Сompany registration in Sweden: Legal aspects and advice

Company registration is the process of formalizing the status of a legal entity in accordance with the laws of a certain country. During this process, the company is officially recognized as a legal entity with its own legal capacity.

To receive this status, it is necessary to provide certain documentation and fulfill the requirements established by the state authorities. Due to registration, the entity is able to conduct commercial activities, conclude contracts, participate in court proceedings and perform other legally significant actions.

If you plan to start a business in Europe, Sweden is an excellent choice for registering your company. The Manimama team has conducted in-depth research, analyzed the main subtleties of incorporating in Sweden, and is ready to share its results and help you choose the right jurisdiction.?

What are the main advantages of incorporating a company (business) in Sweden?

1. A stable economy and sound legal framework

Sweden offers a stable economic environment, which forms a solid foundation for successful business operations. Its transparent legal norms and clear regulatory requirements ensure fairness and predictability in business processes. This allows entrepreneurs to minimize risks and focus on growing their company rather than navigating legal or administrative obstacles.

2. Access to the EU market

As a member of the EU, Sweden provides direct access to one of the world’s largest markets. This opens up limitless opportunities for business expansion, partnership building, and sales growth. With the benefits of the single European market, companies in Sweden can freely export goods and services to other member states without unnecessary customs barriers.

3. Ease of the registration process and favorable tax climate

Thanks to efficient administrative procedures, registering a business in Sweden is fast and straightforward. The country also offers a competitive tax climate with transparent conditions for companies. This creates an attractive environment for starting and growing a business, encouraging foreign investors to establish their operations in Sweden.

4. Advanced infrastructure and technological potential

Sweden is renowned for its modern infrastructure, which facilitates efficient business operations. Cutting-edge technologies, fast internet connectivity, and high-tech transport networks create ideal conditions for businesses across various sectors. Additionally, the country actively invests in developing the digital economy, positioning itself as a leader in this field.

5. Support for innovation and startups

Sweden ranks among the world’s top countries for innovation, actively supporting entrepreneurs and startups. Numerous funding programs, accelerators, and incubators foster the development of new ideas and technologies. This support enables businesses to enter the market faster and succeed even in highly competitive industries.

6. High quality of life and skilled workers

Sweden offers a high standard of living, attracting talented professionals from around the globe. Educated and skilled workers who focus on technology and innovation are a key asset for businesses. This allows companies to recruit top-tier experts and build strong teams to achieve their goals.

How to register a company in Sweden and what are the main requirements for such registration?

Step 1. Initial setup

• Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
• Preparation and filing of the package of documents.

Step 2. Company registration

• Verification and reservation of the company name at the Swedish Companies Registration Office;
• Facilitating the notarial process for the company’s official registration;
• Opening a bank account and depositing a minimum of SEK 25,000 (~ €2,200) of the share capital;
• Incorporating the company’s data into the Swedish Companies Registration Office;
• Obtaining the Certificate of incorporation and Articles of Association;
• VAT Registration: if AS turnover is expected to exceed SEK 30,000 in a 12-month period, the company must register for VAT with the Swedish Tax Agency.

Requirements for registering a company in Sweden on the example of a Limited Liability Company (LLC) / Privataktiebolag (AB):

• Shareholders: at least one shareholder.
• Director: at least two directors or 1 director and 1 deputy (50% of the management board must be residents of EEA).
• Company Secretary: not required.
• Minimum Share Capital: SEK 25,000 (~ €2,200).
• Legal Address: a local registered office address is mandatory for every Swedish company.
• Liability: the shareholders’ liability is limited to the amount they have invested in the company.
• Accounting: AB must maintain accounting records, adhere to generally accepted accounting principles and make Swedish statutory filings.

What do you have to know about taxes when registering a company in Sweden?

Corporate income tax (CIT):

The basic CIT rate of general income is 20.6%. It is applied on all income of legal entities, while resident legal entities are liable for tax on their worldwide income unless special exemptions or tax treaties apply, non-resident legal entities are taxed on the income that originates from Sweden.

Personal income tax (PIT):

The PIT rate for residents:

• from SEK 0 to SEK 614,000 – 0% national income tax + 32% municipal income tax;
• over SEK 614,000 – 20% national income tax + 32% municipal income tax.

Non-residents working in Sweden for a Swedish employer or a foreign employer with a permanent establishment in Sweden are taxed a flatPIT rate of 25%.

Value-added tax (VAT):

The standard VAT rate for goods and services in Sweden is 25%.

Reduced VAT rates:

• 12% (e.g. some food items, hotel accommodations, and restaurants);
• 6% (e.g. books, newspapers, passenger transport within Sweden, admissions fees to cultural and sporting events).

For readers?

Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Sweden. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.?

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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.