Sweden - Business Environment Features:

Sweden offers a favorable business environment with the following key features:

Legal system based on civil law.
EU member since 1995.
Efficient company incorporation and administration.
Modern banking system.
Online company setup available.
Official language is Swedish, but English is widely used.
High reputation as a headquarters location.
Extensive double tax treaty network.
Simple procedure for changing shareholders.
These features make Sweden an attractive jurisdiction for trading and holding structures in international business structuring.

Main Taxation Principles in Sweden:

Corporate income tax at 20.6%.
Favorable dividend taxation at 0% for "business-related shares" held for more than 10% for over 12 months.
Capital gains from the sale of "business-related" shares are not subject to taxation.
No taxation on capital gains for foreign entities.
Participation exemption for dividend taxation.
Share capital decrease not subject to taxation for individuals.
No withholding tax on interest payments to foreign entities.
No "Thin capitalization" rules.
Extensive double taxation avoidance treaty network.
EU Parent-Subsidiary Directive applies.
Loss transfer between group entities allowed.

Corporate Requirements - Frequently Asked Questions:

Legal regulation: The Civil Code of Sweden and the Law on Companies.
Common company type: Private limited company (AB).
Minimum share capital: 25,000 SEK (2,500 EUR) for AB.
Shareholder requirements: 1 shareholder (local or foreign, natural or legal person).
Bearer shares not allowed.
Nominee shareholders not permitted.
Minimum 2 directors (1 ordinary director and 1 deputy director).
No corporate directors allowed.
No local director or company secretary required.
Local registered office is required.
Government public register of directors.
No government public register of shareholders.
Share transfers do not require a notary.
Beneficial owner disclosure to the State register is required.
Accounts submission and annual return filing required.
Audit required in certain cases.

Corporate Taxation - Frequently Asked Questions:

Corporate tax rate: 20.6%.
Capital gains taxation: 0% for certain shares held for more than 2 years.
No capital gains tax for foreign entities.
Advance Corporate Income Tax options.
Losses can be carried forward indefinitely.
Loss carry-forward allowed between group entities.
Dividends taxed at 0% for qualifying shares.
No withholding tax on interest.
No withholding tax on royalties except for royalties deriving from a Swedish Permanent Establishment.
Worldwide income is taxable.
Standard VAT rate is 25%.

Audit Requirements:

Audit required if specific conditions are met, including net income, capital, and employee count thresholds.
Audit conditions may vary based on different factors.

Wage and Social Insurance:

Personal income tax rate for employees is around 30%.
Additional social insurance contribution is approximately 31.42%.
No minimum wage requirement in Sweden.

Foreigners Working in Sweden:

Work permit required for non-EU citizens.
EU citizens have certain exemptions and can stay up to 3 months.
EC living permission may be required for EU citizens intending to live in Sweden permanently.

Company Types:

Private limited liability company (AB) is the most common.
Public limited liability companies are less common.
Various other legal entity types are available, including personal companies, partnerships, funds, public institutions, organizations, and associations.

Authorized Capital:

AB requires a minimum authorized capital of 25,000 SEK.
Public limited liability companies require a minimum authorized capital of 500,000 SEK.

Shareholders and Management:

Shareholders can be natural or legal persons.
Board of Directors requires at least 1 ordinary director and 1 deputy director.
Directors must be natural persons.

Banks:

Swedish banks are reputable and offer a range of e-banking and mobile banking services. Various commercial banks are available, including Swedbank, Nordea, SEB Bank, Danske Bank, and Svea Bank.
Sweden's advantageous corporate environment, competitive taxation, and efficient business setup procedures make it an ideal destination for businesses and investors.

For detailed information on incorporating and taxing Swedish companies, please contact any of our offices.