Market Entry Guide Sweden.

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1. Introduction
2. Modes of Setting up a Business in Sweden
   1. Sole Trader (Sole proprietor)
   2. Limited Liability Company
   3. European Company (Societas Europaea, SE)
   4. European Economic Interest Grouping (EEIG)
   5. Branch
   6. Partnership
   7. General Overview – Steps for Company Registration
   8. Average Time (in days) Required for Setting up a Business
3. Procedures for Immigration
   1. Procedures for Visa Application and Visa Provisions
   2. Work Permit
   3. Average Living Costs for Expatriates
   4. Average Cost of Office Space
4. Social Security System in Sweden
   1. Introduction
5. Free Trade Zones in Sweden
6. Opening a Bank Account in Sweden
   1. Introduction
   2. Banking Laws
   3. Procedure for Opening a Bank Account
7. Recruitment of Local Staff
   1. Employee Rights in Sweden
   2. Ministry of Employment, Sweden
   3. Major Recruitment Agencies and Websites
   4. Average Salary
8. Taxation
   1. Corporate and Branch Profits Tax
   2. Sales Tax/Value Added Tax (VAT)
   3. Social Security Contributions
   4. Other Taxes
   5. Determining Taxable Income
   6. Corporate Groups
   7. Withholding Tax
   8. Personal Taxation
   9. Treaty and Non-Treaty Withholding Tax Rates
9. Appendix
10. Evalueserve Disclaimer

1 Introduction

The Kingdom of Sweden is a constitutional monarchy in northern Europe, with approximately 9.3 million citizens (as of January 2010). King Carl XVI Gustaf is the current Head of State. Swedish is the official language of the country and the Swedish Kronor (SEK) is the currency denomination used in the country. The three largest cities are Stockholm (capital city), Göteborg and Malmö.^1,2

The country is characterised by one of the longest life expectancies and lowest birth rates in the world. Based on estimates, approximately one in every five Swedes is an immigrant or has at least one foreign-born parent. Most immigrants have come from countries such as Finland, Iraq, Serbia, Montenegro, Bosnia and Herzegovina, Somalia, Iran, Norway, Denmark, and Poland.³

According to the OECD projections for Sweden, the country’s GDP (at market price) will grow by 1.6 per cent in 2010 and by 3.2 per cent in 2011. Due to the recession, Sweden’s GDP (at market prices) declined by 0.6 per cent in 2008 and by 5.1 per cent in 2009.4 The services sector (71.6 per cent in 2009) is estimated to be the largest contributor to GDP and the biggest employer, followed by the industrial (26.7 per cent) and agricultural sectors (1.6 per cent). The unemployment rate as a percentage of the total labour force is estimated to be 8.8 per cent for 2010 and inflation (consumer price index) is forecast to be 1.4 per cent this year.⁵

The major industries in Sweden include iron and steel, precision equipment (bearings, radio and telephone parts, armaments), wood pulp and paper products, processed foods and motor vehicles. In 2009, Sweden’s total exports were estimated to be EUR 100.6 billion and imports were valued at EUR 92.7 billion.

In 2009, the country’s main export products were machinery, motor vehicles, paper products, pulp and wood, iron and steel products and chemicals, while imports included machinery, petroleum and petroleum products, chemicals, motor vehicles, iron and steel, foodstuffs and clothing. Sweden’s major trading partners include Norway, Germany, UK, Denmark, Finland, US, France, China and Netherlands.⁶

Sweden ranked fourth in the Globalization Index (2009) created by the Economist Intelligence Unit (EIU). Switzerland, the US and Singapore topped the rankings. This index measures and compares globalisation in 60 countries (with the highest GDP) based on parameters including openness to trade, flow of capital, exchange of ideas and technologies, movement of labour and cultural integration. The country topped the Innovation Capacity Index (2009-10) by the European Business School covering 131 countries, ahead of Finland, the US, Switzerland and the Netherlands.⁷

The investment climate in Sweden has improved significantly following its membership of the European Union in 1995. The biggest investments have been made in computer software and hardware, IT/telecommunications, industrial goods and health care sectors.

Sweden was able to survive the global financial crisis relatively well due to the large budget surplus it maintained from its strong economic growth and conservative fiscal policy. It is ranked high in terms of long-term sustainability of public finances. Due to this stability, the government was able to reduce personal and corporate tax rates, and boost additional spending to spur domestic demand.⁸

Most of the Swedish labour force is unionized. In Sweden, unions and employer organisations are independent of both the government and political parties. However, the National Swedish Confederation of Trade Unions (LO) keeps a close contact with the Social Democrats. Wages are set by collective bargaining and there is no national minimum wage.⁹

The following report aims to discuss the most important issues pertaining to the administrative, legal and financial aspects of setting up businesses and hiring personnel, as well as the living conditions in Sweden.

 

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2 Modes of Setting up a Business in Sweden

This section discusses the common investment vehicles available to foreign investors, the procedures to be followed in order to establish them and related regulations for each investment mode.

Starting a business in Sweden is not complicated, with simple and straightforward procedures and a transparent system. It is not mandatory to have a Swedish partner to start up an enterprise in Sweden. The most common modes for setting up business entities in Sweden by foreign investors and the legal particulars involved in each process are discussed below. Of the seven modes described below, a Limited Liability Company is the most common vehicle to start a business in the country.¹⁰

Table 1 below lists the various business modes in Sweden.

Table 1: Modes of Setting-up Business in Sweden

MODES OF BUSINESS
Types of Enterprises	Sole Trader
	Limited Liability Company
	European Company (Societas Europaea, SE)
	European Economic Interest Grouping (EEIG)
	Branch
	Trading Partnership
	Limited Partnership

Source: Bolagsverket - Information for Business Enterprise

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2.1 Sole Trader (Sole proprietor)¹¹

A sole trader or proprietor is a person or individual running the business. They are not a legal entity; however, the sole trader is personally liable for the performance of contracts and other business operations.

The significant characteristics of a sole proprietorship are as follows:

A sole trader may appoint employees to accomplish a business activity.

The minimum age of the owner is 16; however, until the age of 18, the authority is given to either parents or to an appointed guardian.

Any foreigner who wants to start a business in Sweden can register themselves as a sole proprietor and needs to register at Bolagsverket the Swedish Companies Registration Office) and enter the Trade Register.

Authorities have imposed certain restrictions related to the name of the enterprise; they are as follows:

• The name should not be misleading and it should explain the activity and location of the business.
• It should not contain the family name of a person other than the sole trader and should not have words or abbreviations indicating other business forms.
• There is an option for registering a secondary name as part of the enterprise; however, the name should not appear similar to the original name of the enterprise.
• Other restrictions can be found in the Trade Names Act (Firmalagen) and in other legislation.
• Already registered names can be checked at Näringslivsregistret (the Swedish Trade and Industry Register).

