Company Registration in Sweden- An Overview
Sweden is a developed country in the Nordic region. It is present in Northern Europe and offers different forms of opportunities to investors. In terms of geographic area, it shares borders with Finland and Norway. The government of Sweden offers different forms of opportunities to investors to carry out business in Sweden.
A company incorporated in Sweden can be 100% foreign owned. Hence there is no requirement to have a resident director. There is more privacy for shareholders and directors as; their information does not need to be disclosed to the public. Sweden is ranked 14th place in the world for ease of doing business. Hence investors would find it simple to go for company registration in Sweden.
There are specific forms of benefits for businesses with lesser than 50 employees. This would include government grants up to the rate of 35% which helps in procurement of machinery and other supplies. 20% subsidy is provided for leasing office space and up to 45% subsidy is provided for installing the machineries in the office premises.
In the telecommunications sector, Sweden is fast moving and adopts with the changing environment. Due to all these reasons, an investor must go for the process of company registration in Sweden.
Benefits of Company Registration in Sweden
The following are the benefits of company registration in Sweden:
- Ease of Doing Business
Sweden is ranked 14th place in the world for ease of doing business. Hence investors would find it simple to go for company registration in Sweden. Foreign ownership is allowed in Sweden, thus a foreign individual can have 100% ownership in a Swedish Company.
- Subsidies and Incentives from Government
The Swedish government offers different benefits for investors. There are specific forms of benefits for businesses with lesser than 50 employees. This would include government grants up to the rate of 35% which helps in procurement of machinery and other supplies. 20% subsidy is provided for leasing office space and up to 45% subsidy is provided for installing the machineries in the office premises.
Sweden is ranked 11th in the world for technology developments. This would be in the areas related to information technology and telecommunications.
- Free Trade Zones
There is more than three free trade zones within Sweden. These free trade zones provide different forms of benefits for companies registered in Sweden. Sweden has different forms of bilateral and multilateral agreements with countries present in the Economic Bloc of the European Union.
As per the world transparency index, Sweden is ranked in the top 10 countries for tackling money laundering and corruption. Due to all these reasons, an investor should go for company registration in Sweden.
Eligible Business Structures for Company Registration in Sweden
An investor can utilise the following types of business structures for company registration in Sweden:
- Limited Company
• This type of entity is also known as ‘Sw. aktiebolag, AB’. For forming this type of entity usually one shareholder would be required. The principle of limited liability would be applicable to the shareholders and directors of this type of entity. There is no personal liability of the shareholders. Under limited company, there are two type of companies which include:
• Public Limited Company- A public limited company is allowed to offer shares in a public stock exchange.
All compliances related to the limited company have to be filed with the Swedish Companies Registration Office. This is the most preferred type of business structure utilised by an investor for company registration in Sweden. All limited companies in Sweden have to pay specific amount of corporate income tax which is levied at the rate of 21.4%.
- Trading Partnership
This type of entity is also known as ‘Sw. handelsbolag, HB’. All compliances related to the Trading Partnership have to be filed with the Swedish Companies Registration Office. There would be two or more individuals known as partners to incorporate this type of entity. The name of the partnership must contain the words ‘handelsbolag’. The principle of limited liability is not present for the partners; hence it would make the partners personally liable. Partners have to file personal income tax and also contribute to social security.
- Limited Partnership
This type of entity is also known as ‘Sw. kommanditbolag, KB’. There will be more than two partners, who can either be a natural person or a legal entity. One partner would be considered as the general partner and the other individual would be considered as a limited partner. The liability of the general partner would be unlimited, but the liability of the limited partner would be limited to the amount of capital contribution made. The name of the partnership must contain the words ‘kommanditbolag’. All compliances related to the Limited Partnership have to be filed with the Swedish Companies Registration Office.
- Branch Office
This type of entity is also known as ‘Sw. filial, Branch’. The branch office is a mere extension of the parent company and is allowed to carry out activities under the scope of the foreign parent company. There would be no separate legal entity for the branch office; however the liability would be under the foreign parent company. The name of the partnership must contain the words ‘Filial’.
