Starting and running a business in Sweden as a foreigner can be overwhelming and complicated. This guide aims to provide a clear overview of the key steps and regulatory requirements involved. By the end, you will have a better understanding of the processes necessary to successfully establish and operate your business in Sweden.
Preparations before setting up your business
Before you can launch your operations, a number of preparatory steps need to be completed.
Choosing the right business structure
When starting a business in Sweden as a non-resident, you should choose a legal structure that fits both your goals and the regulatory framework. The most common options include:
- Limited liability company (Aktiebolag, AB): The preferred structure for international founders. It offers limited personal liability and is well-suited for growth and investment. Requires a minimum share capital of SEK 25,000.
- Branch (Filial): A Swedish-registered extension of a foreign company. Useful if you already operate abroad and want to expand into Sweden without forming a separate entity.
- Limited partnership (Kommanditbolag, KB): Involves both a general partner with full liability and a limited partner with restricted liability. Suitable for joint ventures or passive ownership models.
Registering a business name
When deciding on a business name for a limited liability company, it is important to adhere to the naming requirements set by the Swedish Companies Registration Office (Bolagsverket) in order for the name to be approved. These include:
- Uniqueness and legal designation – The company name must be clearly distinguishable from existing registered entities and must include the word aktiebolag or its abbreviation AB.
- Relevance to business activity – The name should reasonably reflect the company’s field of operation or area of expertise.
- Restriction on the term “publikt” – Private limited companies (privata aktiebolag) are not permitted to use the word publikt (public) in their registered name.
- Prohibition of purely descriptive names – A company name cannot consist solely of generic terms describing the business activity; it must be combined with a unique element to ensure distinctiveness.
Starting your business in Sweden
Having done previous steps, you can now proceed with the additional phase of the set-up process.
Company registration
Registering your company with the Swedish Companies Registration Office constitutes the first formal step in establishing the legal existence of your company. Note that this registration ensures legal protection of the company name; failure to do so may result in another entity securing the same name.
Throughout the company formation and registration process, there are several administrational tasks and documentation that can be particularly challenging to navigate as a non-resident. These include:
- Opening a corporate bank account
- Depositing the share capital into the corporate bank account
- Establishing a board of directors
- Designating a registered office address
Register with the Swedish Tax Agency
Once your business is registered with the Swedish Companies Registration Office, you also need to register with the Swedish Tax Agency (Skatteverket). In this process you need to provide information about different aspects of your business.
- Approval for F-tax – Confirms that the business is responsible for handling its own tax and social security contributions. This status is pivotal for issuing invoices without tax deductions.
- Registration of Value Added Tax (VAT) – Depending on the type of business you operate, you may need to register for Value Added Tax/VAT.
- Registration as an employer (if hiring) – If you intend to employ personnel, you must register as an employer to handle payroll taxes and social contributions properly.
- Declaration of business activities – You will be asked to provide details about the nature, scope, and start date of your business operations, as well as estimated turnover and financial results.
- Submission of preliminary tax return – This is an estimate of your expected income, which enables the Swedish Tax Agency to calculate the appropriate amount of preliminary tax (F-tax) your business should pay throughout the year.
Trademark registration
Securing trademark protection is a strategic step when establishing a new business. A registered trademark not only safeguards your brand identity from imitation or misuse but also strengthens your market position by giving you the exclusive right to use your name, logo, or other distinguishing elements within your industry. It adds tangible value to your business, enhances credibility with customers and partners, and can serve as a key asset in future expansion or investment. Early registration helps mitigate legal risks and ensures your brand is protected from the outset.
Running your business in Sweden
When operating a business, there are various ongoing tasks and responsibilities that play a crucial role in ensuring adherence to statutory and regulatory requirements, as well as operational efficiency. This involves:
- Bookkeeping
- Corporate governance
- Annual reporting
- Tax refunds
- Payroll responsibilities
- Employer of Record
- Updating company information
Our support, your success
Contact Nordic GEM for more information on how we can assist you in starting and running your business in Sweden. With our expertise and experience, we can provide you a secure start to your journey on building a successful business, giving you the right conditions to thrive on the Swedish market.
Our Support, Your Success