To accomplish the business activity, an authorised signatory (firmatecknare) must be appointed. This person can be:

• If the business is run by the sole trader, then that person can be the authorised signatory;
• If the signatory authority is given to some other person, then the owner can issue a power of attorney.

Registration with Bolagsverket (the Swedish Companies Registration Office) is optional for a sole proprietorship business. However, it becomes mandatory under the following conditions (as applicable for the past two consecutive years):

• If the average number of employees is more than 50;
• If the reported balance sheet is valued at more than EUR 2.6 million (SEK 25 million);
• If the reported turnover exceeds EUR 5.3 million (SEK 50 million).

To register as a sole trader, visit Bolagsverket - Forms - Sole Trader to download various forms.

To register as a sole proprietor, a nominal fee of EUR 126.60 (SEK 1,200) is payable at the time of registration. This includes certain other chargers such as EUR 95 (SEK 900) (per language) for registering the business name. A detailed fee structure with the various components and costs of starting a business can be found at Bolagsverket- Fees for Sole Trader.

Closing Down the Business– Bolagsverket (the company’s register) must be notified while closing down and delisting the business from the register. The application for closing down a business is available at Bolagsverket - Forms - Sole Trader.

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2.2 Limited Liability Company¹²

A Swedish limited liability company is a form of business enterprise in which the responsibility of the shareholders is normally limited to the capital invested in the company. Other characteristics are:

Representation by a board of directors.

Appointment of an auditor (an authorised public accountant).

The shareholders in a general meeting elect both the board of directors and the auditor.

A registration number is issued once the registration with Bolagsverket is formalised. This number is also used for other dealings with government authorities and acts as a means of identification for the company. This number must appear on all company stationary, invoices, order forms and website.

The two types of limited liability companies and their requirements are given in Table 2.

Table 3: Classification of a Business with Unlimited Liability

TYPES	REQUIREMENTS
Private Limited Liability Company (privat aktiebolag)	It cannot raise capital from the general public The minimum required share capital is EUR 10,550 (SEK 100,000). Appointment of a managing director is not compulsory. The board of directors may consist of one or two members.
Public Limited Liability Company (publikt aktiebolag)	It can raise capital from general public by issuing shares. The minimum required share capital is EUR 52,750 (SEK 500,000). Appointment of a managing director is compulsory. A minimum of three members should be appointed to the board of directors.

Source: Bolagsverket- Limited Liability Company

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Some of the significant characteristics of a limited liability company include:

The board of directors must be selected to represent the company and appoint an auditor who is an authorised public accountant.

Registration at Bolagsverket will provide the legal entity status as a limited liability company.

A limited liability company should include its name, registration number, and the registered office of the board of directors for communicating with external stakeholders.

The name of the enterprise should be unique and easy to distinguish from other business enterprises. To register and check the availability of a business name, visit www.bolagsverket.se/snr.

2.2.1 Formation of Limited Liability Company

To form a limited liability company, one or more founders is required. However, one of the founding members must be a legal entity within the European Economic Area (EEA). The following steps are adopted to form a company:

A memorandum of association needs to be prepared.

One or more founders subscribe to all the shares in the company.

The shares are paid up.

The founders complete, date and sign the memorandum of association.

Finally, the board of directors file the company details with Bolagsverket for registration.

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2.2.2 Details about Memorandum of Association and Articles of Association

The Memorandum of Association must state the following:

Names, address and personal identification number of founders

Details about the shares held by the founding partners

Details about the share price

Apart from the memorandum of association, the act requires additional information in the form of the Article of Association that should include the following important information:

Name of the company (‘aktiebolag’ or AB is used as a suffix)

Registered office of the board of directors

Type of business

Share capital

Number of shares

Details of members on the board of directors

Auditors

Notice of the general meeting of shareholders

Details about the annual general meeting

Financial year of the company

Please note that the Memorandum of Association and Articles of Association must be in Swedish.

2.2.3 Registering a Limited Liability Company

The board of directors file an application with the Bolagsverket for registration. A board member or the managing director must sign the application that is submitted in the original form.

The form can be downloaded from Bolagsverket -Forms - Limited Liability Company. The application form must enclose the following information:

The proposed name of the limited company

Full name, personal identification number and the municipality where the founder is registered (referred to below as its domicile)

Full name, personal identification number and mailing address (if domicile differs from mailing address then domicile must also be stated) of the following people:

• The chairman of the board
• Members of the board
• Deputy members of the board
• Managing director
• Deputy managing director
• Auditors
• Deputy auditors
• Layman auditors
• Deputy/deputies for the latter and principally responsible auditor
• Individuals with signatory power
• The person authorised to receive service of process (where relevant)

Registration number of the company’s auditor, if the auditor is a public accounting firm

Information on the signatory power

Details of the company’s share capital and number of shares

Details of the amount that has been paid in cash or by capital contribution in kind

A statement certifying that the founders, board member(s), deputy board members, managing director, deputy managing director, auditor(s), layman auditor(s) or deputy/deputies for the latter as well as the principally responsible auditor and the person(s) with signatory power are not in bankruptcy (or have a custodian pursuant to chapter 11, section 7 of the Parental Code)

A statement certifying that the person specially authorised to receive service of process does not have a custodian pursuant to chapter 11, section 7 of the Parental Code as applicable

A statement certifying that the company auditors meet the requirements for professional competence (as prescribed in Article 9, sections 10 to 13 in the Companies Act)

A solemn declaration that the people appointed as board members, deputy members, chairman of the board, managing director, deputy managing director, signatories, and those specially authorised to receive service of process, act as auditors, deputy auditors, layman auditors and deputy layman auditors have accepted the appointments

A solemn declaration that the information on the choice of chairman of the board, managing director, deputy managing director and person specially authorised to receive service of process as well as the information regarding signatory power, agrees with the company’s decisions

The following documents (in the form of certified copies or transcripts) need to be enclosed with the application

Memorandum of association, one copy

Articles of association, one copy

Bank certificate, the original, issued by a bank, credit market company or credit institute within the EEA (in Swedish translation)

For further details, please refer to Bolagsverket- Limited Liability Company.

2.2.4 Closing of the Limited Liability Company¹³

A limited liability company can be closed by the following methods:

Selling – The total number of shares of the limited liability company are sold when the owners sell the limited company. The change in the board directors should be advised to Företagsregistrering (in Swedish).

Bankruptcy – This is an option when the company is insolvent. The court appoints an official receiver who takes over the responsibilities for deciding on the company’s assets. The application for bankruptcy is filed with the district court (where the company registration office is located) by the board of the company or by a creditor with a claim on the company.

Liquidation – Under liquidation, the company is wound up after the payment of its debts. The Bolagsverket or the court appoints a liquidator to prepare a report on the liquidation process.

