Sweden-Private


A military power during the 17th century, Sweden has not participated in any war for almost two centuries. An armed neutrality was preserved in both World Wars. Sweden's long-successful economic formula of a capitalist system interlarded with substantial welfare elements was challenged in the 1990s by high unemployment and in 2000-02 and 2009 by the global economic downturns, but fiscal discipline over the past several years has allowed the country to weather economic vagaries. Sweden joined the EU in 1995, but the public rejected the introduction of the euro in a 2003 referendum.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

25 930 USD

25 930 USD

26 430 USD

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Contact method: and / or

Core Services

The cost for incorporation of the company (AB) in Sweden including the corporate legal service for the second year is 24 350 USD (19 450 EUR):

21 400 EUR

— Incorporation of AB in Sweden

including the preparation of basic set of documents for registration, registration of board of directors and accountant(s) incl. registration office fees, entries in the share register, first sending of corporate documents, including Compliance fee

8 030 EUR

— Corporate legal services per year

including: registered address, one nominee board member and one nominee deputy director, Bank Account, Correspondence with the Tax Agency and the Companies Registration Office, Documented board meetings and general meetings, Other corporate matters, NOT including Compliance fee

500 EUR

— Apostilled set of Statutory documents

Basic set of documents

  • Memorandum of Association

    It includes details of how much is to be paid for each share, company name, information about the members of the Board of Directors, Deputies, Auditors
  • Articles of Association

    It includes company name, address of the registered office, object of business, share capital, company's structure
  • Power of Attorney

    It is issued to perform the registration procedure by legal representative

Optional services

Annual accounting service

(including: opening up and administering of the company’s bank account, invoicing and payments, current recording of transactions and financial administration, current reports of profit/loss and balance, annual reports, annual accounts and periodic reports, tax returns (incl. Value Added Tax) and income-tax returns)

Related services

125 USD

Scanning and sending the documents via e-mail to Russia from the registered office in Sweden

(if it exceeds basic minimum)

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

250 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

350 USD

For client with high risk Status

Cost of incorporation, including first year servicing 25930
Cost of annual service, starting from the second year 9730
Open account in 26837
Incorporation timescale for a turnkey company 5 weeks
Country 26747

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
450.295 sq. km 9.103.788 (2011) Stockholm 7.5% (2011) 4
Location Northern Europe
National currency Swedish krona
Conditional reduction of currency SEK
Against USD 0.14
Climate, average max and min t° Temperate in south with cold, cloudy winters and cool, partly cloudy summers; subarctic in north; avg. maximum temperature (July) +25°; avg. minimum temperature (January) -22°
Time difference from Moscow - 2 hours
Dialing code +46
State language Swedish
Ethnic groups Swedes with Finnish and Sami minorities; Finns, Yugoslavs, Danes, Norwegians, Greeks, Turks
Literacy rate 99%
Credit rating AAA
Government type Constitutional monarchy
Executive branch Cabinet appointed by the Prime Minister
Legislative branch unicameral Parliament or Riksdag (349 seats; members are elected by popular vote on a proportional representation basis to serve four-year terms)
Judicial branch Supreme Court or Hogsta Domstolen (judges are appointed by the prime minister and the cabinet)
GDP per capita rank 21 (2011)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
Yes сivil law 5 weeks No Yes
Types of entity Private and Public Limited Company (aktiebolag - AB), branch of a foreign entity, partnership and sole proprietorship
Incorporation timescale for a new company 4 weeks
Company suffix "aktiebolag", the abbreviation "AB"
Sensitive words misleading or offensive names
Local registered agent Yes
Information to be kept at the registered office No requirements
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted within EU

