Company formation in Sweden, overview in a nutshell
Contributed by MAXCORP - Stockholm Office
12 November, 2019
Sweden is a well-developed country in Scandinavia that has a little over 10 million inhabitants. It is a part of the European Union, but has decided to keep using their currency, the Swedish krona (SEK). Sweden has a friendly business culture and a stable economy. That, combined with the fact that almost everybody speaks English while having a high level of purchasing power, makes it an attractive place to do business.
If you are thinking about starting business in Sweden, it is relatively simple to find information about anything you need to make the right decisions. For example, local trade organizations provide information about the regulations about the sector, so it makes sense to find a professional consultant or a trade organization that covers your business area to avoid any surprises in the process.
Once you have decided that Sweden is the place do go, then how to continue with company formation in Sweden?
Business forms in Sweden
As the first step you need to decide which legal form to choose for your company as there are different legal forms for private businesses allowed in Sweden. A good overview about the different business forms can be found on the Verksamt webpage. The main forms for starting a business in Sweden are the following:
- Sole trader
- Limited liability company
- Trading partnership
- Economic association
- Non-profit association
- Community association
The most common and popular legal form in Sweden is the limited liability company (aktiebolag, shortened to AB), which can can be started by one or more natural persons or legal entities. As this is the most popular company form, we are focusing on this option below.
How to register a company in Sweden?
Company formation in Sweden, if you wish to establish a company from scratch, can take about 6 weeks, mostly due to the need to open a business startup bank account to deposit the share capital (25 000 SEK).
A qualified business service provider can help with a smoother and faster process. We at MAXCORP, for example, have well established relations with several local banks to ensure a swift setup, but for new formations one has to consider that a board member has to be present for a face to face meeting at the bank, hence making the process inconvenient for persons who prefer a faster setup with no travel involved.
In case you wish to start your activities sooner, the most time and cost efficient solution is to purchase a new shelf company with a clean balance sheet - in most cases the setup can be concluded in 5 - 10 business days (dependent on the registry work-load).
The latter version is most often used by foreigners starting a business in Sweden as well as locals for many reasons, including for avoiding the initial share capital deposit and startup bank account opening requirement to save time. For example, we establish new shelf companies weekly to provide a smooth transfer process to our clients. Below you may find an overview for both new formations and purchasing of a new shelf company.
Step-by-step company formation in Sweden:
- You need to apply the following documents to the Swedish Companies Registration Office (Bolagsverket):
- Registration form;
- A memorandum of association;
- The articles of association;
- A statement of paying the share capital.
- Since you need a statement of the share capital paid in, then you need to open a new business bank account. The startup bank account needs to be opened in a Swedish bank or a different EU country.
- The registration process usually takes a few weeks, but the exact processing time depends on the register, and it can be checked online here.
- As soon as the register has approved your application, the incorporation documents are sent to the registered address.
- The company registration process itself can be done remotely using the Power of Attorney. However, it might be necessary to travel to Sweden, because most banks are not willing to open new accounts without the owner being present in person.
Step-by-step purchasing a shelf company in Sweden:
- Find a reliable partner to buy the Swedish company from.
- Make sure this company does not have any bad financial history - you should always make sure that the balance sheet is clean, have a look at the annual report and check the history of the company with the tax authorities.
- You need to go through the purchase-sale transaction and sign the documents to change the articles of association (bolagsordning), the board of directors, and the name of the company.
- After the documents have been signed, it takes the register around 5 - 10 business days to process the changes.
- In most cases no travel is needed to purchase and set up a new shelf company. For example, we at MAXCORP offer full remote company formation packages.
Important points to keep in mind
If you start a Swedish company yourself or decide to purchase a Swedish shelf company, there are some requirements one needs to know about starting a business in Sweden:
- Minimum share capital for a limited company is 25 000 SEK.
- Starting any business activities is strictly not allowed prior to registration.
- It might be that the business you are planning to start in Sweden needs a permit. Before beginning with the registration process, check if your company requires a license or another type of registration to an authority, municipality, or other organization.
- Swedish limited liability company must have a board of directors (styrlese).
- In case the board has under 3 members, a deputy board member must be appointed. If the board has three or more members, the shareholders must nominate one of them as a chair.
- All board members need to be over 18 years of age.
- At least a half of the board members need to reside within the European Economic Area. If your company structure does not fill this criteria then we can apply for an exception from the registry on your behalf.
- In case none of the board members permanently resides in Sweden or has a Swedish Personal Number, the company also needs to appoint a local contact person (delgivningsbar person), who can accept correspondence with the government on behalf of the company. The contact person is needed to register the company in Companies Registration Office (Bolagsverket), and this person will be contacted by the authorities in case none of the board members is available. MAXCORP Stockholm office can provide this service in case of need.
- Every Swedish company needs to have a legal address that is used to send official letters to, and this address can not be a residential address in most cases. We can provide the registered office address as a service, including scanning the in-coming postage and forwarding it to your e-mail.
Steps required after starting business in Sweden
When you have your new company in Sweden incorporated, but before you start your activities, you still need to apply for several registrations with the Swedish Tax Agency (Skatteverket). It depends on the type of business, which exact registrations you need, but you might need some of the following registrations:
- VAT registration
- Employers registration
- MOSS registration
- RUT/ROT ombud
You most likely also need a local accountant to run your business smoothly and comply with Swedish accounting principles. The local accountant can also help you to decide which of the tax registrations you need to apply for. If you do not have a local accountant yet, we offer accounting and payroll as a service, which means you will only pay for the work you actually need to be done based on hourly rate.
It is always easier to go through both processes â company formation in Sweden from scratch or purchasing a ready-made company with local support, who knows the procedures and can assist with the language.
MAXCORP is a licensed service provider with a professional legal team in business since 1998. Our Stockholm office would be glad to find the best possible option for your personal needs.
We assist with new incorporations and always have new pre-registered companies without any previous activity ready to purchase. Further, we can also offer aged shelf companies with opened bank accounts ready for business.
Read more about company formation in Sweden here.
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