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2.3 European Company (Societas Europaea, SE)¹⁴

A European company is a European business enterprise for conducting business on a cross-border basis in the form of a limited liability company.

The following are some significant characteristics of a European Company:

The name of the company must use the abbreviation SE either before or after the end of the name. It should be unique or different from other company names in the European company register.

A board member, managing director or any other person can represent the company and holds signatory powers on behalf of the company. However, at least one of the authorised signatories must be a resident within the EEA.

Approved accountants, approved accountants with examination of professional competence, authorised public accountants and registered public accounting firms, registered by Supervisory Board of Public Accountants (Revisorsnämnden) are appointed to audit limited liability companies.

The European company follows two different types of business structures:

• One-tier system – Under this system, along with shareholders, there is a decision-making organ that takes care of management and administration of the company.
• Two-tier system – Under this system, the management organ is responsible for the management and administration of the company. A supervisory organ co-exists which can appoint and dismiss board members of the management organ and supervise its work.

A European company can change its registered office, however:

• It does not mean that the company is winding up its business.
• The Act on European Companies provides protection to creditors and helps them claim their demands against the company.
• Creditors have a right to oppose the decision for transferring the registered office.

2.3.1 Formation of a European Company

A European company can be formed by several existing entities in the following ways:

A merger between public limited liability companies belonging to two different member states of the European Union (EU). The merger can take place either by absorption, i.e. one or more companies merge into another company. The Merger Directive (Third Council directive 78/855/EEC of 9th October 1978) includes regulations on the control by auditors and authorities that need to be exercised in connection with the merger.

Two or more private or public limited liability companies can be combined to form a holding company in the form of a European company. A prerequisite is that at least two of the companies are governed by the legislation of different member states, or that they have had a subsidiary or branch office in another member state for at least two years.

Two or more companies can establish a common subsidiary in the form of a European company. A prerequisite is that at least two of the companies are governed by the legislation of different member states, or that they have had a subsidiary or branch office in another member state for at least two years.

A national public limited company that has a subsidiary governed by legislation in another member state for at least two years can be transformed into a European company.

An existing European company can establish another subsidiary in the form of a European company.

2.3.2 Registering a European Company

The Bolagsverket registers European companies with a registered office in Sweden. The registration has to be published through an announcement in the Swedish Official Gazette (Post-och Inrikes tidningar) as well as in the Official Journal of the European Communities.

2.4 European Economic Interest Grouping (EEIG)¹⁵

European Economic Interest Grouping is a type of partnership across borders. The purpose of forming a group is to encourage and develop the economic activities of its members and is not intended to earn profit. Key features of an EEIG are as follows:

The people proposing to form a group must enter into a contract and be registered.

The group does not need to have capital.

Members have unlimited joint and individual liability for the debts of the grouping.

The participants must include at least two people with economic activities in different member states of the EEA.

At least two members should either have their head office or be based in different member states.

The grouping enjoys legal capacity and can enter into contracts or conduct other legal acts.

Only the manager or the individual managers can represent the group’s interaction with third parties.

Forms for registering the group are available at Bolagsverket - Forms - EEIG. All members should sign the form. The grouping can be dissolved by liquidation; however, the grouping retains its legal capacity until the liquidation proceedings are completed.

2.5 Branch¹⁶

A foreign enterprise can start its business in Sweden either in the form of a subsidiary or a branch. A branch is the branch office of a foreign business enterprise with a separate administration in Sweden.

Some of the significant characteristics of a branch office include:

A managing director who is responsible for the operation of the branch.

The branch is treated as part of the foreign business enterprise.

A branch needs to follow Swedish rules and regulations to carry out its business activities.

The assets and liabilities of the branch are accounted for under the total assets of the foreign enterprise. The branch has no share capital.

All accounting records need to be maintained according to the Book-Keeping Act. Branches should not merge the account books with the foreign business enterprise.

An authorised or approved public accountant examines the accounts of the branch and the administration of the managing director.

The business name should be unique and resemble the nature of the business.

The foreign business enterprise should register its branch in the Bolagsverket with a form duly signed by the managing director. Forms can be downloaded from Bolagsverket - Forms - Branch.

A EUR 211 (SEK 2,000) registration fee is paid when submitting the application. More information on the costs of opening a branch office can be found at Bolagsverket- Fees for Branch.

2.5.1 Notification to the Bolagsverket

Before opening up a branch office in Sweden, the foreign entity must notify the Bolagsverket regarding certain details. Such notification should include:

Name of the foreign business enterprise, its legal form, nationality and registered office and postal address

Proposed company name of the branch

Details of the branch office locations

Particulars about the share capital of the foreign business enterprise

Details about the financial year of the foreign business enterprise and the branch

Name and postal address of the peoples who are authorised to represent the foreign business enterprise

Registration number of the foreign business enterprise and its registered location

Personal details of the managing director of the branch, the deputy managing director, the person authorised to receive services of processing and the auditor and deputy auditor (if any) of the branch

A declaration that the company is not bankrupt

A solemn declaration that the special person authorised to receive service of process (if appointed) does not have an administrator under chapter 11, section 7, of the Parental Code

A declaration that the principle individuals involved have accepted their assignments

Notification of the business activities of the foreign business enterprise

Details about the business operations of the branch

For a full list of the documents that need to be attached with the notification, refer to Bolagsverket - Branch Office.

2.5.2 Closing Down of a Branch

A branch can be closed in the following scenarios:

If the foreign business enterprise or the branch is declared bankrupt;

Foreign business enterprises may announce their voluntary closure by submitting a notification to the Bolagsverket.

If all the required documents (Financial report, Annual Report) are not submitted to Bolagsverket and there is no authorised managing director or no special person authorised to receive the service of process, the branch could be closed.

2.6 Partnership¹⁷

It is an agreement between two or more persons who jointly want to operate a business as an enterprise. Founders of this business are called partners. Both natural and legal persons can become a partner.

Table 3 lists the types of partnership businesses and their requirements.

Table 3: Classification of Partnership business

TYPE	CHARACTERISTICS
Trading partnerships (Handelsbolag)	Partners are personally liable for the debts of the firm.
Limited partnerships (Kommanditbolag)	It includes two types of partners, a limited partner with a limited liability and a general partner with unlimited liability.

Source: Bolagsverket - Trading Partnership and Limited Partnership

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Some significant characteristics of a partnership business include:

The minimum required age for a partner is at least 16 years; however, until the age of 18, the authority is given to either parents or to an appointed guardian.

A registration number is given to the partnership firm, and this number is used for all further communication with the authorities.

Any partner, who joins the business at a later period, is also liable for the previous debt of the firm.

A partnership does not require an auditor in most cases.

The business name should be unique and resemble the nature of the business.