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
2 (Director + Deputy Director) Yes (at least half must be residents of EEA) No Yes Yes
Directors’ meetings/frequency/location Yes / annually / no requirements
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Meetings/frequency/location Yes / annually / no requirements
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
6000 EUR 6000 EUR 6000 EUR Before incorporation No
Standard currency SEK
Standard authorized share capital 50000
Standard par value of shares 1
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
20,6% Regular rate 25% 30%/0%/20,6% No
Personal tax 20-52%
Corporate tax (in detail) The income tax rate is 20.6%
VAT. Details The standard VAT rate is 25%. Reduced rates of 12% and 6% apply to some goods and services
Other taxes Social contributions, Property tax, Commercial property tax
Government fee No
Stamp duty For real estate transactions - 4.25%

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes Yes No Yes No
Requirement to prepare accounts Yes
Double tax treaties network 82
Tax Exchange Information Agreement network 47
OECD member Yes
Offshore/onshore status according to the RF laws No

GENERAL INFORMATION

General Info

The Kingdom of Sweden is located in Northern Europe. The total area of the country is 450,295 sq. km, with a population of 9,103,788 (2011). The capital of Sweden is Stockholm, which is also the largest city of the country. The national currency is Swedish krona (SEK) which equals approximately 0.14 USD and 0.12 EUR.
The climate of Sweden is temperate in south with cold, cloudy winters and cool, partly cloudy summers. In north of the country the climate is subarctic. The average maximum temperature in July is +25°C; the average minimum temperature in January is -22°C.
The time difference from Moscow is -2 hours; the international dialing code – 46.
The official language of the country is Swedish. The Swedish population includes the following ethnic groups: Swedes with Finnish and Sami minorities; and foreign-born or first-generation immigrants: Finns, Yugoslavs, Danes, Norwegians, Greeks, Turks. The literacy level of population is 99 %.

History

A military power during the 17th century, Sweden has not participated in any war for almost two centuries. Armed neutrality was preserved in both World Wars. Sweden's long-successful economic formula of a capitalist system interlarded with substantial welfare elements was challenged in the 1990s by high unemployment and in 2000 – 2002 and 2009 by the global economic downturns, but fiscal discipline over the past several years has allowed the country to weather economic vagaries. Sweden joined the EU in 1995, but the public rejected the introduction of the euro in a 2003 referendum.

Government Type

The Kingdom of Sweden is a constitutional monarchy with a parliamentary democracy form of government. The Chief of the State is a King. The Head of the Government in Sweden is a Prime Minister.
The main executive authority is Cabinet appointed by the Prime Minister. The representative of the legislative authorities is unicameral Parliament – Rikstag that includes 349 seats. The members of the Swedish Parliament are elected by popular vote on a proportional representation basis to serve four-year terms.
The highest of the judicial authorities of Sweden are the Supreme Court – Hongsta Domstolen (highest court of general jurisdiction), and the Supreme Administrative court (highest administrative court).

Economy

Sweden is one of the most progressive countries in the world. The economy of Sweden is heavily oriented toward exporting of goods. Nowadays the most essential features of Swedish economy are: a modern distribution system, excellent internal and external communications, and a highly skilled labor force. Due to the stability of economy Sweden has achieved a high standard of living.
Timber, hydropower, and iron ore constitute the resource base of an economy the Kingdom of Sweden.
Agriculture accounts for 1% of GDP. The vast majority of industrial output is provided by the privately owned firms, of which the engineering sector accounts for about 50% of output and exports.
The recession of Swedish economy was observed since the end of 2008 on account of the global economic processes which reduced export demand and consumptions. Nevertheless, in 2011 Sweden took the send place at the rating of the most competitive economies of the world.
It is noteworthy that the Swedish Central Bank, founded in 1668, is the oldest Central Bank in the world. GDP per capita rank of Sweden is 21 (est. 2011). The unemployment rank is 7.5% (est. 2011).

