Company Formation in Sweden
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Sweden Company Formation
Company formation in Sweden follows this 3-stage process:
- Obtain certification from a Swedish bank that the total cash amount for shares has been deposited into an account. This takes a day.
- Submit an online application to the Swedish Companies Registration Office, and obtain a registration certificate. This takes 14 days and costs approximately 2000 SEK.
- Registration with the Swedish Tax Agency- this takes one day and can be done at the same time as stage 2.
What are the types of business organisation?
An alien firm wanting to do business in Sweden may establish a Swedish company in various legal entities, for example, a subsidiary (limited liability Company) or branch office. The most predominant company form in Sweden, not least for foreign owners, is a limited liability company. Swedish legislation accepts limited liability companies with only one owner (entirely owned subsidiaries) which has allowed both large and small companies to form this kind of business. A limited liability company is a legal entity incorporated in Sweden, which is not the case for a branch office.
Limited Liability Company
Shareholders of a business with limited liability are not responsible for the liabilities of the company itself, and this is the most common business format used by foreign businesspeople. Limited companies are divided into private and public and must have a minimum share capital of SEK 100,000 and SEK 500,000, respectively. A business with limited liabilities must have a board of directors that manages the business and takes responsibility for the company. Private businesses may have a board of just a few directors, but at least one must act as a representative director. Unless otherwise permitted, at least half of the directors must reside in the European Economic Area (EEA).
The application to form a limited liability company is filed at the Swedish Companies Registration Office and is commonly drawn up with the help of a professional. It takes around one or two weeks following the Office's receipt of the application for the company to be established. Another option is to buy an off-the-shelf company (already fully organized and registered) from a law firm or specialist consultancy.
A holding company
There is no special legal vehicle for establishing a holding company. A holding company has the form of a limited liability company. Involvement exemption rules and other tax legislation and case law make Sweden one of Europe's most favourable regions for holding companies. Capital gains and dividends from business-related shares are exempt from tax. The definition of business-related shares is commonly compared to other countries and applies to shares held in, or dividends received from, companies in Sweden and overseas.
A branch office
An overseas business wishing to establish itself in Sweden without actually starting a Swedish company may conduct its activity through a Swedish branch. Registration at the Swedish Companies Registration Office is needed. There is no minimum requirement for share capital for branch offices and relatively little legal requirements apply to their running. However, branch offices are not eligible for certain tax holidays and they commonly take longer to establish than limited companies. A branch of a foreign company is taxed on the profits of the branch as if it were a limited liability company.
A branch office may be a beneficial format for a transitional period of initiating a business establishment in Sweden. This is because deficits may be tax-deductible at the foreign company; not forgetting that the branch office is not a legal entity of its own. This would not be the case with a subsidiary, which is considered a legal entity in Sweden despite ownership. A branch office is not duty-bound to maintain any share capital, as is the case for a limited liability company. A branch of an alien business is taxed on its profits as though it were a Swedish entity.
A representative office
A representative office is not recognised as a legal entity, and cannot carry out any business operations. It can, however, carry out business activities such as liaison, market research and promotion for the parent company.
The representative office may not be involved in any commercial activities such as acting on its own behalf or partake in any kind of trading or business, except marketing. It be cannot be warranted power of attorney to act on behalf of the parent company.
Registration at the Swedish Tax Agency may be required if workers are to be hired in Sweden.
By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.
The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:
- Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
- Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
- Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
- Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
Characteristics of an offshore company:
- Memorandum and Articles of Association
- Certificate of Incorporation
- Registered Office/Agent
- Shareholders / Members
- Directors / Managers
- Company secretary
- Statutory Register
Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.
- Information on business opportunities in Sweden, key business areas and the Swedish economy
- Individual regulatory and financial information as well as advice on how to proceed when setting up a company in Sweden
- Access and introduction to relevant contacts with Swedish authorities, utilities and professional service companies such as lawyers, accountants, relocation specialists and recruitment agencies
- Help in finding visiting programs to suitable locations in the country
- Assistance in seeking business for possible joint ventures or other forms of cooperation
- Information on contacts with ISA's regional network throughout Sweden
- Posten Sverige AB with 2,800 units
- Svenska Turistforeningen with 309 units
- Svenska McDonald's with 235 units
- Sibylla/Nordic fastfood with 229 units
- JCA Aktiebolag with 217 units
- AB Svenska Pressbyran with 160 units
- Elkedjan with 156 units
- Fargtema with 132 units
- Grona Konsum with 122 units
- Tema Sportia AB with 110 units
- Electrolux Home Svenska AB with 106 units
- Dackteam with 100 units
Is there any assistance or incentive by a government body?
The Invest in Sweden Agency (ISA) is the Swedish governmental body responsible for facilitating foreign direct investment (FDI) to Sweden and is publicly funded. The ISA may contact businesses directly to present a case for investing in Sweden or handle requests from firms that have previously acknowledged Sweden as an attractive country for investment.
Either way, the ISA will work intimately with the businesses to help them achieve their investment. The ISA can provide beneficial sector-specific, regulatory and financial information and connect foreign investors with potential Swedish partners or arbiters. Professional guidance is assured, as most agency staff have corporate experience and expertise, especially in the investment process.
In 2006, ISA was named as the world's leading inward promotion agency by the World Bank.
ISA works intimately with its partners in Sweden, and offers assistance to investors. This involves aiding the process of planning and implementing individual investment projects in Sweden. The assistance may involve the following criteria and is free of charge:
What about franchising in Sweden?
At the start of 2006, the approximated number of franchises in Sweden was approximately 300; the majority of which are of Swedish origin. Constituting some 15,000 franchise units, employing 100,000 persons, the total turnover of Swedish franchising is approximately ?6 billion. Nearly half of the franchisees are active in retailing, although consulting and eateries are also big fields of business.
Below are the top-ten franchise companies in Sweden:
Organisations that can assist with Company Formation
When expanding your business to Sweden, donít forget to protect your brand. We provide Trademark Registration Services in Sweden and in the entire European Union.