Partners can appoint a procuration holder18 to represent the business and sign on behalf of other partners.

Any amendment in the information of the partnership agreement must be notified to the registering office.

2.6.1 Registering a Partnership

A partnership business has to register itself at the Bolagsverket to get legal entity status. The e-service Företagsregistrering (in Swedish) can be used to register the company with the Bolagsverket. All partners must sign the application. The partners also need Swedish e-identifications for this process.

The registration can be done via an application form that can be downloaded from Bolagsverket- Forms for Partnerships

For registering as a partnership business, a nominal fee of EUR 126.60 (SEK 1,200) is paid at the time of registration. For more information about various other fees, refer to Bolagsverket- Fees for Partnership.

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2.6.2 Closing of a Partnership

Partnerships can be closed down or terminated by liquidation or bankruptcy. This must be reported for registration with the Bolagsverket. If the enterprise is restructured, it must be reported to the Bolagsverket for registration.

Table 4 below provides a brief summary of the key features of the businesses operating in Sweden.

Table 4: Forms of Business Enterprises

	SOLE TRADER	TRADING PARTNERSHIP	LIMITED PARTNERSHIP	LIMITED COMPANY	ECONOMIC ASSOCIATION
Legal Entity	No	Yes	Yes	Yes	Yes
Number of owners	One person	Minimum of 2 people or enterprises	Minimum of 2 people or enterprises	Minimum of 1 person or enterprise	Minimum of 3 people or enterprises
Owner Liability	Business operator is personally liable	Partners are personally liable	General partner is liable	Company is liable for its debts	Association is liable for its debts
Registration	With the Swedish Tax Agency and possibly the Swedish Companies Registration Office	With the Swedish Companies Registration Office and the Swedish Tax Agency	With the Swedish Companies Registration Office and the Swedish Tax Agency	With the Swedish Companies Registration Office and the Swedish Tax Agency	With the Swedish Companies Registration Office and the Swedish Tax Agency
Taxation	Tax imposed on the surplus (income tax + social security contributions).	Tax imposed on the partner’s part of the partnership’s surplus (income tax + social security contributions).	Tax imposed on the partner’s part of the partnership’s surplus (income tax + social security contributions).	Tax imposed on profit Owners are taxed on salaries taken out and possible dividends	Tax imposed on profit Members are taxed on salaries taken out and possible dividends
Annual report and auditor	Only annual accounts	Prepare an annual report, appoint an auditor and submit the report to the Swedish Companies Registration Office	Prepare an annual report, appoint an auditor and submit the report to the Swedish Companies Registration Office	Prepare an annual report . An auditor must be appointed and submit the report to the Swedish Companies Registration Office	Prepare an annual report and an auditor must be appointed
Sick pay or sickness benefits	Sickness benefits provided by the Swedish Social Insurance Agency	Sickness benefits provided by the Swedish Social Insurance Agency	Sickness benefits provided by the Swedish Social Insurance Agency	Sickness benefits from the company	Sickness benefits from the company
Winding Up	Strike off the register	Closed through liquidation if the partners do not agree and strike off the register if agreed	Closed through liquidation if the partners do not agree and strike off the register if agreed	Closed through liquidation	Closed through liquidation

Source: Bolagsverket – Starting Up a Business

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2.7 General Overview – Steps for Company Registration

The following briefly describes the registration procedure and the time required for each step in Sweden:

A written statement certifying that the total cash amount to be paid for shares has been deposited in an account from a Swedish bank (requires one day and is not chargeable).¹⁹

Register with the Swedish Companies Registration Office (Bolagsverket) and obtain the registration certificate. The Bolagsverket acts as a central body for the registration of all new businesses in Sweden. It is a government body that ensures a smooth procedure for starting a business in Sweden (requires 14 days and is chargeable).²⁰

Register with the Swedish Tax Agency (Skatteverket) (requires one day, takes place in parallel with other steps).²¹

An employer or a company starting a business in Sweden is subject to VAT and must register with the Swedish Tax Agency. The registration should take place two weeks before starting business activities. Application forms can be downloaded from the Swedish Tax Agency website: (www.skatteverket.se) or can be ordered and received by post free of charge.

2.8 Average Time (in Days) Required for Setting up a Business

According to Doing Business, a project supported by the World Bank, Sweden ranks 18th (Doing Business 2010 ranking) among the 183 economies (countries, regions and cities) it studied. Table 5 lists the data released by the World Bank related to the time taken for starting a business in Sweden.

Table 4: Forms of Business Enterprises

DATA RELATED TO STARTING A BUSINESS	YEAR - 2011
Rank	18th (in the world)
Procedures (number)	3
Duration (days)	15
Cost (percentage of GNI per capita)	0.6
Paid in Minimum Capital (percentage of GNI per capital)	28.5

Source: Doing Business - Sweden

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Figure 1 shows a comparison between various countries based on the number of days and procedures required for setting up a new business in Sweden.

Figure 1: Obstacles in Starting Businesses in Various Countries/ Regions (2010)

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3 Procedures for Immigration

Foreign nationals must apply for a visa/work permit to visit, work, study, establish or join in any business or stay in Sweden. The Swedish Migration Board has the right to refuse the arrival and stay of foreign nationals. The Foreign Ministry controls this board (responsible for immigration) and the Ministry of the Interior (responsible for immigrant affairs within the Government Chancery).²²

3.1 Procedures for Visa Application and Visa Provisions

The Swedish Migration Board receives visa applications from people who wish to visit Sweden. The requirements pertaining to each type of visa are available in the table below.²³ The necessary documents to complete the visa application procedure are as follows:²⁴

Completed visa application form

Two passport photographs

Valid national passport, original and a copy

Original of valid resident visa

Confirmation letter from health insurance provider stating coverage and a photocopy

Proof of group travel/hotel booking in Sweden/airline reservation for Sweden and a photocopy

Current bank statement and a copy

Reference letter from employer/education institution

Visa fees for a Swedish visa

Various application forms for working in Sweden, studying in Sweden, visiting or leaving Sweden are available at The Swedish Migration Board – Application Forms.

Table 6 lists the different types of visas issued by the Swedish government.

