Sweden company registration

Sweden company registration

DOING BUSINESS IN SWEDEN

Since 2003, Healy Consultants has assisted Clients with company registration in Sweden. Our services include i) Swedish business registration ii) business license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.

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  • Advantages and disadvantages

    Advantages of Sweden company registration

      Sweden business advantages and disadvantages - insights from experts
    1. Setting up a company in Sweden is easy because:

      • An AB company (LLC) can be incorporated in Sweden within 1 week, with a minimum of 1 shareholder and 1 director. Furthermore, the company can be 100% foreign-owned as the shareholders can be of any nationality and residence status;
      • The minimum paid up share capital is €5,620 and our Client will not be required to travel to complete the engagement;
      • Sweden’s company law does not require businesses to publicly disclose details of their shareholders and directors, thereby allowing investors greater privacy;

    2. Sweden offers an excellent business environment for young companies because:
      • Sweden is ranked as the 11th best country in the world for doing business, according to the Doing Business study by the World Bank. Also, the World Economic Forum ranked Sweden’s macroeconomic business environment as the 10th in the world in its 2014-15 Global Competitiveness Report;
      • Businesses with fewer than 50 employees investing in certain areas are eligible for either i) grants covering 35% of the costs of machinery, 25% of the office rent and 50% of the consulting or installation costs or ii) monetary subsidies up to €7,000 for training every new employee;
      • Sweden has a well-qualified labour force with i) a 99% literacy rate ii) a 97% computer literacy rate and iii) the 3rd highest number of individuals in Europe with university degrees;
      • The International Telecommunications Union ranks Sweden as the country with the 11th highest internet penetration rate in the world, with almost 92.5% of the people online. Consequently, businesses will find it easier to connect with local consumers through the web;
      • Resident companies employing highly skilled foreign workers will pay social security on only 75% of the employee’s taxable income;
      • Sweden’s 4 Free Trade Zones offer bonded warehouse facilities where goods can be stored for an unlimited period of time without customs clearance;
      • Swedish companies can carry forward their business losses for an indefinite period of time;
      • Although Sweden’s cost of electricity is higher in comparison with other European countries, its quality is still ranked as the 22nd best in the world in 2015 by the World Economic Forum. Sweden is also a world leader in waste reduction and producing green energy;
      • Sweden is positively ranked as the 4th least corrupt country in the world according to a 2014 Corruption Perceptions Index study by Transparency International.

    Disadvantages of Sweden company registration

    1. Operating a company in Sweden can be expensive for foreign entrepreneurs because:
      • Tax rates for both corporations and individuals are high in Sweden. The corporate tax rate is 22% and the personal income tax can be as high as 56%;
      • Sweden has the 23rd highest cost of living in the world. Entrepreneurs who move to Sweden to start a new company will face financial difficulties initially as early profits are eaten by taxes;
      • Sweden has the world’s 2nd highest VAT rate of 25%. This makes it an unattractive jurisdiction from which to carry out an international services business, as VAT on services is charged in the provider’s jurisdiction;
      • According to Eurostat, Sweden had the highest hourly labour costs in the EU in 2013;
      • All employers are required to contribute 31% social security contributions on each employee’s salary;
      • Sweden’s location in Scandinavia makes it inconvenient and expensive to ship goods to anywhere outside of Europe.

    2. Swedish company law requires the managing director and deputy managing director of all resident companies to live within the European Economic Area. If there are more directors on the board of a company in Sweden, 50% of them must live within the EEA. In addition, all directors living outside of Sweden must appoint an agent within the country to accept the service of proceedings against them.
    3. If our Clients require professional directors resident within the EEA to meet the requirements above, Healy Consultants will provide this service for an annual fee of €4,325 per director. Alternatively, Healy Consultants can apply on our Client’s behalf for an exemption to this requirement;
    4. Annual audited financial statements, including a complete tax return, must be submitted to the Companies Registration Office. Healy Consultants assists our Clients to fulfil this statutory obligation for an annual fee of €2,300;
    5. Collective bargaining is standard in nearly every industry in Sweden, with workers’ expectations in terms of benefits and work conditions higher than in other European countries.
  • Best uses for a Swedish company

    1. A Swedish holding company is an excellent way to book global profits while legally minimizing international tax because:
      • Dividend income from a company in the EU or EEA will be exempt from withholding tax if the Swedish company owns at least 10% stake in the foreign entity. Also, dividends from one Swedish-resident company to another are withholding tax-exempt;
      • Capital gains on shareholdings from a non-resident EU company will be withholding tax exempt if the Sweden resident company owns at least 10% stake in the foreign company under the Parent-Subsidiary Directive. Also, capital gains from one resident company to another are 100% tax exempt;
      • No withholding tax will be levied on interest payments and royalty payments paid to foreign entities by a Swedish business;
      • Sale of shares in a foreign subsidiary (and any gains thereon) are fully tax-exempt in Sweden;
      • Sweden boasts 80 international double tax treaties with countries including Australia, China, Canada, Singapore and the USA, minimising global withholding tax to as low as 0% if properly structured.

    2. Sweden is an excellent European distribution base because:
      • The World Economic Forum ranks Sweden’s infrastructure as the 22nd best in the world. The country boasts an excellent network of roads and railways, with the 24th most extensive network in the world. Consequently, all the cities in Sweden are connected by an efficient road and rail system;
      • Sweden’s location offers easy access to the wealthy Scandinavian market and the rest of Western Europe, reducing transportation costs to both areas;
      • Sweden has a high, quality low cost sea transport infrastructure led by the port facilities on the country’s extensive coast. This infrastructure is ranked by the World Economic Forum as being the 18th best in the world. This helps ease product distribution from Sweden to the rest of Europe.

Company registration

  • Time to incorporate: Two weeks
  • Cost to set up: €12,113
  • Minimum capital: €5,620
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 2
  • Company secretary: No
  • Resident director: Yes

Key facts

  • Corporate tax rate: 22%
  • Corporate tax base: Worldwide
  • Shelf companies: No
  • Main company type: AB Company

Frequently asked questions

Contact us

For additional information on our company registration services in Sweden, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Zhang Yi, directly:
client relationship officer - Zhang Yi