CORPORATE INFORMATION

Legal System

The legal system of Sweden is referred to Continental law. Nevertheless, in the established Swedish legal system there are evident features of the Scandinavian-German Civil law.
The legal system of Scandinavian countries developed in its own original way. In the 13th century the first written legal acts appeared.
There are also the features of Roman law in the Swedish legal system which were adopted in the 17th century. Due to that Swedish legal system was brought together with the law of Continental Europe.
The historical base for Swedish legal system was also the Old German law.
The noticeable event happened In 1734 when the Code of laws of Sweden (Sveriges rikes lag) was adopted. It was composed of nine sections divided by the object of regulation and included 1300 paragraphs: marriage, parents and children, inheritance, real estate, construction, trade, crimes, execution of judicial decisions, legal procedure, judicial system.
The distinctive features of the Swedish legal system:
  • absence of Codes systematized the separate branches of law;
  • in spite of the fact that the law is the basic source of law, the court practice plays more important role than in the countries of Continental Europe, due to the higher level of judges’ independence in the interpretation of rules of law;
  • cooperation of Scandinavian countries in the sphere of law, the process of unification of Scandinavian law.

Types of Entity

Legal Swedish Company Forms are:
  • Limited Liability Company (Ltd) – separate legal entity that can enter into contacts, risk is limited to invested capital;
  • Private Company – not a separate legal entity, but an individual conducting business, no accountant requirements or capital adequacy, unlimited risk;
  • Partnerships – separate legal identity, no accountant requirements or capital adequacy. Unlimited risk and must have at least two part owners;
  • Limited Partnerships – variant of partnership in which one partner if fully liable while others may limit the liability to capital invested.

A Limited Liability Company (Aktiebolag) is the structure that is often used when setting up business activities in Sweden. Investors can purchase a Limited Liability Company off-the-shelf or form the company themselves.
Usually there are no problems to change company form. In the majority of cases the enterprises are transformed from a Private Company, or Partnership into a Limited Liability Company.
A Limited Liability Company is a legal entity that can enter into contracts and own property. It can also be a party in legal proceedings.
After the registration LLC gets its registration number composed of ten digits which serves as its identification number and remains as long as it exists.
The advantage of the Limited Liability Company in Sweden is that it provides the best financial protection for a private person. There is a clear dividing line between the business enterprise and its owners.
The influence of the Shareholders in a Limited Liability Company is in relation to their shares.
It is also one of the most favorable forms from the point of view of taxation. A Limited Liability Company may have a split financial year, which can facilitate financial planning with regard of taxes, credits, salaries and interest.
There are two forms of Limited Liability Company in Sweden:
  • Private Limited Liability Company (Private LLC);
  • Public Limited Liability Company (Public LLC).

Private Limited Liability Company

The vast majority of international companies choose to set up a Private Limited Liability Company. Private LLC cannot offer its shares to the public on the stock exchange or any other organized market.
Minimum share capital is 50,000 SEK (approx. 6,110 EUR).
The Board of Directors of a Private Limited Liability Company must have at least one Director + one Deputy Director. If there are three Directors or more, it is not necessary to appoint a Deputy Director. The number of Directors and Deputy Directors must be stated in the Articles of Association (Bolagsordning).

Private LLC vs. Public LLC

Private LLC Public LLC
Company name AB AB (publ.)
Purpose Suitable for even the smallest companies Standard format for large companies
Minimum Share Capital The minimum share capital required is 50,000 SEK (approx. 6,110 EUR) The minimum share capital required is 500,000 SEK (approx. 61,100 EUR)
Shares The shares cannot be sold on the stock market; cannot be offered to public The shares can be issued on the stock market; can be offered to public
Board of Directors one Director plus one Deputy Director At least three members; optional amount of Deputy members
Chairman of the Board Can be appointed if the Board consists of more than one member Compulsory
Managing Director Optional (may be the same person as Chairman of the Board) Compulsory (not the same person as Chairman of the Board)

REGISTRATION

Registration of LLC in Sweden

There are several stages of registration of a Private Limited Liability Company in Sweden:
  • set of document preparation;
  • opening of bank account and payment of the initial amount for the shares;
  • registration with the Swedish Companies Registration Office;
  • F-tax registration with the Swedish Tax Agency;
  • VAT registration with the Swedish Tax Agency (if required);
  • registration as an employer.