Table 6: Visas Issued in Sweden

TYPE OF VISA	APPLICANTS AND DURATION	MAJOR REQUIREMENTS & CONDITIONS
Swedish Airport Transit Visa	Can only pass through the territory of the Schengen member state without access to the national territory of the Schengen member state	Application for Transit Visa (Form 119031, same as Application for Schengen Visa) needs to be completed and duly signed Appendix D: Family Appendix for Applicants (Form 201031) needs to be completed by all applicants (Application forms can be obtained from Link.) Valid national passport or other travel document Copy of airline ticket(s) Children under 18 must carry their birth certificate with them. Written consent of both parents (or non-travelling parent) in case the child is travelling alone Visa fees is equivalent of EUR 60
Visitor Visa	Person who wants to visit relatives or friends in Sweden	Application for Schengen Visa (Form 119031) needs to be completed, duly signed and dated Appendix D: Family appendix for Applicants (Form 201031) should be filled by all applicants (Application forms can be obtained from Link) Passport should not be more than 10 years old and should be valid for 3 months post departure from the territory of the Schengen states; it should contain two blank visa-pages. Two recent passport photographs with a white background A recent original letter in Swedish or English along with the sponsor’s proof of identity Evidence of employment or student status Documents such as original recent bank statement, traveller’s cheques or postal order to prove that the applicant has sufficient funds to support their stay A valid personal travel medical insurance entailing – 30,000 Euro – Emergency treatment by a doctor – Urgent ambulance transportation – Transportation back to the applicant’s home country if required for medical reasons Children under 18 must should carry their birth certificate A written consent of both parents (or the non- travelling parent) in case the child is travelling alone A pre-paid special delivery envelope to post the passport back or an extra fee will be charged Photocopy of passport and original documents Visa fee is EUR 60
Visa for Medical Treatment	Any person who is visiting Sweden for medical treatment. Valid for maximum 3 months	Posses a valid passport Money to ensure travel and stay Individual medical travel insurance Form for Schengen Visa needs to be completed and submitted 2 passport photographs not older than 6 months Appendix D form, no. 201031 (family appendix) and Appendix C form, no. 219011 need to be completed Medical certificate from Sweden showing details of the medical treatment A medical certificate from the resident country certifying that the applicant cannot obtain the treatment there Proof that the applicant has deposited money in Sweden for the planned treatment and any after-care needs Other documents For more details refer to Visa for medical treatment
Business/ Conference Visa	A person who is on a business trip to Sweden Maximum of 3 months in any 6-month period	Possess a valid passport Money to ensure travel and stay Individual medical travel insurance Application for Schengen Visa needs to be completed and duly signed 2 passport photographs not older than 6 months Appendix D form, no. 201031 (family appendix) and Appendix A form, no. 210021 needs to be filled and attached An invitation letter highlighting information such as the reason and duration of the visit from the company or the organisation arranging the conference Other documents
Swedish Tourist Visa	Person who wants to visit Sweden as a tourist Maximum of 3 months in any 6-month period	Possess a valid passport Money to cover their travel and stay Individual medical travel insurance Complete the form Application for Schengen Visa 2 passport photographs not older than 6 months Appendix D form, no. 201031 (family appendix) Other documents A person who is in Sweden wishing to extend a visit should apply for a residence permit for that visit.
Swedish Student Visa	Who wants to study in Sweden/exchange students Duration can be the study time but not more than one year period	Application for residence permit for students and doctoral students, no. 105031, needs to be completed and duly signed Copy of the pages from the passport supporting the applicant’s identity, the validity period of their passport and any permits to be in countries other than their native country 2 passport photographs not older than 6 months A certificate stating that the student has been admitted to fulltime study A relevant certificate in case permission is required from a central bank or equivalent to transfer money from the applicant’s home country A receipt of the paid application fee A copy of the document that assures the student has comprehensive health insurance valid in Sweden (if the student plans to study for less than 1 year) Documents proving that the candidate can support himself. For example: A bank statement, document showing the student has been awarded a scholarship or similar award (such as a foreign study grant), a document showing that the candidate has been awarded a study grant or a stipend For further details refer to Swedish student visa
EU-Family Visa	Family members of EU/EEA nationals (spouses and dependents)	Schengen Visa (Form 119031) needs to be completed and duly signed 2 recent passport photographs of the applicant on a white background not older than 6 months Passports (applicant’s and EU-spouse’s). Original marriage certificate (or birth certificate for children under 18 years of age) Written consent and proof of identity of both parents (or the nontravelling parent) in case the child is travelling alone Photocopies of the passports, residence permit and marriage certificate where applicable If the applicant is married to a Swedish citizen, enclose an extract from the Swedish population registration, which can be obtained from the Swedish Tax Agency (www.skatteverket.se). A pre-paid special delivery envelope to post the passport back or an extra fee will be charged The original marriage certificate (or original birth certificate) with parents’ names must be submitted together with spouse’s/ parent’s original passport

Sources: Sweden Embassy- Visa Requirement;
Embassy of Sweden - Visa for visiting Sweden

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3.2 Work Permit ²⁵

A work permit is required for a foreign national (outside the EU) intending to work in Sweden and the applicant must have a job offer when applying. This visa is issued for a maximum of two years. If a person works in Sweden for more than three months, they should also apply for a residence permit. The main requirements when applying for a work permit are as follows:

Valid passport

Ability to meet expenses during the stay

The wage should be at least EUR 1,371.5 (SEK 13,000) per month

The employer must fulfil the following conditions:

• Should have advertised the post in Sweden and the EU for at least ten days.
• Should have offered terms of employment that are equal to those of a Swedish collective agreement or according to the standard in that profession or sector
• Gives relevant union organisations the right to express opinions

The completed application form must be accompanied by the following documents:

Copies of the pages from the passport that validate the applicant’s identity, validity period of the passport and whether the person has permits to be in countries other than their native country

Two passport-size photographs not older than six months

Job offer letter

Receipt of paid application fee (For Fee Details refer to Link)

In case the person has been granted a residence and work permit, he/she needs to carry the original passport while collecting the permit. The applicant’s immediate family may be granted residence permits for the same period that the applicant was granted residency and work permits.

The person can apply either through the Swedish Migration Board’s website or by completing a form and submitting it in person. If the application is submitted online, the decision comes within three weeks, provided no further details are required.

If the person is residing outside Sweden, the applicant has two options to apply:

Swedish Migration Board’s website, or

At a Swedish mission abroad in the country where the applicant resides. Use the form Application for Swedish Work Permit — for applicants outside Sweden, no. 149011.

If the person resides in Sweden, the applicant has two options to apply:

At the Swedish Migration Board’s website, or

By post to the Swedish Migration Board or to one of the Swedish Migration Board’s permit units.

For details about terminating employment or a change of employer, refer to Work Permit

Table 7 lists the other types of work permits and the links for finding more information on the visa requirements.

WORK PERMIT FOR	INFORMATION LINKS
Asylum seekers	Work permit requirements for asylum seekers
Au pair	Work permit requirements for au pair
Berry pickers	Work permit requirements for berry pickers
Citizens of Australia and New Zealand	Work permit requirements for citizens of Australia and New Zealand
Citizens of Canada	Work permit requirements for citizens of Canada
Performing artists	Work permit requirements for performing artists
Sportsmen/sportswomen and coaches	Work permit requirements for sports people
Students in Sweden	Work permit requirements for students
Visiting employers in Sweden	Work permit requirements for visiting employers
Visiting researchers	Work permit requirements for visiting researchers
Self-employed	Work permit requirements for selfemployed

Source: Migrationsverket – Work Permit

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However, certain people are exempted from the requirement to hold a work permit, such as citizens of Nordic countries, EU/ EEA citizens and their family members, citizens of Switzerland, etc. A detailed list of this category of people can be found at Exemptions to the work permit requirement.

