Company Registration in Sweden
Establishing a business in Sweden is quite a complicated and lengthy procedure, and company registration in Sweden is the easiest part of it. What a lot of service providers in Sweden do is have a stock of ready-made companies made in advance to speed things up. With a ready-made company, the process takes 5-10 working days to change company owners. Otherwise, it’s a much longer and more complicated procedure due to needing a temporary bank account for the share capital for company registration in Sweden.
An AB company in Sweden needs to meet the following requirements before applying for the necessary taxes:
Share capital – 25 000SEK (approx., 2 258EUR, which is a bit less than the Estonian share capital). Has to be paid in immediately, unlike in Estonia.
Minimum 3 board members, and if none of the board lives in Sweden, then a contact person must be appointed.
A bank account for the share capital – this is the tricky part, as the banks in Sweden only open accounts for local residents. This is the main reason why we recommend using ready-made companies as a work-around. Share capital is usually registered with a bank certificate. Upon transfer of ownership, the new owners have 1 fiscal year to open a new account and deposit the share capital again.
A legal address for the company.
The standard stuff – AoA, Founding Act, 3 possible company names
The UBO of the company has to be registered and entered into the database within 4 weeks after company ownership changes, otherwise it won’t be possible to continue.
Alternatively, clients can choose to register a Branch in Sweden.
A branch is an existing foreign company that is simply added to the Swedish business register. Very useful for companies that do limited business in Sweden on a short basis. Takes 5-10 days. A managing director of the branch has to be appointed, and if he’s not a resident of Sweden, then a contact person will need to be added to the company. A legal address is also required.
This is the complicated part of getting an operational business running in Sweden. Companies have to apply for various different taxes depending on their business activity.
At the bare minimum, most companies have to apply from the very start to the following taxes: F-tax. This is what’s called “A Swedish company tax approval”. VAT. All Swedish companies need to have a VAT number from the start. Employer’s registration – payroll registration, essentially.
There are a large number of various taxes required in Sweden, which is why service providers usually ask first to have a paid consultation to estimate which taxes will be needed and to draw a road-map for getting a company in Sweden running.
Corporate Income Tax
Corporate income tax is 20,6% and is prepaid monthly based on predicted annual profits. You have to tell the tax office what your planned annual income is and pay your tax based on their calculations. Stating you don’t plan to make income this year is not allowed.
Value Added Tax
Pensions, health insurance, parental insurance, work incapacity insurance, etc. It’s 31,5%
None for locals. For foreign companies and non-residents, it’s 30%.
Personal Income Tax
Progressive, starting at 28%. Can easily go over 50%
On average, the various taxes are what take up most of the time to get a company running in Sweden. Without those taxes in place, a company can’t be operational and start generating a profit. The only thing a company can do without the taxes is set up business contracts with whatever Swedish companies the client plans on cooperating with.
Currently, the waiting time for tax registration approvals is six months on average. Sometimes longer, depending on how busy the Swedish tax office is (usually always very busy).
A lot of business in Sweden is regulated by Worker Unions, so depending on what your business activity is, you’ll need to register with a Union and comply with their requirements. There’s a very long list of unions out there, and if you plan to hire local Swedes, it would be very useful to have union registration in hand.
So, with all that said, for which clients is Sweden a suitable jurisdiction?
Existing medium to big-sized companies.
This is the type of clients who bought a company in Sweden most frequently from me. These are companies that have been operating in Europe for a long time now and are looking to expand their services. Or they need a very highly educated workforce, which the Swedes genuinely are.
Construction is a big industry in Sweden, and a lot of Eastern European construction companies like to have a branch registered there for when they need to do work in Sweden.
Individual freelancers that just want to permanently relocate to Sweden
These types are rare, I’ve only ever had 2 of such cases, but they do exist. These are people that are very enthusiastic about Sweden in general, and usually operate as freelancers or as a very small company.
If you intend to start company registration in Sweden, please contact our specialists for more information.