Eligibility for Company Registration in Sweden
The following eligibility must be sufficed for company registration in Sweden:
- Minimum Capital required
An applicant for company registration in Sweden would require to have minimum 25,000 Swedish kronor. This can be in an equivalent European Currency. If it is in Euros, then this would be equal to about 2,500 Euros. A public limited company must have minimum of 500,000 Swedish Kronor.
- Minimum Number of Board Members
A limited company must have minimum number of board members to carry out the requirements of the company. Minimum of 1 member is required for a private limited company and three board members are required for a public limited company.
- Requirement to appoint an auditor
It is not mandatory for a private limited company to appoint an auditor; hence the appointment of the auditor is at the company discretion. A public company must mandatorily appoint an auditor. An auditor would carry out all the requirements related to annual compliances and submission of reports.
Procedure for Company Registration in Sweden
The following procedure must be adopted for company registration in Sweden:
- Registering the Company
An applicant going for company registration in Sweden would have to first register the company with the official authority which is ‘Bolagsverket’. The company would also have to register with the respective Swedish Tax Agency (Skatteverket).
- Fill up the Application Form
After this, the applicant would have to fill in the application form. The application form number 816e is utilised for registering a limited company in Sweden. For registering the company the applicant would have to pay a fee of SEK 2200.
- Foreign Residence requirements
At least 50% of the board of directors must reside within the European Economic Area (EEA) for company registration in Sweden. If the above criterion is not satisfied, the applicant can make an application for the exemption.
- Memorandum of Association
The memorandum of association (stiftelseurkund) is a formal document drawn by the shareholders of the company. Such document must be drafted in Swedish. The following information must be present in the MOA:
a. Information on the founders of the company
b. Share price of the company if it is a public company
c. Business name
d. All information on the board members of the company
e. Auditors information.
- Articles of Association
The Articles of Association would contain and represent all the bye laws of the company. The document must be drafted in Swedish and filed with the registrar for incorporating a Swedish company. The following information must be present in the articles of association:
a. Information on the business
b. Number of shares
c. Activities of the company.
- Subscribe to the Shares of the Company
The minimum capital which is required for company registration in Sweden is SEK 25,000 and for a public limited company at least SEK 500,000. The subscribers or the founders of the company may have to subscribe to the company. This means the founders would have to buy the shares of the company.
- Sign the Memorandum
In the next step, the applicant would have to sign the memorandum of association.
- Attach documents and file online
All the above documents including the memorandum of association and articles of association must be filed online with the application form number 816e must be filed. This can be carried out through the online process using the following website https://www.verksamt.se/en/web/international/home . However, the electronic service would only be available in Swedish Language.
- Company Registrar
‘Bolagsverket’ is the official registrar of companies which decides the application for registering the company. Once the company is registered the certificate of incorporation would be sent to the company.
The following procedure is utilised for a branch office (Company Registration in Sweden):
- Resolution has to be considered by the foreign parent company to set up a branch office in Sweden.
- The resolution has to be approved by the board and the shareholders.
- If it is approved, the Managing Directors would be appointed.
- Other key executives would be appointed for the branch office, including a deputy manager, auditor and a Swedish Representative.
Compliances required for Company Registration in Sweden
The following compliances are required once the company has been set up in Sweden:
- Shareholders Meeting- A limited company is required to have an annual shareholders meeting. This would decide the requirements related to the company.
- Board Meeting- There is no requirement as per the respective law for a board meeting.
- Company Tax- Limited Companies have to pay tax (corporate tax) of 21.4% with the respective tax authority. Partnerships have to file tax returns for the partnership as well as personal tax. Branch offices would also be required to file tax.
The following documents are required for company registration in Sweden:
- Articles of association
- Rules of procedure for the board of directors
- Organizational board resolutions
- Share certificates
- Share ledger
- Application form number 816e
- Resolution of Foreign Office
- Information on Appointment of Key Management Executives.