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Articles
Set up Company in Sweden
Updated on Friday 17th February 2023
Company formation in Sweden is performed on the basis of some rather standard actions and includes drafting the articles of association, the passport copies, the specimen signatures and other forms obtained from the company registration office.
In addition to the pre- and post-registration steps, certain conditions are mandatory for lawfully running a business. For example, a registered office is necessary for company registration in Sweden, as well as a bank account and hiring a local accountant for the newly established company in Sweden.
| Quick Facts | |
|---|---|
| Types of companies |
Limited company (LTD) Trading partnership Sole trader Association |
|
Minimum share capital for LTD Company |
SEK 25,000 |
|
Minimum number of shareholders for Limited Company |
1 |
| Time frame for the incorporation (approx.) |
1 week |
| Corporate tax rate |
20.6% |
| Dividend tax rate |
- 0% in case of resident companies; - 0% or 30% in case of non-resdident companies, depending on whether a tax treaty is available |
| VAT rate |
25% standard rate 0%; 6%; 12% reduced rates |
| Number of double taxation treaties (approx.) | > 100 |
| Do you supply a registered address? | Yes |
| Local director required | At least a representative registered with the population register. Exemptions can apply. |
| Annual meeting required | Yes |
| Electronic signature | Yes |
| Is accounting/annual return required? | Yes |
| Foreign-ownership allowed | Yes |
| Any tax exemptions available? | Capital gains exemption on gains from a business sale of shares. Conditions apply. |
| Tax incentives |
R&D tax relief for labour costs. Subject to conditions. |
Foreign citizens who wish to register a company in Sweden are expected to follow the same process, however, different rules can apply depending on their country of origin.
Our team of incorporation agents has experience working with local and foreign investors alike and can assist you if you plan to open a company in Sweden. Asking for adequate help and advice before starting the incorporation phase can be essential, especially for understanding the types of companies that are available, the actual registration, the taxation principles and the conditions for obtaining the coordination number – a mandatory step for foreign entrepreneurs.
Types of business entities in Sweden
Investors can open several types of business forms in Sweden, with the registration, liability and taxes depending on the chosen form. If you are interested in company registration in Sweden, choosing the business type is the first step. Our agents list the main business forms below for those who want to register a company in Sweden, together with a short description for investors. For more information, as well as assistance in deciding the suitable form, you can reach out to our specialists. We can offer more details on the different requirements for each type as well as the level of personal responsibility.
-
Limited company: the preferred business form, it offers a convenient degree of liability (limited to the invested capital) and it is suitable for small and medium-sized companies alike; it can engage in any business field and requires a capital of at least 25,000 SEK or approximately 2,473 Euros;
-
Trading partnership: can be incorporated by at least two individuals or two legal entities; they will do business together and the partners will be jointly and severally liable for the debts incurred by the business; unlike in the case of the limited company, there is no need to have a minimum capital invested upon incorporation;
-
Limited partnership: an alternative to the trading partnership, in this type of business only one partner is fully liable while the other has limited liability; at least 1 SEK is needed to open this partnership and our team can give you more details.
-
Sole trader: small entrepreneurs who open a company in Sweden will often opt for this very simple business form; it is suited for professionals who start a business on their own, however, they are fully liable for the debts and obligations.
-
Associations: the economic, non=profit or community association is set up in order to promote the interests of its members; our team can give you more details so that you may decide if this is an advantageous manner to do business.
Foreign investors who want to open a company in Sweden can ask our lawyers for detailed information and assistance. We offer legal services to businessmen who open companies in other European countries, such as France, Estonia etc. We provide incorporation services for opening firms in many European countries, such as Italy or Germany.
Steps required to register a company in Sweden
The investors who want to register a company in Sweden must check the desired name at the Swedish Companies Registration Office before using it in elaborating the company’s documents. If it’s unique, the founders must proceed with opening a bank account for depositing the minimum capital before registering a company.
When all the above procedures are done and the articles of association are drafted, the entrepreneur can proceed with the incorporation process by registration with the Swedish Companies Registration Office entity which will deliver a registration certificate. The registration can be performed in person or online through an application developed by the Swedish Companies Registration Office.
