Doing Business in Sweden – Guide

Doing Business in Sweden – Guide

Doing Business in Sweden rank 2016 and opportunities

Still better than 2015 got rank level 8 in the world (Germany 15, Finland 10). Sweden has a long-established tradition of expertise in engineering, ship- building, mining and the life sciences, making it a highly receptive market to new advanced technologies. There´s ongoing, strong demand for advanced technologies and products-services that improve productivity, including IT software and services that lower costs and improve business efficiencies, as well as equipment and services for safety-security, including cyber security. Sweden’s internet economy is growing more than ten percent annually and represents about eight percent of total GDP. Since Swedes are early adopters of new technologies, Sweden is considered to be an ideal test market. A rapid developments in smart grid, bio-energy, cyber security and e-health. English is widely spoken, and English is the language used for business agreements.

NEW-LOGO-doing-business-sweden-3littleSwedish Business Networking on B2BALTIC™

Since 2013 the LinkedIn group “Doing Business in Sweden” is available for smart B2B networkers. It is inside the known Nordic/Baltic business directory GROUPS4U with more than 14.000 professionals on LinkedIn. For registration to listing, certification and sales there is an application form available. There are also some “initiative groups on social medias”, for example: Buildings and houses for sale in Sweden can be added in Real Estate LinkedIn group Nordic/Baltic. IT & Tech Contents can be shared in the LinkedIn High-Tech group Nordic/Baltic. Retailers can also ask to join the group for Nordic/Baltic Retail. Luxury trading in Sweden find also collaboration B2B partners with LNH (Luxury Nordic Hub) and can use the luxury group to share specific initiatives about luxury world.

Stockholm is the most prolific billion-dollar Startup Hub behind Silicon-Valley

On a per capita basis, Stockholm is the second most prolific tech hub globally with 6.3 billion-dollars companies per million people (Silicon Valley is 6.9). Sweden made about over half of the 187 Mln. USD that startups across the Nordics attracted in 2014. But once deals such as the 350 Mln USD tipped into Germany StartUp Hub were stripped out, venture capital investments in Nordic startups were only a shade behind the 294 Mln invested in startups from Germany, Austria and Switzerland (area DACH).

Export Facilities, Research and Startups

B2BALTIC provides B2B users/members with professional import/export facilities, detailed market-research, startup hub housing and project funding opportunities in the cities of Stockholm, Goteborg, Malmo. “Self-service” facilities start for free. Trade assistance and business development starts from 500 EUR / year. Here the registration procedure.

Establishing a business in Sweden

A foreign company wishing to do business in Sweden may do so either through a Swedish subsidiary company or a branch office. There are no restrictions for foreign owners in Swedish companies. Corporations exist as non-trading partnerships (enkla bolag), trading partnerships (handelsbolag), limited partnerships (kommanditbolag) and limited liability companies (aktiebolag). The latter is the only corporate form with no personal liability in Sweden and is by far the predominant type of business organization. It is also the form most often used by foreign companies. There are two categories of limited liability companies (aktiebolag), private (privat) and public (publikt). The difference between the two categories is determined by the right to turn to the public for capital. Generally, no operating licenses are required to conduct business in Sweden. There are exceptions for specific areas such as insurance, banking and financial services though investors approved by other EU countries may benefit from mutual recognition of such licenses.

Simple procedures

Incorporating a limited liability company in Sweden is very simple for a foreign investor. An off-the-shelf company already fully organized and registered can be acquired for a nominal fee from law firms or consultant firms. The share capital must be at least SEK 50,000 (round 5000 EUR) in a private limited liability company and SEK 500,000 in a public limited liability company.

Exchange control regulations

Sweden has no specific exchange control regulations affecting ordinary commercial transactions of companies doing business in Sweden. There are no specific legal regulations regarding, for example, the right to open currency accounts and keep balances in foreign currencies at Swedish banks.

Taxation regulations

A Swedish limited liability company has to pay Swedish income tax (28 percent) on its worldwide income. From July 2003, capital gains on the sale of subsidiaries are tax-exempt. In addition, dividends paid by foreign subsidiaries to their parent company in Sweden are not taxed in Sweden if certain criteria are met. Sweden has comprehensive tax treaties for the avoidance of double taxation with most countries.

Tax or mandatory contribution Payments (number) Notes on Payments Time (hours) Statutory tax rate Tax base Total tax rate (% of profit) Notes on TTR
Payroll tax 1 online 36 31.42% gross salaries 35.44
Corporate income tax 1 online 50 22% taxable profits 13.07
Real estate tax 0 online and jointly 0.5% assessed property value 0.56
Environmental tax 1 SKr 435 ton of waste 0.05
Vehicle tax 1 SKr 3,600 fixed fee 0.02
Employee paid – Labor tax 0 online and jointly 7% gross salaries 0.00 withheld
Value added tax (VAT) 1 online 36 25% value added 0.00 not included
Fuel tax 1 SKr 6.19 per liter 0.00 small amount
Totals: 6.00 122.00 49.1%

Financial incentives

Employers established in the north of Sweden are allowed a partial reduction of the social security fees payable. There are also grants linked to investments in fixed or intangible assets and to hiring, training and educating personnel. Finally, there are tax reductions available for foreign key personnel. Sweden offers no other tax incentives such as free-trade zones, tax incentives for R&D expenses or lower tax rates for retained earnings for either domestic or foreign investors. Foreign branches A foreign company wishing to establish a business in Sweden without actually starting a Swedish company may also conduct its operations through a Swedish branch (filial). Such a branch may be established without permission from the Swedish authorities. The only requirement is that the branch is entered in the Register of Branches kept by Bolagsverket (Swedish Companies Registration Office). A branch of a foreign company is taxed on the profits of the branch as though it was a Swedish limited liability company.

From worldwide Happiness Report 2015

Sweden is rich, satisfied and hasn´t lost self-confidence despite the European recession.