Applications can be downloaded from Application forms for work and residence. Details about the Visa fee are available on Fees for Permits. Exemptions to Work Permit are available through this Link.

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3.3 Average Living Costs for Expatriates

Sweden is less expensive than neighbouring countries such as Norway and Denmark.²⁶ The cost of living in Sweden differs based on the city in which the person resides. In the large cities, prices can be significantly higher than in other areas of the country. The general perception among foreign visitors is that the cost of living is higher in Sweden compared to their home countries; however, the average Swedish income is also relatively high.²⁷

Table 8 provides an overview of the costs of useful items.

Table 8: Indicative Costs of Some Useful Items

ITEM DESCRIPTION	COST (IN SEK)	COST (IN EUR)
1 litre of milk (not UHT-treated)	8	0.80
Bananas	14-18 per kilo	1.50–1.90 per kilo
Movie ticket	80-100	8.40-10.60
1 litre of petrol	12+	1.30+
Monthly commuting costs on subways, buses and trains	690-1,100	72.80–116.10

Source: Sweden - Living costs

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3.4 Average Cost of Office Space

In Sweden, rental costs for industrial and office space are comparatively lower than in other OECD countries. Property tax is 1 per cent for commercial office space and 0.5 per cent for industrial premises; it is charged over and above the rent. The rental rates change in line with the consumer price index (CPI) to account for inflation.²⁸

Table 9 provides information related to rent for office space in major Swedish cities.

Table 9: Office Property Rents in Major Cities of Sweden for Q3 2009 (EUR (SEK)/square metre/per year)

CITY
Central Business Districts (CBD)	Stockholm area	Gothenburg / Göteborg area	Malmö/Lund area
Prime rent29 (EUR (SEK)/ sq m)	411.5 (3,900)	237.4 (2,250)	216.3 (2,050)
Rent grade B properties30	284.9 (2,700)	189.9 (1,800)	184.6 (1,750)
Inner city	Stockholm area	Gothenburg / Göteborg area	Malmö/Lund area
Prime rent (EUR (SEK)/ sq m)	327.1 (3,100)	200.5 (1,900)	142.4 (1,350)
Rent grade B properties	232.1 (2,200)	147.7 (1,400)	131.9 (1,250)

Source: Invest in Sweden: Running a Business

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4 Social Security System in Sweden

4.1 Introduction

The Swedish Parliament or the Riksdag is responsible for deciding the benefits that are included in the social insurance system. The Försäkringskassan manages the social insurance and allocates the money. The social security system in Sweden covers almost everyone living and working in Sweden and is funded by the State.³¹

The main objectives of the social security system are to provide:

Guaranteed minimum level of financial security to residents

Financial support for people who are either ill, disabled, parents or pensioners

An applicant or their family members (residing or working in the EU) will be eligible for social insurance benefits in any other EU member state, which includes Sweden, as it a member of the European Union.³² The benefits available under the social insurance scheme are given in Table 10 below:

Table 10: Social Insurance Benefits

TYPE OF BENEFITS	DESCRIPTION
Sickness Benefits	An employer pays for first 14 days of illness of an employee who has been employed for at least a month or for 14 consecutive days. No payment is made for the first day. However, if the employee is still unwell after 14 days, the employer will notify the Försäkringskassan about the illness. On returning to work, the employee must provide the employer with a written explanation for the illness and the exact duration of leave. If the employee is not entitled to sick pay, they can get sickness benefits from the Försäkringskassan by notifying it of their relevant details. Försäkringskassan also provides sickness benefits once the employer halts it (usually after 14 days of sickness). A medical certificate needs to be produced for sick leave greater than 7 days. Sickness benefits have a maximum term of 364 days out of a 450-day period. In case of serious illnesses, sickness benefits can be extended for an unlimited period. An unemployed person must register with the Employment Service [Arbetsförmedlingen] within three months of becoming unemployed to be entitled to benefits. In case the employer or Försäkringskassan feels that the employee is able to work but is unable to commute to work in the normal way, the employer or Försäkringskassan will compensate for the additional travel expenses. In the case of self-employment, the person should pay health insurance contributions along with their income tax. A disease carrier allowance is payable to a person who: has an infectious disease but is still fit for work is advised to stay away from work due to some infection If any person stays away from work, due to the serious illness of a relative, they are entitled to time off work and benefit for the care of the ill person. A disabled student is entitled to activity compensation if he/she has to attend school for a longer duration due to disability In case the working capacity of a person aged between 30 and 64 years is permanently reduced by at least a quarter, they are entitled to sickness compensation. In case the person has been receiving compensation for more than a year, but now wants to test their working capacity/capability without losing entitlements, they can apply for a dormant sickness or activity compensation for a trial period and receive compensation at the same time. A rehabilitation benefit is given to individuals who need some medical treatment to return to work. Swedish residents are entitled to receive subsidised dental care [tandvårdsstöd] from the age of 20. It is free for those under 20 years of age. If a person is insured in Sweden, they are entitled to medical assistance in an EU/EEA country or Switzerland for a short period. The person may be entitled to benefits outside the EU/EEA if Sweden has agreements with those countries.
Pregnancy Benefits	An adoption allowance is given to parents when they adopt a child from abroad. The adoption can take place once permitted by a Swedish court. The parents can apply to the Försäkringskassan. A pregnant woman is entitled to be transferred to perform other roles in case her present job is physically demanding. In case the employer is unable to transfer the job, the person is entitled to pregnancy benefits if: She is engaged in any physically demanding job and not able to perform the work, then benefits are given for a maximum 50-day period, starting no earlier than 60 days before the expected delivery date. The work capacity of the person is decreased by at least a quarter due to pregnancy.
Parental Benefits	If a person has to stay away from work to look after a child, they are entitled to parental benefits. This is shared equally between both parents. However, one parent can choose to transfer their benefits to his/her spouse. For a child born from 2002 onwards, the benefits are payable for 480 days. However, if a child is born before 2002, then benefits are payable for 450 days. The benefits can be paid in a lump sum, quarterly or half-yearly basis, or for three-quarters. A 10-day paternity leave along with a temporary parental benefit is granted to a new father. The parents receive a child allowance for their child living in Sweden and under the age of 16. The child allowance ceases when the child reaches the age of 16, but is replaced by the extended child allowance if the child still attends compulsory school. A childcare allowance is offered if the parents are looking after a sick or disabled child. In case the parents are not living together, the parent not living with the child must contribute to the care of the child by paying maintenance. Maintenance support is payable until the child reaches the age of 18 years.
Disability Allowance	This benefit is provided to people between the ages of 19 and 65 years. It is payable to a person who is not able to perform his/her daily tasks due to injury and needs extra help. If any person is severely disabled and needs personal nursing or attention to manage their daily affairs, they are eligible for attendance benefits. A car allowance is given to people who are not able to commute personally or by using public transport because of a disability. If any injury occurs in the work place, then the insured person is eligible for occupational injury insurance.
Occupational Injury Insurance	If any person is injured at work or on their way to/from work, they are entitled to this insurance benefit. It also covers any diseases arising from an unsuitable work environment. If a person is earning less than their previous salary due to injury, then they are entitled to annuity compensation. In case of a death in the work place, the compensation is as follows: The surviving spouse and child (under age of 18) will be eligible for an annuity The annuity amount depends upon the income of the deceased The survivors also receive compensation for funeral expenses
Activity Grants	If a person is participating in any labour market program such as employment training, occupational rehabilitation, and practical job experience, they are entitled to receive an activity grant. The grant is generally equal to the daily benefit the person would have received from their unemployment insurance fund and is payable for five days a week. The activity grant is taxable.
Housing Allowance	A housing allowance is available to families with children and also young people without children aged between 18 and 29 years. To receive the allowance, the person must be living and registered in Sweden. The allowance amount is calculated on the basis of the size of the household, income, housing costs and the size of the accommodation. Families with children may receive a separate grant for children living at home and an access allowance [umgängesbidrag] for children who sometimes live at home.
Insurance Against Sick Pay Costs	As an employer, if the total wage costs for a calendar year are not expected to exceed 130 price base amounts*, one can insure himself against sick pay costs. Compensation is also paid for the costs incurred through contributions to the Social Security Contributions Act, the Wage Tax Act and also the Special Wages Tax (Certain Acquired Instruments) Act.

