In 1935, the Swiss Air Force developed a requirement for a replacement for Switzerland's Fokker C.V-E biplanes, which were used as reconnaissance aircraft, escort fighters and patrol aircraft. To meet this requirement, the Swiss Federal Constructions Works (EKW) proposed two designs, a modernised C.V, the EKW C-35 and an all new monoplane, the C-36.
Orders for 80 C-35s were placed in 1936, but no decision was made about whether to order the C-36, with preference being given to the purchase of foreign twin-engined aircraft for the role, attempts been made to buy Messerschmitt Bf 110s from Germany or Potez 63s from France. These attempts failed, however, and in 1938 approval was given for EKW to complete detailed design of the C-36 and to build a prototype.
The first prototype, the C-3601, carried out its maiden flight on 15 May 1939. It was a low-winged cantilever monoplane of all-metal construction. It was powered by a single licence-built Hispano-Suiza 12Y engine driving a three-bladed variable-pitch propeller. A crew of two sat in tandem under a long, continuous canopy. The aircraft was fitted with a twin tail, and had a fixed tailwheel undercarriage.
The C-3601 crashed on 20 August 1939 due to wing flutter, but a second prototype, the C-3602, which had a more powerful engine and a constant-speed propeller flew on 30 November that year. Testing was successful, and orders were placed in 1940 for an initial batch of 10 C-3603 with a retractable undercarriage.