Establishing a company in Sweden
Setting up a business
Setting up business in the Stockholm region is a smooth and rapid process. A new company can be fully functional within a few days. According to a World Bank comparison of 145 countries in 2005, Sweden is one of the world's top 10 economies in terms of ease of doing business. The survey includes the following indicators: starting a business, hiring and firing workers, enforcing contracts, getting credit, closing a business, registering property and protecting investors.
Sweden's taxation structure is straightforward and corporate tax levels are among the lowest in Europe. The country applies participation exemption, allows full deduction for interest and has no thin capitalisation rules.
The legal system strikes a good balance between demands for security, reliability, transparency and cost-efficiency. Standardised contracts and documentation are often used, and simple procedures for mortgaging and title registration apply. The quality of management and advisory services is high and business procedures run smoothly.
Advantages of setting up business in Stockholm
- Simple, fast and inexpensive
- Access to highly qualified workers
- Close cooperation between business and universities and scientific institutions
- Corporate tax 28%, holding company tax haven
- Stockholm is the financial centre of Northern Europe
- Leading information society
- Gateway to the Russian and Baltic market
Registering a company
Incorporating a limited liability company (the legal form chosen by the vast majority of foreign investors) in Sweden is straightforward. The application is filed at the Swedish Company Registration Office, Bolagsverket, and is usually drawn up with the help of a lawyer. It takes an average of one to two weeks following Bolagsverket's receipt of the application for the company to be established. Another option is to buy an off-the-shelf company, already fully organised and registered, from a law firm or specialist consultancy.
Discover the cost-efficiency of setting up in Stockholm
In a report from 2004, the World Bank describes Sweden as one of the world's least regulated countries. The macroeconomic environment in the Stockholm region is so favourable that it has been ranked the best in the world by the World Economic Forum.
Labour costs
Salary levels are competitive. In a newly completed comparison of a "basket" of salaries within the ICT sector, Swedish telecom and IT engineers were about 40% cheaper than their counterparts in Japan and earned 24% less than those in the US.
Social contribution costs are comparable to those elsewhere in Europe. They consist of employers' contributions and the employees' contribution, which takes the form of a general pension fee.
Costs for manufacturing labour show an even more competitive pattern, with Swedish salary rates second lowest among 10 European nations.
Sweden also scores well in regard to other business costs. Rents for industrial and office space are relatively low. The Swedish financial sector and other business suppliers are recognised for offering advanced services that make strong contributions to internal efficiency.
Infrastructure costs
Sweden is attractive from an infrastructure cost perspective, ranking third and fourth, respectively, in a 2004 global benchmarking study of international phone and electricity costs.
Low corporate taxation
In Sweden, corporate income tax of 28% is lower than in most other EU countries. Possibilities to defer taxation of profit effectively lower the rate of taxation even more (the marginal tax rate can be as low as 12%).
Corporate taxation is so low that international tax consultants say Sweden now offers the best environment in Europe for holding companies. No taxes are levied on dividends, and share sales are exempt from capital gains tax. There are no thin capitalisation rules - interest paid is a tax-deductible cost. These advantages are linked to an extensive global network of double taxation treaties.
Tax relief for foreign key personnel
Foreign key personnel - executives, experts, researchers, and others - may qualify for special tax relief when working in Sweden. The legislation provides an additional advantage to companies that require foreign expertise for their Swedish operations.
Hiring local staff
Foreign companies can enlist the help of several agencies to find suitable staff at all levels of their business, whether on temporary or permanent contracts.
All unemployed Swedes are registered at the local state employment centre (Arbetsformedlingen) and companies can advertise there free of charge.
Vacant premises
SBR works closely with regional municipalities, real estate owners and brokers, which means that you may be presented with several location alternatives to suit your needs in different parts of the region. It is also easy to find companies that specialise in finding suitable premises.
Financial incentives
In Sweden, and the Stockholm region, financial incentives - grants, loans, credit guarantees, etc - are available to help companies establish a business and to expand. Sweden does not, however, have a wide range of financial incentives linked to national grants and loans.