Source: Forsakringskassan - Social Insurance

* The price base amount is an amount established by the Government for one year at a time on the basis of figures provided by Statistics Sweden [Statistiska centralbyrån]. It is adjusted annually. When Försäkringskassan calculates, for example, the amount of your pensions, sickness benefit and allowances, it makes use of the price base amount.

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5 Free Trade Zones in Sweden

In order to encourage investors to establish business operations in Sweden, the National Board for Industrial and Technical Development (NUTEK) and various regional development funds offer loans at favourable rates. The regional support programs include location and employment grants, low rent industrial parks, and economic free zones. In addition to the Swedish government offering a range of incentives for research and development programs, there are several European funds that offer subsidies for establishing enterprises in Sweden.

In Sweden, there are foreign trade zones with bonded warehouses in the ports of Stockholm, Goteborg, Malmo, and Jonkoping. Though these goods cannot be consumed or sold on a retail basis, they can be stored without customs clearance. However, these goods can be used as material for industrial operations within a free trade zone. The tax and labour laws are the same in free trade zones as they are in other workplaces in Sweden.³³

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6 Opening a Bank Account in Sweden

6.1 Introduction

In Sweden, the financial market accounts for 4.5 per cent or more of the country’s total output, expressed as its GDP. Nearly two per cent of Sweden’s work force (about 100,000 people) is employed in the financial industry.

There have been major changes in the Swedish banking sector. Sweden’s major banks are involved in the life insurance business. Increasingly, branch offices are in decline since customers prefer conducting their daily banking operations via the Internet and using cash/debit cards and credit cards in chain stores. Mutual funds and insurance savings have developed into major forms of savings.³⁴ As of 31 December 2009, total bank deposits for the general public was estimated at EUR 242.2 billion (SEK 2,296 billion), of which households accounted for 43 per cent, followed by companies (27 per cent), local governments (4 per cent), and foreign owned (20 per cent).³⁵

The Swedish banking sector consists of four major categories: Swedish commercial banks, foreign banks, savings banks and co-operative banks. As of December 2009, Sweden had a total of 117 banks. Table 11 gives a detailed breakdown of these.

Table 11: Number of Banks in Sweden

TYPE OF BANK	NUMBER (AS OF DECEMBER 2009)
Swedish commercial banks	32
four big banks	4
former savings banks	13
other Swedish commercial banks	15
Foreign banks	30
subsidiaries	3
branches	27
Savings banks	53
Co-operative banks	2
Total	117

Source: Banks in Sweden - Facts about the Swedish banking market

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The major functions of a Swedish bank are as follows:

To accept deposits and provide credit to the public

To set the bank interest rates for deposits and credit in accordance with money market rates

To provide a means of payment i.e. payments are transacted quickly, safely and at low cost

To provide risk diversification options to corporate and retail customers

Finansinspektionen (the Swedish Financial Supervisory Authority) and the Riksbank (the Swedish central bank) are responsible for overseeing the financial sector in Sweden and maintaining financial stability in the country.

Under the jurisdiction of the Finance Ministry, the Finansinspektionen aims to ensure financial stability, the efficiency of the financial system and to promote consumer protection.³⁶ The Riksbank is Sweden’s central bank, founded in 1668. The responsibilities of the bank are as follows:^{37 38}

Maintaining price stability with a stable monetary policy

Promote a safe and efficient payment system.

Issuing banknotes and coins and ensuring they maintain their value over time

Manage Sweden’s gold reserves and foreign currencies

Ensure inflation is low and stable

Table 12: List of Major Swedish Banks

NAME OF BANK	WEBSITE
Handelsbanken	www.handelsbanken.se
Swedbank	www.swedbank.se/english
Nordea Bank	www.nordea.se
Skandinaviska Enskilda Banken (SEB)	http://taz.vv.sebank.se

Source: Riksbank - Stress Test of European Banks

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6.2 Banking Laws

The various banking laws in Sweden are discussed in Table 13 below:

Table 13: Banking Laws

ACT	DEFiNiTION
Banking and Financing Business Act	The act encompasses the business of banks and financing companies. It contains rules such as the requirements for a license to conduct banking and financing business and cross-border operations.
The Capital Adequacy Act	The act lays down the rules to ensure that banks and credit market companies have enough capital to withstand potential risks during operations. The act also discusses the method of calculating capital requirements based on the type of assets, commitments and investments of the financial institutions.
Consumer Credit Act	The act lays down the rules that a credit institution should observe when offering loans to consumers. The various aspects included in this act are interest rates, method of preparing a credit agreement, and the responsibilities for handling a lost credit card.
The Covered Bond Act	Provided the bonds have preferential rights on the assets of the issuing institution and that these assets meet certain criteria, banks and credit market institutions can issue covered bonds according to the act.
The Act on Payment Transfers	The act states the type of information that needs to be given to a customer with regard to payment transfers within the EEA.
The Act on Deposit Guarantee Scheme	The act guarantees every customer an amount equivalent to EUR 50,000, but at least EUR 52,750 (SEK 500,000), for deposits in banks. The guarantee covers losses in connection with the bankruptcy of a bank.
The Act on Money Laundering	According to the act, banks, credit market institutions and other companies are forbidden to take part in money laundering. The institutions are obliged to report suspected money laundering or the financing of terrorism to the police.
Other Acts	There are many other laws covering the banking industry. Another important act is on the market for financial instruments. The act lays down the guidelines for organising and running investment firms. Under this act, the Markets in Financial Instruments Directive (MiFID) has been implemented.

