Launching a business in Sweden as a foreigner
One of the well known Swedish lawyers with law offices in the Baltic and Scandinavia said once that Swedes think that other countries have a different way of doing things. The truth is that Swedes are different. Market with 9 million high income consumers is very attractive to Baltic entrepreneurs and in order to succeed with your entry, there are a lot of aspects needed to understand beforehand. Trust is essential value in Sweden to look for in relations with new partners, suppliers and customers. For this aim, going native and looking local is a good solution. Here are 1Office Sweden tips for launching your business in Sweden.
What type of entity to choose for entry?
There are different legal forms allowed for private business in Sweden and the best way is private stock company (aktiebolag or AB).
Benefits:
*Looking local is easier than with registered activity or a branch office.
*No financial or legal consequences for founders if closure or bankruptcy. This is relevant when compared to a branch.
Tips:
*Registering a company should be done as soon as there is entry plan, as having some years on you is always positive.
*Take time for the paperwork with all state authorities and service providers.
*Think about how to look local with company name, website and other channels.
*Local web domain can be registered even as a foreign legal or private person.
Registration
Registration paperwork is in Swedish. Registering a company can take about two to four weeks, depending on the time of the year and means of presenting your data. It can be done electronically and having electronic access devices is connected to having a bank account in Sweden as a private person. Our recommendation is to buy a ready-made company if there is no special need for doing it independently. This is usual business conduct and practiced by high majority of locals also. Benefits are easy paperwork with no simple mistakes, which means time saved.
Tips:
*Swedish commercial register (Bolagsverket) website business name search does not include trademarks. This means that free company name could be denied if similar trademark exists.
*Trademarks have to be searched through dedicated engine on a separate website.
Board members
Having eligible board members in your private stock company is quite important if doing business on the local market as a newcomer. If you are not an international corporation your reputation as a starting company can be measured through the list of board members (styrelseledamöter) and CEO (VD or verkställande direktör).
Tips:
*Carefully plan the names and look for being local. Having local members of the board and local CEO is always good.
*CEO is visible on the registration card and appointing one is voluntary.
*Appointed substitute board member is needed if you have only one board member. This substitute will be visible on the registration card also.
*Board members private addresses appear on company’s registration card.
*Address is important figure for determining the eligibility of a person in Sweden.
*Communication with authorities goes through mail only. Have a perfectly working postal address as a board member and a company.
*If no board members are domiciled (folkbokförd) in Sweden, a local contact person has to be appointed for mail correspondence. This will be visible on the registration card also.
Shareholders
In Sweden shareholders of a private stock company are not public and the board keeps track of it. Having them disclosed is still needed in every bank and in relations with tax office.
Tips:
*Foreign shareholders might mean that company will be dealt with as a non-resident in the bank and tax office.
Banks
Swedish banks are different in their approach to serving businesses, some offices are not serving legal persons all the way and communication goes through call center.
Tips:
*Choose a business minded bank with services in offices convenient to you.
*Foreign passport or national ID-card can be refused. To have one to two Swedish residents as guarantors might be needed to certify foreign document.
*Cross-border banking does not work between Baltic and Sweden, being present might be the only way for some procedures.
*Incoming payment sender is not visible if transaction done directly account to account. Locals use only Bankgiro (BG) or Plusgiro (PG) interbank payments which are available in any bank.
Tax office
Before starting with conducting business you should file for VAT and F-tax registration with Swedish National Tax Board (Skatteverket). Reasoning is that you should not invoice without VAT if you have tax applicable activities. F-tax certificate just proves your status as a taxpayer.
Tips:
*Missing F-tax certificate could hinder your trustworthiness with local partners.
*Use local accountant or consultants at least in the beginning to get things going.
Service providers and real estate
When looking for a service in Sweden with monthly payments, such as rent, telecom subscription etc., your company and possibly board member’s credit rating in Sweden could be checked (kreditupplysning). This is standard procedure. Commercial real estate is available through brokers mostly and fastest way would be instead setting up your office in one of the many office hotels.
Tips
*With no credit records available negative answer can come to a new company with no credit rating. Board members will be checked if no data on company.
*Negotiations and deposit payments can help in some cases.
*Private person’s income is also available in credit checks.
Estonian capital based 1Office Group subsidiary 1Office Sweden provides office space, virtual offices, accounting and company formation services in Stockholm and Tallinn city centers.