A Limited Liability Company must be registered with the Swedish Companies Registration Office. A Limited Liability Company only becomes a legal person when it has been registered with the Swedish Companies Registration Office. Registration provides nationwide protection of the company name.
When starting a Limited Liability Company, you will need to apply for F-tax and VAT registration and register as an employer.

Registration with the Swedish Companies Registration Office

First of all, it is necessary to fill the Application form for registration to the Swedish Companies Registration Office (Bolagsverket) to form your Private LLC in Sweden with the enclosed set of documents. The document must be in Swedish.
Thereby to form your LLC in Sweden the following documents are required:
  • Application form for registration (Registreringsanmalan);
  • passport copies (certified true copies);
  • specimen signatures;
  • bank reference/recommendation letter;
  • utility bill to confirm residency;
  • Articles of Association (Bolagsordning);
  • Memorandum of Association (Stiftelseurkund);
  • Protocol of Distribution of Shares (Protokoll fran konstituerande bolagsstamma);
  • written statement from the bank assuring that the initial amount for the shares has been paid (Bankintyg);
  • Power of Attorney (Fullmakt): in the case of Company registration by a legal representative.

The registration procedure of a Company can be performed by a legal representative appointed by Power of Attorney without visit of the Client to Sweden.
In the case when a non-resident company be the Shareholder of the Company to be incorporated it is also required:
  • Certificate of Incorporation (certified true copy by the Companies House or by a Lawyer or Public Notary using his/her seal or stamp);
  • Articles of Incorporation (certified true copy by the Companies House or by a Lawyer or Public Notary using his/her seal or stamp indicating clearly the current ultimate Beneficial owner/s and/or Shareholder/s and Director/s of the company);
  • Certificate of Good Standing;
  • Share Register to be signed by the Company Secretary confirming the Shareholder/s of the Company and the share certificates in respect of each Shareholder;
  • Bank reference (recommendation) letter for the Company.

All documents are to be provided in the original or as copies duly authenticated and certified by a Lawyer or a Public Notary using his/her seal or stamp.

Memorandum of Association
The founders draw up and sign a Memorandum of Association. Only the founders are permitted to subscribe to the shares. Private LLC may not offer its shares to the public.
The Memorandum of Association must contain the following information:
  • details of how much is to be paid for each share;
  • company name;
  • name, personal ID number, and postal address of each Board member, deputy and Auditor.

The company is formed when the Memorandum of Association has been signed by all founders; however the Limited Liability Company becomes a legal entity on the date on which it is registered at the Swedish Companies Registration Office.

Articles of Association
The Articles of Association of Private LLC must contain the following information:
  • company name;
  • location in Sweden of the registered office of the company;
  • object of business;
  • share capital;
  • number of shares;
  • number of Board members;
  • number of deputy Board members;
  • number of Auditors;
  • how the general Shareholder’s meetings will be convened;
  • financial year.

Registration with the Swedish Tax Agency

After the registration with the Swedish Companies Registration Office it is necessary to register with the Swedish Tax Agency (Skatteverket) before starting a business:
  • F-tax registration;
  • VAT registration (if required);
  • registration as an employer.

The registration procedure of a Company can be performed by a legal representative appointed by Power of Attorney.
Swedish Tax Agency is responsible for administration of taxes in Sweden. All physical and legal persons have their own tax account at the Swedish Tax Agency where all tax payments are recorded.
F-tax Certificate
Starting a business, it is necessary to apply to the Swedish Tax Agency for an F-tax certificate which signifies that you are an entrepreneur who is responsible for paying your own taxes and contributions. When clients engage you they are sure that they will not be liable for your taxes and contributions.
In the cases when taxes are not declared or paid the F-certificate may be withdrawn by the Swedish Tax Agency.
The fact that the Limited Liability Company has F-tax certificate should be indicated in different types of business documents. In practice, there is usually the note on company’s invoices – “F-tax certificate holder”.
VAT registration
VAT is paid by natural or legal persons selling goods or services which are subject to VAT in Sweden.
Registration as an Employer
Having registered as an employer, the Company pays the employer contribution. The Swedish Tax Agency issues a registration certificate; it also automatically sends the documents for reporting and paying employer contributions and deduct tax for employees.
There are two forms of employment in Sweden:
  • indefinite employment: it is the permanent employment;
  • temporary employment: it is an employment for some period of time.

