Sweden
Company Formation
Sweden is known for its stable economy, innovative business environment and transparent legal system. It has a highly educated workforce and is a leader in industries such as technology, manufacturing and green energy.
As a member of the European Union, Sweden offers access to the EU single market, making it a prime location for companies looking to operate in Europe.
Sweden’s business-friendly environment, competitive corporate tax rate and strong infrastructure make it an attractive jurisdiction for both start-ups and established multinational companies.
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Why Sweden
- Sweden is an excellent jurisdiction for company formation, offering a business-friendly environment focused on innovation, transparency and access to European markets.
- With a corporate tax rate of 20.6% and access to the EU single market, it allows for the free movement of goods and services.
- Sweden’s holding company regime provides tax exemptions on dividends and capital gains from subsidiaries.
- Its transparent legal framework ensures strong investor protections and compliance with EU regulations.
- Sweden offers a highly skilled workforce, particularly in technology, engineering and green energy, along with strong infrastructure, including digital connectivity and an advanced financial sector.
- Start-ups benefit from government grants, innovation hubs and a highly developed start-up ecosystem, making Sweden a prime choice for forward-thinking businesses.
Key Contacts
Alexia Panzavecchia
Claire Marie Calleja Zammit
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Key Information Overview
 | Types of Companies | Private Limited Company (AB), Public Limited Company (Publikt AB), Branch |
 | Minimum Share Capital | AB: SEK 25,000, Publikt AB: SEK 500,000 |
 | Registered Office | Must have a registered office in Sweden |
 | Shareholders & Directors | At least 1 shareholder, 1 director (director can be non-resident) |
 | Bank Account | Must open a local Swedish bank account |
 | Tax Regime | 20.6% corporate tax |
 | Time to Complete Incorporation | 1-3 weeks |
 | Annual Maintenance Costs | Varies by company size; includes annual registration fees and compliance |
 | Audit Requirements | Mandatory for larger companies; exemptions for small companies |
 | Market Access | Access to the EU single market and Nordic region |
 | Key Benefits | Competitive corporate tax rate, strong legal framework |
 | Legal Framework | Based on civil law |
 | Physical Presence Requirements | Registered office required; physical presence not mandatory |
 | Corporate Governance Requirements | At least 1 director and company secretary recommended |
 | Language Requirements | Swedish and English |
 | Tax Residency Rules | Considered tax resident if managed and controlled from Sweden |
 | Required Documents | Memorandum & Articles of Association, ID proof, registered office address |
 | Compliance & Reporting | Annual returns, financial statements, VAT filings |
 | Employee and Payroll Requirements | Must comply with Swedish employment laws, including social security contributions |
Types of Companies
Sweden offers several types of corporate structures to suit different business needs, from start-ups to large multinational corporations.
01
Private Limited Company (AB)
- The most common company type in Sweden, suitable for small and medium-sized businesses.
- Minimum share capital requirement: SEK 25,000.
02
Public Limited Company (AB)
- Designed for larger businesses, particularly those looking to raise capital through public offerings.
- Minimum share capital requirement: SEK 500,000.
03
Branch of a Foreign Company
Allows foreign companies to establish a branch in Sweden and operate as an extension of the parent company.
04
Sole Trader (Enskild Firma)
Suitable for individuals running a small business independently. This structure does not provide limited liability protection.
05
Special Purpose Vehicles (SPVs)
Sweden is a solid choice for forming SPVs, particularly for financial transactions, investment vehicles and asset management, offering robust legal protections and a well-regulated business environment.
Holding Company
Sweden’s holding company regime offers tax exemptions on dividends and capital gains from qualifying subsidiaries, making it an ideal jurisdiction for managing international investments.
Securitisation Vehicle
SPVs in Sweden are commonly used for securitising financial assets, benefiting from the country’s well-regulated financial system and its compliance with EU standards.
Investment Funds (AIFs, UCITS)
Sweden is a recognised hub for Alternative Investment Funds (AIFs) and UCITS, with a strong regulatory framework that supports international fund management.
Real Estate Holding Company
Sweden’s legal framework allows for SPVs to hold real estate assets, providing tax advantages and legal protections for investors.
Start-Ups
Sweden is one of Europe’s most attractive countries for start-ups, particularly in sectors like technology, green energy and innovation. The country’s high quality of life, excellent infrastructure and strong government support for innovation make it a prime location for entrepreneurs.
Tax Incentives:
- Corporate Tax Rate: Sweden has a competitive corporate tax rate of 20.6%, providing an attractive environment for businesses.
- R&D Tax Incentives: Companies involved in research and development (R&D) activities can benefit from significant tax deductions.
Government Grants and Support:
- Vinnova Grants: Sweden’s innovation agency, Vinnova, offers financial support to innovative start-ups, particularly those focused on sustainable development and technology.
