Are you looking at how to set up a business in Sweden? This article “How to Set Up a Business in Sweden” is written to give you the answers to the 8 most common questions we get from non-Swedish companies/entrepreneurs planning to establish a presence in Sweden via a Swedish legal entity.
Revideco is an independent one-stop-shop for accounting and audit services with more than 25 years of experience in supporting international clients. We provide a full range of services to both large and small companies. We are proud to say that we are often considered as an alternative to the larger and more known “big” firms. We aim is to provide prompt service, high quality, and a reasonable price tag.
1. How to Set Up a Business in Sweden – AB or Branch office?
The first decision to make when establishing an entity in Sweden is if to register an AB (aktiebolag) or a Branch office. The AB is a limited liability company i.e. a separate legal entity. A branch office is not a separate legal entity, and the parent company, therefore, holds full liability for its obligations. If you do not have a current company in your home country you cannot register a branch office.
The registration process may be slightly more complex for a branch office, but on the other hand, no share capital is required. Out of a tax perspective, there are no major differences, but depending on the tax regulation in your home country losses in a branch office may be deductible in the parent company.
2. How to set up a business in Sweden – Off the shelf or not?
If you plan to start an AB you can either buy an off-the-shelf AB or register an AB from scratch. Buying an AB enables you to get ownership and registration overnight and you can start doing business faster, but the cost is higher. You can register your entity via the official website verksamt.se. Registration of a branch office can be managed by the same link.
Revideco can provide you with an off-the-shelf company overnight, assist you if you plan to register your entity on your own, and manage the whole process for you. Contact us here.
3. Share capital – in-kind or cash?
Starting an AB requires a share capital of a minimum 25 000 SEK. The share capital is normally paid in cash, but it’s possible to do it with other assets via an in-kind contribution. In-kind contributions will require additional administration and the involvement of an auditor, thus the cost to register will be significantly higher and more time-consuming.
4. How to Set Up a Business in Sweden – Bank account?
Our experience is that the most time-consuming part of registering an entity in Sweden is the process of opening a bank account, which is necessary to do. You are requested to fill in a KYC (Know Your Client), this includes many documents such as a description of the line of business, clients, payments and you might also be asked to provide a budget and business plan. Please provide the bank with all the requested information as they will not open a bank account until they can “check all their boxes” and turnaround time can be several months.
5. How to Set Up a Business in Sweden – Board of directors?
If all members of the board of directors are residing outside of Sweden, the AB must have a representative in Sweden (resident) who can accept notifications on behalf of the company.
A managing director and deputy managing director of an AB must reside within the European Economic Area EEA. At least 50% of the AB’s board members must also reside within the EEA and the same rule applies for the deputy board members. There is also a possibility to apply for an exemption of the residency requirements.
At Revideco we can handle exemption applications as well as providing your company with a person authorized to receive service of process. Contact us here.
6. VAT, employee and tax registration?
When the AB or branch office is formally registered, the entity needs to make a tax registration for company tax, VAT, and register as an employer, depending on the business.
7. Mandatory obligations?
An AB does have mandatory obligations regarding for example the documentation of shareholders meetings, maintenance of a list of shareholders, and statutory filings. The board of directors and the managing director does also have a set of obligations stated by law that they should be aware of.
8. Accounting & Auditor?
According to Swedish law, the original vouchers and books should be available in Sweden and can only be sent cross border if a special permit is granted. Therefore, entities with an existing accounting facility abroad need to make special arrangements to handle this.
Smaller branch offices and AB’s are exempted from the requirement of appointing an auditor. If an entity has exceeded at least two of the following criteria in the last two financial years, it must appoint an authorized auditor. The entity must have exceeded the same two criteria both financial years.
- an average number of 3 employees,
- a balance sheet total of more than 1 500 000 SEK,
- an annual turnover of more than 3 000 000 SEK.
If you are planning to have a larger business than this, it’s often more efficient to appoint an auditor from the very beginning.
We do hope that you have found this article on how to set up a business in Sweden helpful. We at Revideco cooperate with accountants, chartered accountants, CPAs, CFOs and shared service centers from all over the world. We are accustomed to providing information on Swedish law, Swedish GAAP, and specific Swedish regulations. We aim to find the most efficient solution for each and one of our clients.
Would you like to book a meeting with us regarding how to set up a business in Sweden? We would be happy to take a call, just register here and we will get back to you.