Employment is always indefinite unless otherwise agreed. It means that if the employment is temporary it must be clear from a written employment contract.

Shelf Companies

The easiest and most common way to set up a Private LLC in Sweden is to use a “shelf company”. It gives quick access to a new, pre-registered LLC that has not previously traded or been engaged in commercial activity.
There are several stages of purchasing of a shelf company in Sweden:
  • conclusion of Share Purchase Agreement;
  • transferring of share capital to a bank Account specially opened for the Company;
  • changing of the Article of Association to reflect the nature of the business: decision should be made at an extraordinary General Meeting;
  • appointment of a new Board of Directors and Chairman of the Board of Directors and Managing Director (where applicable);
  • changing of company name;
  • registration of changes with the Swedish Companies Registration Office (Bolagsverket).

Company Name

The company name of Private LLC is registered with the Swedish Companies Registration Office to ensure it will not be taken by another business.
Certain rules are applied for company name:
  • it must not be similar to any other registered company name or trademark;
  • it must not be misleading;
  • it must do more than merely describe the business activity.

All company names must include the Swedish word for Limited Liability Company – "aktiebolag", or its abbreviated form, "AB".
The registered business name of a Private LLC in Sweden is protected throughout the country.
The possibility of using one or another company name can be checked at the website of the Swedish Companies Registration Office. You can get an approval or rejection in a day.
It is possible to use such words as “Group”, “Financial”, “International”, “Limited”, and “Ltd.” in the company name.

Business Documents

In most cases there are no formal requirements regarding the design and layout of business documents.
Written Agreements
Agreements may be concluded verbally or in written form. Some agreements, such as property transfers and collective agreements have to be in writing.
In practice, many agreements are concluded verbally. However, a written agreement reduces the risk of the parties interpreting the content of the agreement differently.
Special Requirements for LLC
There are special requirements regarding the content of a LLC's business documents and website. They should provide with the following information:
  • full company name as it appears on the Certificate of Incorporation;
  • seat of the board as laid down in the Articles of Association;
  • corporate identification number.

Local Registered Office

In Sweden it is required to have a local registered office for the companies. Thereby, LLC must have its legal address in Sweden.

Seal

There are no requirements for Swedish companies concerning the Seal.

Redomicile

The redomiciliation of companies is permissible to all countries within European Union.

COMPANY STRUCTURE

Directors

The minimum number of Directors in Swedish Private LLC is one plus one deputy.
Corporate Directors are not permissible. There are publicly accessible records of Directors in Sweden and information is also disclosed to local agent. The minimum number Meetings of Directors is one meeting in a year.
A Limited Liability Company is formed by one or more founders, who must meet certain qualification requirements.
A founder must be:
  • a person resident in the European Economic Area (“EEA”), or;
  • a Swedish legal entity, or;
  • a legal entity established in the EEA having its seat and head office or its main activities in the EEA.

The Managing Director of a Swedish Limited Liability Company must be resident in the EEA. However, the Registration Office may grant an exemption from this requirement.
If none of the representatives of the company is resident in Sweden, the Board of Directors shall appoint a person resident in Sweden authorised to accept service on behalf of the company.
A majority of the Directors, and the Managing Director, must be resident in the EEA, unless an exception is granted by the Registration Office.

Board of Directors

The Board of Directors is in charge of the organization and management of the company.
The Board of Directors is in charge of:
  • convening of the General Meeting of Shareholders;
  • ensuring that taxes are paid in due time;
  • preparing and filing annual accounts with Swedish Companies Registration Office;
  • reporting any changes in the company;
  • appointment of the Managing Director (if required);
  • appointment of the Chairman of the Board of Directors (if the Board comprises more than one member): he leads the work of the Board and ensures that the Board performs its duties.