- Business Sweden Support: Sweden’s governmental agency provides support for businesses looking to expand internationally.
Business Support:
Incubators and Accelerators: Sweden has a strong ecosystem of incubators and accelerators, particularly in cities like Stockholm, Gothenburg and Malmö.
Access to Markets:
EU Membership: Sweden’s access to the EU single market allows start-ups to easily expand their operations across Europe.
Sustainability and Innovation:
Tech and Green Innovation Hub: Sweden is known for its leadership in sustainability and green technologies, making it an ideal location for start-ups focused on innovation.
A
Grade A: Highly Start-Up Friendly
Sweden provides a supportive environment for start-ups, especially in the technology and green energy sectors. With strong government support, access to EU markets and a vibrant start-up ecosystem, it is one of the most attractive destinations for entrepreneurs.
Benefits
Incorporating a company in Sweden offers several strategic advantages, particularly for businesses looking for access to the European market, a competitive tax regime and a well-regulated legal framework.
Favourable Tax Regime
Sweden’s corporate tax rate of 20.6% is competitive and the country’s holding company regime offers tax exemptions on dividends and capital gains from subsidiaries.
Access to EU Markets
As a member of the European Union, Sweden provides businesses with access to the EU single market, offering free movement of goods, services and capital.
Highly Skilled Workforce
Sweden has a highly educated and skilled workforce, particularly in sectors such as technology, engineering and sustainability.
Transparent Legal System
Sweden’s legal system is known for its transparency and compliance with EU regulations, providing strong protections for businesses and investors.
Strong Infrastructure
Sweden’s infrastructure is highly developed, with excellent digital connectivity, transportation networks and a strong financial sector.
Requirements
To establish a company in Sweden, several legal and administrative requirements must be fulfilled. The following are the basic requirements for incorporation.
01
Shareholders
A Private Limited Company (AB) requires a minimum of one shareholder, with no restrictions on nationality or residency.
02
Directors
At least one director is required for a Private Limited Company (AB). If no director is a resident of the European Economic Area (EEA), a resident representative must be appointed.
03
Company Secretary
There is no mandatory requirement for a company secretary, though many businesses choose to appoint one for administrative purposes.
04
Registered Office
Every company must have a registered office in Sweden, which will serve as the official address for legal correspondence.
05
Minimum Share Capital
The minimum share capital for Private Limited Companies (AB) is SEK 25,000, while Public Limited Companies (AB) require SEK 500,000.
06
Bank Account
A corporate bank account must be opened in Sweden to deposit the required share capital.
Mergers & Acquisitions
TAILORED SUPPORT to fast-track your market entry
Our Mergers & Acquisitions services are designed to assist clients in acquiring existing companies with pre-established licenses, streamlining the process of entering or expanding in key markets. These services are particularly relevant for investors seeking to fast-track their market entry while ensuring efficient and compliant solutions.
Identifying Suitable Businesses
We help clients locate companies that meet their specific goals, focusing on entities with strong operational histories and the required licenses.
Legal and Regulatory Assistance
Our experts guide clients through the unique legal and compliance frameworks of each market, ensuring a smooth acquisition process with minimal risk.
Valuation & Due Diligence
We conduct in-depth assessments of the target company’s financial and operational status, providing transparency and confidence in the acquisition.
Post-Acquisition Support
For clients who decide to divest, we offer comprehensive services to facilitate the sale of the company and transfer of licenses.
Frequently Asked Questions
What is the corporate tax rate in Sweden?
Sweden has a corporate tax rate of 20.6%, which is competitive within the EU.
Are there withholding taxes on dividends in Sweden?
Yes, Sweden applies a 30% withholding tax on dividends paid to non-residents, although this can be reduced through tax treaties or EU directives.
What legal structures are available for businesses in Sweden?
The most common structures are the Private Limited Company (Aktiebolag, or AB) and Public Limited Company (Publikt Aktiebolag).
Do Swedish companies need to appoint local directors?
No, Sweden does not require directors to be residents, but a local registered address is necessary.
Are audited financial statements required in Sweden?
Yes, most Swedish companies are required to file audited financial statements annually, except for small companies which may be exempt.
What is the VAT rate in Sweden?
The standard VAT rate is 25%, but reduced rates of 12% and 6% apply to specific categories of goods and services.
Does Sweden offer double taxation relief?
Yes, Sweden has an extensive network of double taxation treaties with more than 80 countries.
What is the process for setting up a company in Sweden?
Incorporation involves registering with the Swedish Companies Registration Office, drafting the Articles of Association and depositing the share capital.
Are there incentives for start-ups in Sweden?
Yes, Sweden offers various tax incentives and grants for start-ups, particularly those in the tech and innovation sectors.
How long does it take to incorporate a company in Sweden?
Company incorporation typically takes 1 to 3 weeks, depending on the complexity of the structure and the availability of required documents.
Need assistance?
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