After issuing the registration certificate, an announcement regarding the setting up of the new company is made in the Swedish Official Gazette. The registration at the tax authorities can be performed at the same time using the online application, or in person at the Tax authorities. Not more than two months can pass before the Swedish Tax authorities is notified regarding the newly formed company.
In summary, the following steps are essential when opening a limited liability company:
- Register with the Swedish Companies Registration Office;
- Register with the Swedish Tax Agency;
- Apply for F-tax and VAT registration and also apply for registration as an employer, as needed;
- Apply for other permits, depending on the business field in which the company will activate.
Investors who set up a company in Sweden are expected to obtain permits for activities such as:
- · Agriculture, forestry and fishing;
- · Energy and extraction;
- · Environment and waste;
- · Healthcare, social services;
- · Finance and insurance;
- · Media and communication;
- · Retail and warehouse;
- · School and education;
- · Gambling and events;
- · Traffic, transport and tourism.
The steps for opening a company differ for other business forms, for example the sole trader. Investors who are interested in company formation in Sweden under this business form should know that they will need to register for F- tax. This is particular to the sole trader as the company is identified using the owner’s personal identity number (because there is no clear separation between the two, as in other cases). The F-tax, or the F-skatt (from företagare – entrepreneur) is issued to sole traders to indicate the fact that they engage in renumerated activities as an entrepreneur and not as an employee, and thus all the tax administration requirements fall onto the individual acting as sole trader (as opposed to the employer, as would be the case when the individual was employed).
For more details, please reach out to our agents who can help you open a company in Sweden.
In case you need other types of services in Sweden, for example immigration services, we can put you in contact with our team of experts.
In case you need other types of services in Sweden, for example immigration services, we can put you in contact with our team of experts.
Taxation in Sweden
Our team offers complete services related to company formation in Sweden, which also include tax compliance services. We can provide complete information on how your chosen business form is taxed, your reporting obligations and what you will need to do as a first-time investor in the country.
The main types of taxes are summarized below by our team:
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- Corporate income tax: 20.6% applicable on the company’s profit; there is no surtax or alternative minimum tax;
-
- Withholding tax: 0% for dividends, interest and royalties payments; there is no withholding tax on the dividends paid to residents;
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- Value-added tax: the standard rate is 25% unless the goods or services are exempt or zero-rated or subject to the 6% or 12% rate;
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- Social security contributions: aggregate contributions in amount of 31.42% in certain cases; those made by self-employed individuals amount to 28.97%.
Investors who are interested in company registration in Sweden should also know that there is no capital duty, no worth tax and no estate tax. The country has signed more than 100 income tax treaties.
There is no payroll in Sweden, however, as mentioned above, each employer will have to pay a certain amount in social security contributions. Working with a local team of accounting experts will mean that your company is up to date with these payments, and also that the company is compliant with the timelines for paying its employees. You can reach out to us for more information about employment-related contributions.
Our team can give you more details about the taxation regime, as well as other relevant tax regulations, as imposed by the Swedish Tax Agency, a Government agency.
Economy overview in Sweden
Sweden’s economy is one of the top economies in Europe. Foreign trade plays an important role for the country. Germany is the main partner when it comes to imports in Sweden. Still, the Netherlands, Luxembourg and the UK are the main investors in Sweden.
Foreign investments who start companies in Sweden contribute to the gross domestic product of this country, with almost a third of the total GDP. The World Bank actually considers Sweden to be the third nation in the world in terms of friendliness and connection with international markets.
The main fields that help the improvement of the economy in Sweden are based on forestry, iron, steel, precision equipment, mining, agriculture and motor vehicles. However, many foreign investments starting companies in Sweden go to pharmaceuticals and chemicals sectors. While European countries have a tendency to increase the rate of investments in Sweden, the United States reduced its investments in Sweden during the past period of time.
Company registration in Sweden is a simplified process with our help. Contact us if you need more information about the general steps for opening a company or if you wish to know more about the company formation services we provide.
Meet us in Stockholm
Call us now at +46 70 419 44 36 to set up an appointment with our lawyers in Stockholm, Sweden. Alternatively you can incorporate your company without traveling to Sweden.
As a BridgeWest client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Sweden.
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