Company Incorporation in Sweden - VAT, Taxes & Visas
Sweden has been officially neutral and at peace for the entire 20th century, which goes some way to explaining its prosperity and security today. With a stable economy that is strongly oriented towards foreign trade, it is a natural choice for international investors seeking new territorial markets. Sweden is also firmly committed to the welfare state and the high tax rates that are needed to fund it, so it is essential to take professional advice on tax planning and related issues.
Requirements for company formation in Sweden
- The minimum share capital is SEK 50,000.
- The board may consist of just one member, plus a deputy.
- Owner’s liability is limited to assets of the company.
- Client must have a summons representative if there is no intention to have a presence in Sweden.
- A Swedish company must have an Ordinary Board Member and Deputy Board Member - these cannot be the same person
- The client will be required to go to Sweden to set up bank account.
- The client must provide a copy of their passport which is Notary Certified
- The client must provide a statement showing their tax record.
- They must also provide a short business plan (business description & operations in Sweden, estimations of turnover, volume of payments, clear description of the ownership etc.)
- If the board consists of only, or the majority, of non-EEA citizens, special authorisation is needed.
What are the main types of company in Sweden?
The five most popular forms of corporate structure in Sweden are as follows:
- private limited company
- public limited company
- branch office of a foreign company
- sole trader
What are the main features of a private limited company?
- suitable for even the smallest company
- board may consist of just one member, plus a deputy
- minimum share capital is SEK 100,000 (€10,713)
- owner’s liability is limited to assets of the company
What are the main features of a public limited company?
- standard format for large companies
- minimum share capital is SEK 500,000 (€53,568)
- board of directors to have at least three members
- managing director and 50% of board must be resident in EEA
What are the reporting requirements for limited companies?
Irrespective of size and whether it is private or public, a limited company has to file annual accounts with the Patent and Registration Office. In addition, the annual report has to be audited.
What are the main features of a branch office?
A foreign company that wishes to operate in Sweden without establishing a subsidiary can set up a branch office instead. The branch must have a managing director who should be resident in an EEA country. The Swedish branch of a foreign company is taxed on its profits as if it was a Swedish limited company, but losses may be tax-deductible in the foreign company’s jurisdiction. All branches are required to file annual accounts and are subject to audit.
How do partnerships work?
There are two kinds of partnership under Swedish corporate law. A general partnership is a trading relationship between two or more people and, even though the partnership may be a legal entity in its own right, the partners are personally liable, joint and several. With a limited partnership, however, there is always at least one partner with limited liability, as well as one partner with unlimited liability for all debts.
What about sole traders?
A sole trader is a recognized form of business enterprise but does not comprise a legal entity. The business is run by a single individual who is personally liable for all debts that may be incurred. Annual accounts are required as an appendix to the owner’s personal tax return, but there is no audit requirement.
How easy is it to recruit staff in Sweden?
Sweden has the best-educated workforce in the world after the US and Canada, a factor that is widely cited by foreign companies in deciding whether to invest here. Unemployment has been rising in recent years and there should be no shortage of applicants for jobs. Recruitment agencies abound in Sweden and we have our own network of local recruitment specialists to help you.
What is the regulatory environment like?
There are few regulations governing foreign ownership or business operations and profits can be freely remitted abroad. The labour market is highly regulated, and subject to laws on employee contracts, working environment and corporate decision-making. It is essential to take legal advice before offering or entering into any kind of employment contract and we have expert legal advisors who can assist you with such issues.
Are there financial incentives available?
Interest-free loans may be available for investment in regional development zones. There are specific tax breaks for foreign companies that need to recruit specialist personnel from abroad, such as technical experts, researchers and top managers.
And what about banking facilities?
There is no shortage of international and local banks in Sweden and banking systems are highly advanced. However opening a bank account can be surprisingly difficult; Luckily, our banking contacts can assist you with this. One alternative to this can be to set up a Swedish Credit Union.
For more information about opening a bank account or company incorporation in Sweden, along with any other issues including VAT, taxes & visas, please contact us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.