In comparing valuations on both exchanges, one must also consider that due to more restrictive marketing regulations, US banks often apply bigger price reductions prior to the IPO, which further shrinks the theoretical valuation advantage.

The supposed US advantage is also put into perspective when it comes to liquidity. In principle, liquidity, measured in trading volume, is greater on the US stock exchanges. This is especially true of US companies. In the case of foreign private issuers, however, the difference is smaller – they don’t benefit to the same degree from a liquidity boost through a US listing. A foreign private issuer is a non-governmental company that was founded outside the USA and conducting business in the USA. A non-American company can be either listed or private in its homeland. The SIX Swiss Exchange is also characterized by a comparatively narrow bid-ask spread – that is, a small difference between the highest buy order and the lowest sell order, a clear sign of the efficiency of the exchange. In the USA, foreign issuers typically have significantly wider bid-ask spreads than comparable US companies. 

The US market is bigger from a volume perspective, but many IPOs, particularly those of smaller companies, have been lost in the crowd. As a consequence, it is more challenging for a company listed in the USA to stand out, and accordingly the competition for capital is that much more intense.

A structural advantage of Switzerland is evident when it comes to index inclusion. Thanks to the comparatively more concentrated Swiss equities market, issuers have a significantly higher probability of early acceptance in recognized indices such as the SMI, SPI, SLI. This considerably increases visibility of and demand for companies among domestic and also international institutional investors, particularly against the backdrop of the growing importance of passive investment strategies and those that replicate benchmarks. However, in the USA benchmark indices such as the S&P 500, the Dow Jones, or the Russell indices are often limited to US-domiciled companies – foreign issuers aren’t typically considered there.

The common assumption that US-listed companies benefit from better analyst coverage is also put into perspective: Larger companies are, in practice, sufficiently covered on the SIX Swiss Exchange as well. For smaller foreign private issuers, the difference is minimal since with a US listing there’s no guarantee that they will receive significantly better attention from analysts: Their coverage is comparable with that of small- and mid-caps in Europe.

A current example is BioVersys (IPO February 2025), which deliberately decided on Switzerland in order to minimize costs and risks, and to take advantage of visibility in the domestic market

Access to an international pool of investors is available in both Switzerland and the USA. The US capital market is ranked the biggest and most liquid one in the world. The investor base is accordingly large and diverse. But Switzerland shouldn’t be underestimated in this regard, and offers access to both a well-capitalized pool of Swiss investors as well as many international investors who deliberately focus on exposure to the European market, geographic diversification, and one of the world’s most stable and trusted currencies. This includes many investors from the USA. Via a so-called Rule 144A offering, Swiss issuers can also approach targeted qualified institutional buyers (QIBs) in the USA – without a time-consuming registration with the Securities and Exchange Commission (SEC). This makes it possible to tap into US capital with having to accept the costs and complexity involved in a full US listing. In 2024, Swiss pension funds invested over 30% of their equity holdings in domestic stocks. This provides Swiss issuers with a loyal and long-term capital base that ensures stability in volatile times.

IPOs on US stock exchanges are subject to US securities laws and regulations, particularly the US Securities Act of 1933 and the US Securities Exchange Act of 1934. Prior to an IPO, the company must submit a registration statement with the SEC and provide potential investors with a prospectus in accordance with the Securities Act.  In the USA, Swiss companies are usually considered “foreign private issuers”, and are thus required to submit Form F-1 to the SEC in order to register. This is typically a lengthy process, during which many marketing activities are prohibited. Additionally, the SEC registration document typically provides a substantial number of notations that management must address. In Switzerland, the review of a prospectus in line with the Financial Services Act (FinSA) is limited to completeness, absence of inconsistencies, and clarity.

Furthermore, liability insurance costs for managers in the USA there are typically higher due to the greater risks in the USA of a lawsuit, which often involves a six-figure sum, and is something that companies now have to take into account as a budget item.  

The US may, in some circumstances, offer attractive valuations, liquidity, and openness to innovative business models. In recent years, this has led to a wide range of European companies going public in the US. Anyone wanting to go public – regardless of where – should make their decision strategically and weigh all the advantages and risks carefully.