Power to Sign
The Board convenes the General Meeting of Shareholders and decides who is authorized to represent the Company, i.e. power to sign. If no individual is registered as having power to sign, the Board is entitled to sign on the Company’s behalf, more than half of the Board members must sign jointly.

Secretary

There are no requirements for Sweden Companies concerning the Secretary. The appointment of a company Secretary is optional.

Shareholders

The minimum number of Shareholders in Sweden companies is one. It is an advantage that there are residency requirements for Shareholders. Shareholders may reside in any country. Corporate Shareholders are permissible. There are publicly accessible records of Shareholders; the information is also disclosed to local agent. The minimum number of meetings of Shareholders is one meeting in a year.
The Board of Directors must draw up a Share Register and a List of Shareholders. The Share Register is a public document and must be kept available to the public at the Company’s Office.
There are no restrictions on the number, or the nationality, of Shareholders.

Beneficiary

It is important fact that there are no publicly accessible records of Beneficiary in Sweden.

Shares and Share Capital

The standard currency of Shares and Share capital of the Company is Swedish krona. The minimum authorized share capital for Private Limited Liability Company is 50,000 SEK (approx. 6,110 EUR); the minimum issued share capital is 50,000 SEK (approx. 6,110 EUR); the standard minimum paid up capital is 50,000 SEK (approx. 6,110 EUR). Apart from that, the owners have no personal responsibility for the company’s debts or other obligations, but there are certain exemptions. The Board of Directors and the Managing Director have extensive responsibility and in certain cases these persons can become personally liable for the company’s debts.
Standard par value of shares is 1 SEK (approx. 0.12 EUR). Shares with no par value and bearer shares are not permitted.

Public Access to Information

Swedish Companies Registration Office must announce the registration entries of new Companies in the Swedish Official Gazette (Post-och Inrikes Tidningar).
Information from Swedish Companies Registration Office
On the website of the Swedish Companies Registration Office you may search for and obtain the latest information on more than one million Swedish enterprises. The information may be paid by card and will be delivered by e-mail in a few minutes.
The accessible information:
  • Annual Report;
  • Articles of Association;
  • Certificate of Registration in Swedish or English.

Information from Swedish Trade and Industry Register
On payment of a fee, at the public database of the Trade and Industry Register it is possible to obtain the following information:
  • corporate mortgage on the business, if any;
  • who has been on the Board through the years;
  • certificates of different kinds;
  • copies of documents (Minutes of the annual general meeting or of Board meetings);
  • applications filed with the Swedish Companies Registration Office by Company.

It is also possible to order the certificates of different kinds. The information obtained varies according to the certificate requested. Copies of documents such as minutes may also be ordered.
The fee may be paid in a bank to the Trade and Industry Register’s account.

TAXATION

Personal Income Tax

Tax residents generally pay tax on their worldwide income. Non-residents pay tax on income from sources in Sweden.
Employment income tax is levied at both national and municipal levels. The national tax rate is 20%, with exemption for the first SEK 523,200 of income. The average municipal tax rate is 32%.
Non-residents pay tax on employment income at the rate of 25%.
Gains from the sale of assets and current investment income (dividends, interest, and rental income) are taxed at the rate of 30%.
Gains from the sale of unlisted shares are taxed at the rate of 25%.
Profits from the sale of private real estate are taxed at the rate of 22%.

Corporate Income Tax

Swedish companies pay corporate income tax on their worldwide income, while foreign companies pay tax on income from sources in Sweden.
The corporate income tax rate is 20.6%.
Profits from the sale of business assets are usually tax exempt.
Unlisted shares of Swedish companies are generally considered a business asset. Listed shares can be considered a business asset if at least 10% of shares has been held for at least a year.
The exemption, in general, also applies to shares of a foreign company equivalent to a Swedish limited liability company.
Dividends on shares treated as a business asset are not taxed. The exemption does not apply to dividends deducted for corporate income tax purposes at the distributing company.

