Specificity of Company Registration in Sweden
To operate in trade field, people more often choose the Limited Partnership, than LLC (Limited Liability Company). The Swedish limited partnership is known for its variability and clarity of the tax system.
The whole package of services is offered
At least 2 partners to avail: 1 partner with limited liability, with possible offshore entities and 1 person – with general liability
No need for personal visit
No requirements to authorized capital. This capital shall be formed on deposits, and its size shall be specified by participants themselves
The local corporate tax is not used where all profit is distributed among partners in the offshore jurisdiction
The local LP is a partnership with 2 types of partners: with general and limited liability, and these two types of partnerships allow the possibility of being a natural person and legal entity, which is very convenient.
The general partner manages the company and divides the profit gained by the enterprise in previously specified shares and at the same time bears full responsibility for all debts of the company.
Partners with limited liability, as well as shareholders, are solely responsible. They cannot manage the partnership and bear responsibility only for the company debts (at least 10 Euro or 100 SEK) as part of their personal contribution.
Such partnerships are often registered as a trading company with the potential possibility to get the local VAT number. However, this applies to those only where one partners is a Swedish resident. Such partnership is allowed opening bank accounts outside the country (we offer bank accounts in Cyprus, Latvia and Denmark. Local accounts with banking institutions are available to those companies only that trade within Sweden).
It is normally rated at 26.3%. For companies described above, it may be excluded where the partners operate exclusively outside the territory of the state.
In the situation where the profit was transferred from resident firms and in situations where it is possible to use the “tax exemption”:
in case of a subsidiary in the status of a tax resident in the country where the corporate tax rate approximates to that in Sweden
in case where ownership shares is at least 25%, the rate is 0%
In cases when “tax exemption” cannot be applied, the tax rate equals to 26.3%.
Capital gain tax
Capital gains on sale of shares are often subject to corporate tax rated at 26.3%. Tax exemptions may also be used under conditions above.
There is no tax on interest payments.
Royalty tax is not normally withheld. However, there is a possibility that under royalties can consider the profit received by the permanent representation, and therefore can be taxed 26.3%.
A standard rate of 30% can be potentially reduced as per the special double taxation agreement or any EU directive. Dividends paid by a local holding company may be exempt from tax, where all conditions of the requirements are met:
The main company is taxed on profit rated at 15.4%
All shares are held in the company as business assets
The parent company has share of at least 25% of the Swedish firm
VAT or Value added tax
The normal rate for trading operations in Sweden is 25%.
There is the double taxation agreement signed with 80 states.