Sweden

Sweden

The Nordic economies are among the countries in the Western World with the best macro-economic performance in the past ten years. Sweden is in the top 10 largest economies in the world, with a high level of purchasing power.

As the largest market in Scandinavia, Sweden is the ideal location for centralised construction operations in Northern Europe. With a population of approx. 10 million, Sweden is filled with opportunities for SMEs and large companies. Sweden has a world-class infrastructure, highly skilled workforce, low level of corruption and a friendly business culture.

Sweden is one of the world’s biggest beneficiaries of foreign investment and it is no surprise that it is a country of innovative companies such as Volvo, Ericsson, Astra Zeneca, Ikea, and Sandvik – all of whom have started in Sweden.

Sweden joined the European Union in 1995. As part of the Union, Sweden provides access to a market of 28 countries and 510 million consumers.

Political stability and well-performing econony

Sweden’s strong public finances, sound banking system, political stability and well-performing economy make it a robust place to run a business. Sweden also boasts excellent infrastructure through extensive public investments, with the government allocating SEK 522 billion (€56 billion) for infrastructure projects over the next decade.

It is also one of the top countries in the world in terms of R&D investments, in relation to GDP. Swedish companies benefit from working closely with research institutes for new materials, and with industry in order to develop products for them.

Company in Sweden

If you want to establish a company in Sweden, there are several options.

  • AB company (Aktiebolag). This corresponds to a private limited company. Here, a share capital of at least SEK 25,000 is required. There are special rules for so-called “limited liability companies” with a limited number of owners.
  • Branch of an EU or UK company This requires separate Swedish bookkeeping and registration with the Swedish Companies Registration Office.
  • If you live in Sweden as a private individual, you can also establish a sole proprietorship.

Moderate taxes

Sweden has a reputation for being a country with high taxes, however, this applies more to taxes on individuals and is certainly not correct when it comes to companies. The corporation tax for Swedish companies is 22%, which in international comparison is moderate. Corporate taxation is often even lower if you have the opportunity to move the profit out of the operating company.

  • Corporation tax is 22% of the company’s profits
  • The VAT rate is 25% (reduced to 12% and 6% for some services and goods). If your company sells goods or services subject to VAT in Sweden, it must be registered for VAT. Your company, on the other hand, is not liable for VAT if the company only deals with sales to other companies (B2B).

Dividends and capital gains

In 2004, Sweden adopted new rules on dividends and capital gains received by Swedish holding companies. In most cases, dividends and capital gains are tax-free. This must be seen in combination with the fact that Sweden is an EU country with an extensive network of double taxation agreements, sparse capitalisation rules and no withholding tax on interest. This has made Sweden one of the most attractive EU jurisdictions for holding companies, even for smaller companies.

Capital gains are generally taxed as ordinary income, however, capital gains relating to qualified shareholdings i.e. shares held for “business purposes”, are tax-exempt under the rules on participation exemption. Dividends received by a Swedish business entity are normally exempt from tax under the participation exemption rules.

7 facts about Sweden

  1. Sweden has a high standard of living
  2. They have one of the highest life expectancies in the world
  3. Sweden has a comprehensive social welfare system paid for through one of the highest taxes in the world
  4. The Swedes have good access to education and are highly educated
  5. A highly developed country and there is an ever-increasing need for knowledge and investment in research
  6. The largest economic resources come from fisheries, timber, high quality ore extraction, hydropower, and tourism.
  7. Main export goods are electrical and telecommunications equipment, machinery, oil, cars, paper, pharmaceuticals, food, textiles, footwear, iron, and steel.

Read more about Sweden on Wikipedia.

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