CFC Rules

A foreign company is considered a controlled foreign company if a resident holds, directly or indirectly, individually or jointly with related parties, at least 25% of its capital or voting rights, and if such company is taxed at a low rate (lower than 11.33%, i.e. less than 55% of the Swedish corporate income tax rate).
CFC rules may not apply to whitelisted companies, but there are restrictions on the types of income to which the exemption can be applied.
CFC rules may not apply to active EEA companies.

Withholding Tax

Dividends paid are taxed at the rate of 30%.
Royalties are considered a business income generated through a permanent establishment in Sweden and are subject to corporate income tax at the rate of 20.6%.
Interest payments are exempt from withholding tax.
The tax may be withheld on certain other income payments.
Tax rates can be reduced under double tax treaties and EU directives.

VAT

The standard VAT rate is 25%.
Some goods and services are subject to the reduced VAT rates of 12% and 6%.

Social Security Contributions

Employers pay social security contributions at a general rate of 31.42% of the employee's remuneration. Employers also pay 24.26% tax on premiums to professional pension funds.
Employees pay a pension contribution at the rate of 7% of the remuneration up to SEK 550,400, however, this payment is credited against income tax, i.e. effectively, the employee's contribution is usually nil.

Property Tax

Property owners pay 0.75% tax on the taxable value of their residential property, but not more than SEK 8,437. No tax is levied on overseas property.

Commercial Property Tax

The tax is usually paid at the rate of 1%.
For industrial property, the tax rate is 0.5%.

Stamp Duty

Real estate transactions are subject to 4.25% stamp duty.

Exchange Control

Sweden has no exchange control.

ACCOUNTS

Accounts

Regardless of the type of Company and scope of the business the Company's transactions must all be accounted for in accordance with the Swedish Accounting Act (Bokföringslagen).
Accounting is a system of organization and processing of a Company's financial transactions; it involves saving receipts, invoices and other documents.
A Company's accounts normally consist of:
  • day book;
  • general ledger;
  • annual report and other financial accounts.

The accounts form the basis for taxation of the Company’s business operations, as they provide with the information for Company’s income tax return.
Annual Accounts
According to the Swedish legal acts it is compulsory to prepare and file the Annual Return for Limited Liability Companies. Annual Return is to be filed with the Swedish Companies Registration Office within seven months of the end of the financial year. Failure to submit accounts in time results in a fine. If the annual accounts and audit report have not been filed 11 months after the end of the financial year, the Swedish Companies Registration Office may liquidate the Company.
Documents to be filed annually:
  • Annual Return – including balance sheet, income statement, Directors’ report, additional notes to the Directors’ report and financial statements. Large companies must also submit a cash flow statement;
  • audit report, when relevant;
  • minutes of the general meeting of Shareholders, if the meeting has adopted a dividend payment resolution (profit distribution);
  • consolidated accounts and audit report for the majority of parent companies, if the Company is part of a group.

All documents must be in Swedish.
Annual Report must be signed by all Board members and, where applicable, the Managing Director.
Annual Return
LLC must prepare and file the Annual Return with the Swedish Companies Registration Office. Annual Return is a public document.
Annual Return includes:
  • profit and loss account: it must show correct details of income and expenditure for the financial year;
  • balance sheet: it is a summary of the Company's wealth, assets, liabilities and equity at the balance sheet date;
  • Directors’ report;
  • additional notes to the Directors’ report;
  • financial statements.

Limited companies must always engage an approved or authorised public accountant to serve as Auditor, and are required to prepare an annual report which is submitted to the Swedish Companies' Registration Office. However, small companies may choose not to have an Auditor.

Audit

The role of the Auditor is to ensure that the Company’s management complies with the Companies Act and Articles of Association.
Only a certified accountant and public accounting firms registered by the Supervisory Board of Public Accountants (Revisors Namnden) may audit Limited Liability Companies.
A Limited Liability Company needs to have an Auditor if it meets at least two of the following criteria, for each and every one of the two most recent financial years:
  • average of more than 3 employees;
  • balance sheet total exceeding 1.5 million SEK (approx. 179,800 EUR);
  • annual net sales exceeding 3 million SEK (approx. 360,000 EUR).

