Setting up a business in Sweden14 November 2009
by Ina Dimireva -- last modified 28 July 2012
An overview of the process of starting a new business in Sweden.
If you want to start a business in Sweden, different rules apply depending on your citizenship, the form of business chosen and whether you intend to live in the country.
Legal forms for businesses
Companies can take the following legal forms:
A sole trader is a type of company in which there is no clear division between you as an owner and the company itself. You are personally liable for the company's debts.
Operating as a sole trader may be right for you if you want to start a business on your own. A sole trader business is always owned by one person. Spouses or couples with children can run sole trader businesses together.
Partnerships and limited partnerships (handelsbolag / kommanditbolag)
A partnership must have two or more partners. They may be private individuals or companies. A partnership is a legal entity.
The partners decide who will have the right to represent the company and enter into agreements on behalf of the company as an authorised signatory.
Joint and several liability:
In a partnership, the partners are always personally and jointly liable to other parties, and this can never be contractually relinquished.
Personal liability means that the partners must cover the company's debts and any agreements entered into from their own assets. Joint liability means that each and every partner may be personally compelled to pay all the company's debts. The person who has paid may then claim against the other partners for their share of the debt.
A limited partnership (kommanditbolag) is a kind of partnership where there is at least one partner whose liability takes the form of capital invested in the business. Such people are called limited partners (kommanditdelägare). At least one partner, the so-called general partner (komplementär), always bears unlimited personal liability. Otherwise, the rules are the same as for a normal partnership.
An economic association is an option if there are at least three people who want to start a company together.
An economic association is intended to promote the economic interest of its members. This means that the members must gain some economic benefit from belonging to the association. The benefit may be a contract, a better price or reduced costs. There is nothing to stop the association from promoting other interests that are not purely economic, provided that the economic interest takes precedence.
The scale of the investment that each member has to put in may vary from SEK 1 upwards. Both individuals and legal entities may be members.
A limited company is suitable where there are several owners or if the company potentially faces financial risks. The limited company is a legal entity in itself.
When you start a limited company you must have at least SEK 50 000 in share capital. This is equivalent to a quantity of shares held by the shareholders as proof that they own the company. The share capital may include cash or other assets of value to the business. These assets are called capital contributed in kind (apportegendom) and must be valued by an auditor.
Business plans and valuation
Whatever your business, you have everything to gain by planning your start-up and being well prepared. This is generally referred to as drawing up a business plan.
It describes how you intend to implement your business idea in a way that sets out clear goals for your company. Think through your business idea thoroughly before you start. Describe:
- the goods or services that you intend to sell;
- who is expected to buy the goods or services;
- the state of the market;
- your advantages and disadvantages compared to your competitors.
Contents of a business plan
A business plan should be easy to understand. It should contain facts and should be both serious and stimulating. A business plan may be more or less detailed depending on the type of activity. Some points that are always present are details of:
- the owners of the company;
- their experience and skills;
- the business idea;
- products or services, including pricing;
- the market and customers;
- marketing strategy;
- resource requirements;
- budget and liquidity and profit forecasts;
- schedule and work plan.
To succeed, a new business needs a sound commercial strategy and secure financing.
Some standard requirements to be completed when setting up a business are the same as when opening a branch.
The Services Directive: Points of single contact
The Services Directive is a European law that aims to make life easier for businesses that wish to provide services in the European Union – in their home country or abroad. The Directive defines the rules that apply to entrepreneurs wishing to establish a business or perform temporary services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway). It obliges member states to eliminate unnecessary bureaucracy, simplify formalities for businesses and make public administrations more efficient.
For the implementation of the Directive, each member state had to set up ‘Points of Single Contact (PSC)’, e-government portals which help businesses complete their administrative procedures on-line. The PSCs provide comprehensive information on all administrative matters related to setting up or expanding a services business in a given country. This includes for example:
- Which licences, notifications or permits do I need to obtain to start a business (at home or abroad)?
- What do I need to do when I want to offer my services abroad on a temporary basis?
- What do I need to do to apply for a licence? Which authority is responsible?
- Are the licences subject to a fee? What kinds of deadlines apply?
- Which acts and decrees apply in my sector?
- What do I need to do to establish, for instance, a restaurant or a shop? Or to work as a tour operator in another country without actually setting up a company?
- Where can I turn for personalised advice and further information?
With the PSCs, you no longer need to approach various authorities one by one!! The PSC allows you to find all relevant information and to send in your online applications to the responsible authority through one single contact point, the PSC. You can complete your administrative formalities electronically through the PSC. Just contact the PSC of the country that you want to do business in.
All PSCs are part of the European EUGO network; through a central website you can easily access all PSCs in Europe. Of course, the services of the PSCs are optional. You may always address yourself directly to the relevant authorities, too.
There is a joint service for electronic (online) company registration run by the Swedish Companies Registration Office (Bolagsverket) and the National Tax Board (Skatteverket). The information entered is registered directly with the online Company Registration service.
Registering a company
You can register as a sole trader, limited company, partnership or economic association via the online services on the business portal verksamt.se. In order to log in, you need an online ID. On verksamt.se you will also find information on types of company and how to register.
When starting a business you must register the company for corporation tax (F-skatt) and VAT (Moms) with the National Tax Board.
If staff are to be employed, the company must also be registered as an employer with the National Tax Agency. The corporation tax registration card (F-skattsedel) is proof that the company pays taxes and social security contributions.
You can find further information, links and various services on the business portal verksamt.se.
Source: Your Europe