A branch in Sweden allows a foreign company to establish its presence and engage in the same business activities as the head office. It is an alternative to registering a subsidiary, and although subject to certain limitations, it will allow the foreign company to have its own local office in Sweden.
The branch is not subject to the same steps as those needed to open a company in Sweden, however, it will be registered with the Swedish Companies Registration Office and the parent company will be asked to provide a number of documents upon incorporation.
Foreign companies interested in opening their Swedish branch in 2023 can reach out to our team of company formation experts as soon as the company’s Board decides to expand the activities through this type of establishment.
The branch is subject to the Swedish laws.
Best used for
- financial institutions,
- companies that wish to extend and fully control their operations in Sweden
Minimum share capital
Time frame for the incorporation (approx.)
Legal representative required
Yes, a local managing director
Local bank account
Independence from the parent company
Liability of the parent company
Full liability for the debts and obligations of its Swedish branch
Corporate tax rate
Possibility of hiring local staff
Read below a number of questions about how to open a branch in Sweden and reach out to our company formation agents if you need more details of if you need ongoing assistance throughout the entire process.
What are the main features of the branch?
Perhaps the most important issue concerning the branch that investors need to be aware of is the fact that the branch is not an independent legal entity from its parent company abroad.
- Liability: the parent company abroad is fully liable for the debts and obligations of its Swedish branch;
- Governing law: when a foreign company decides to open a branch in Sweden, this counterpart will be subject to Swedish laws and the regulatory principles appliable to the types of activities it engages in the country;
- Representative: the branch will have an appointed representative in Sweden; this will be mentioned in the documentation submitted for registration;
- Accounting: although it is part of the foreign company, the accounts of the Swedish branch will be kept separate from those of the parent company and will reflect its business activities in Sweden.
Companies that choose to open a branch in Sweden will not need to submit a minimum share capital, as would be the case for a subsidiary, for example.
What are the branch registration requirements in Sweden in 2023?
Any new branch of a foreign company in Sweden is registered with the Companies Registration Office (Bolagsverket). This means that the foreign company will need to submit a formal application that will contain a set of mandatory documents. These include the following:
- the foreign company’s registration certificate;
- its Articles of Association;
- the financial statements for the last two years and proof that the foreign company is not subject to bankruptcy;
- copies of the identification documents for the branch’s appointed director;
- the filled in application form and proof of bank registration fee payment.
Once the company is registered, it will receive a corporate identity number which contains ten digits. This will be used to identify the branch and for communicating with the Swedish authorities.
In addition to the registration with the Companies Registration Office, bank branches in Sweden, as well as those of other financial institutions, are also registered with the Financial Supervisory Authority.
Our team of company formation agents in Sweden can fully assist investors during this procedure. With our help, you will make sure that the documents are submitted according to the requirements set forth by the Companies Registration Office.
We also invite you to watch a video about branch registration in Sweden:
What are the mandatory requirements for the branch?
When a company chooses to open a branch in Sweden, it will mandatorily appoint a managing director. He is required to reside in the European Economic Area and, if this is not the case, the branch will apply for an exemption from the residency requirements.
The branch’s managing director is empowered to act behalf of the foreign company through a power of attorney. The original and the copy of this document is also submitted when registering the branch.
The branch in Sweden will mandatorily have an address in Sweden. The name of the branch will include a word that will clearly indicate its status, “filial”. In case of bank branches, the name will also include the word “bank”.
The branch will be registered as an employer in Sweden, as well as for tax purposes.
Different requirements for registration apply, depending on the chosen business form. Investors who wish to open a company in Sweden, whether as a branch, or as a limited liability company, can rely on our assistance for complete information about the registration with the tax authorities and the Companies Registration Office. We also offer services for other business forms.
How is the branch in Sweden taxed?
The branch is not a locally registered business, however, it is still subject to taxation in the country. The following tax rates are of interest to investors in Sweden and are applicable in 2023:
- 20.6% branch corporate income tax rate;
- 30% withholding tax on dividend distributions from Swedish companies;
- standard 25% value-added tax and 0%,6%,12% reduced rates for certain types of products and services.
As far as the filing and payment requirements in place for Swedish entities are concerned, we remind investors that in Sweden there are four different dates on which the annual corporate income tax return is submitted. This depends on the end date of the company’s financial year. For example, when the year ends between 31 January and 30 April, the return is rue on 1 December (in case of electronic returns), the same year in which the financial year was concluded.
Payroll in Sweden is not in place as a tax, like it might be in other jurisdictions, however, employers will still need to make the majority of the social security contributions for their employees. Their value can differ (in some cases, according to the age of the employee). Working with our team is useful for investors who wish to better understand their tax requirements.
Contact us if you wish to know more about how to open a branch in Sweden in 2023. Alternatively, our team can help you open a locally registered company, as well as assist you if you are interested in other company formation matters.
Call us now at +46 70 419 44 36to set up an appointment with our lawyer in Stockholm, Sweden. Alternatively you can incorporate your company without traveling to Sweden.
As a VS Jurist 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.