A Limited Liability Company must appoint a qualified Auditor who has passed professional competence examinations if the Company meets one or more of the following criteria:
  • average of more than 50 employees in past two years;
  • balance sheet total exceeding 40 million SEK (approx. 4,795,000 EUR) in past two years;
  • annual net sales exceeding 80 million SEK (approx. 960,000 EUR);
  • listed on the stock exchange.

Financial Year

The financial year of a Limited Liability Company covers 12 months. The first financial year begins on the day the Company is registered.
The Company’s financial year is stated in the Articles of Association.
It is permissible to have a financial year of less than 12 months or to extend the financial year to a maximum of 18 months.

Tax Returns

The tax year of a company is its financial year if it does not exceed 12 months.
The filing deadline for the annual corporate income tax return depends on the end-date of the financial year.
The financial year of most companies coincides with the calendar year, and the return must be filed before 1 July of the year following the reporting one.
The tax is paid on the basis of tax assessments issued by the tax authorities.
Monthly advance tax payments are made throughout the year, with final payment due within 90 days of the date of the tax assessment.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
Yes сivil law 82 Yes No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Companies Act (Aktiebolagslag) Limited Liability Companies
Companies Ordinance (Aktiebolagsförordning) Limited Liability Companies
Annual Accounts Act (Årsredovisningslag) accounts
Accounting Act (Bokföringslag) accounts
Ordinance concerning the Annual Reports and Budget Documentation accounts
Bookkeeping Ordinance (Förordning om myndigheters bokföring) bookkeeping
Competition Act (Konkurrenslag) competition
Value Added Tax Act (Mervärdesskattelag) VAT
Income Tax Act (Inkomstskattelag) income tax
Dividend Withholding Tax Act (Kupongskattelag) dividends
Act on Social Security Contributions (Lag om socialavgifter) social contributions
Act on Wage Tax on Earned Income (Lag om löneskatt på förvärvsinkomster) wage tax
Tax Payment Act (Skattebetalningslag) taxation
Money Laundering and Terrorist Financing (Prevention) Act money laundering prevention
Tax treaties entered Albania, Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Egypt, Estonia, Former Yugoslav Republic of Macedonia, France Gambia, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kenya, Korea (Republic of), Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Montenegro, Namibia, Netherlands, New Zealand, Nigeria, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Switzerland, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, United States, Vanuatu, Venezuela, Viet nam, Zambia, Zimbabwe
Tax Exchange Information Agreement (TEIA) Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Belize, Bermuda, Brunei Darussalam, Cayman Islands, Cook Islands, Costa Rica, Curaçao, Denmark, Dominica, Faroe Islands, Finland, Gibraltar, Greenland, Grenada, Guatemala, Hong Kong, Iceland, Isle of Man, Jersey, Liberia, Liechtenstein, Macao (China), Marshall Islands, Monaco, Montserrat, Niue, Norway, Panama, Qatar, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Seychelles, Sint Maarten, Turks and Caicos Islands, United Arab Emirates, Uruguay, Vanuatu, Virgin Islands (British)
List of state regulatory authorities
Swedish Companies Registration Office http://bolagsverket.se
Swedish Tax Agenc http://www.skatteverket.se
Ministry of Finance http://www.sweden.gov.se/sb/d/2062
Swedish Financial Supervisory Authority http://www.fi.se
Supervisory Board of Public Accountants http://revisorsnamnden.se
Central Bank http://www.riksbank.se/en
Patent and Registration Office http://www.prv.se/en
Swedish Competition Authority http://www.kkv.se
Swedish Courts http://www.domstol.se

    Legal Partner of Review:

    Siguiente Capital AB (publ.)

    Since 1981 company executives have been active as consultants and investors, continuously creating a set of connections which spans over three continents and links to a great source of corporate contacts and advanced expertise. Siguiente Capital AB (publ.) can offer a wide range of Swedish corporate services to clients from all over the world; all the support to manage Swedish Holding Company in an efficient and effective way.

    www.siguientecap.com

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