Source: Banks in Sweden - Facts about the Swedish Banking Market

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6.3 Procedure for Opening a Bank Account

In order to open a bank account in Sweden, a person needs a personnummer, the Swedish identification number. This provides a proof of residence in the country. To receive the personnummer, a person must register as a Swedish resident at the local Skatteverket (tax office). A bank account can be opened by visiting a local bank branch with a Swedish identification number.

In case the applicant does not have a personnummer, it is feasible to open a non-resident bank account, subject to that specific bank’s policies. However, small bank branches may not provide such an option. After completing the procedure, the applicant receives a debit card (Betalkort) in approximately one week. Most banks offer online banking services, with Sweden having one of the highest rates of online banking in the world.³⁹

The documents a person is required to produce in order to open a bank account are as follows:⁴⁰

Co-ordination number/Swedish personal number

Passport

Letter of acceptance/student card

Swedish personal ID cards are issued by the Swedish Tax Agency. Most credit cards are accepted in Sweden. While opening a Swedish account, the applicant gets an IBAN number and SWIFT number, which make it possible for them and family members to easily transfer money from a home bank account to the Swedish bank account. Hence, the use of traveller’s or bank cheques becomes redundant.

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7 Recruitment of Local Staff

7.1 Employee Rights in Sweden

The Swedish government ensures a healthy working environment for employees. It governs and regulates various laws for protecting workers’ rights. There are powerful labour unions and supportive employers that help employees in Sweden.⁴¹

7.1.1 The Collective Rights of Employees⁴²

In Sweden, businesses have a collective agreement with various labour unions. A collective agreement ensures equality in wages, working hours, sickness leave and injury benefits etc. Swedish trade unions negotiate with employers to ensure a common set of rules that are applicable for all employees.

7.1.2 The Work Environment Act⁴³

The Work Environment Act ensures a safe working environment for employees is maintained. The act includes measures to restrict workplace hazards, prevent accidents and protect the physical and mental health of employees. Employers are responsible for planning and implementing various precautionary measures to avoid injuries and employees must abide by the safety measures. According to the act, a person less than 16 years old can be employed but not in hazardous conditions. Similarly, children under the age of 13 can only do work that does not involve physical or mental strain.

7.1.3 Labour Law⁴⁴

A number of labour laws exist to ensure that employees are not dismissed without proper notice and to protect employee rights. Some of the main laws include:

The Employment Protection Act

This act ensures job security for employees. An employer cannot dismiss any employee without prior notice. Generally, a one to three month notice in advance is given to an employee. If a permanent employee is being dismissed, then they are entitled to a guaranty priority for re-employment up to 9 months after their dismissal.

The Employment (Co-Determination in the Workplace) Act

Under this act, employers should provide regular information about the company’s financial performance as well as current policies to trade unions.I Employers must also provide information related to any restructuring plans.

The Trade Union Representatives (Status at the Workplace) Act

This act aims to ensure the job security of trade union representatives and the ease at which they can perform their trade union duties. It also guarantees wage and employment benefits to representatives, and dismissal is forbidden in cases where the representative is necessary at the workplace.

7.1.4 Anti-discrimination Laws⁴⁵

Swedish law discourages discrimination on the basis of ethnicity, religion, gender, age, sexual orientation or functional disabilities and their beliefs and appearance, both in public and the work place. The Discrimination Ombudsman (Diskrimineringsombudsmannen) or DO, the central government authority, is responsible for ensuring equality. Employees have the right to report any discrimination they are facing in the work place.

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7.2 Ministry of Employment, Sweden

Established in 2007, the Ministry of Employment is a section of the government (which includes the Prime Minister’s office, 12 ministries and an office for administrative affairs). The Ministry consists of four divisions and two secretariats. The secretariat is responsible for legal issues, activity planning, support and coordination of administrative and personnel issues, organisational issues, the budget, external and internal information and coordination of cross-division issues. The roles for each of the four divisions are as follows:⁴⁶

The Division for Labour Market - Responsible for the development of labour market policy

The Division for Labour Law and Work Environment – Responsible for worklife and handling issues related to the work environment, working hours, wages, etc.

The Division for Research and Analysis – Responsible for overseeing the developments in the labour market and for providing insights and reports

The International Division – Responsible for coordinating international issues

The Ministry of Employment is responsible for the labour market and working life policy in Sweden.⁴⁷

Labour Market Policy⁴⁸

The goal of the Labour Market Policy is to ensure full employment. The policy covers various benefits such as compensation in the event of unemployment, employment services, labour market policy programs, the job and development guarantee, new start jobs and the European Social Fund. The objectives of the policy are as follows:

Improve the functioning of the labour market

Permanently raise employment levels in the long term

Match the requirements of those seeking work with those seeking employees

More attention and resources are directed towards those who are most distant from the labour market

Ensure that unemployment insurance serves as a readjustment insurance

Working Life Policy⁴⁹

The objective of a work-life policy is to ensure good working conditions and opportunities for development at work for both women and men. The other objectives of the policy are as follows:

Promote a work environment that prevents ill health and accidents

Build a work environment so individuals respect each other’s conditions and assist in the development of both individuals and enterprises

Labour legislation that lays the foundations for a working life that meets both employees’ and employers’ needs for flexibility, security and influence

Wage structure should be consistent with both a macroeconomic balance and industrial peace

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7.3 Major Recruitment Agencies and Websites

Job vacancies can be found through job websites, recruitment agencies, and newspapers (popular ones are Dagens Nyheter, Svenska Dagbladet and Dagens Industri). In Sweden, networking and personal contacts are increasingly becoming a popular way of finding employment.

The Swedish Employment Service (Arbetsmarknadsverket) lists the major vacancies and provides other support and information.⁵⁰

Table 14 lists the major recruitment agencies in Sweden and their websites.

Table 14: Major Recruitment Agencies and Websites

TOP RECRUITMENT AGENCIES	WEBSITES
TEMP-TEAM AB	www.temp-team.se
Manpower Sweden	www.manpower.se
Adecco Sweden	www.adecco.se
Uniflex	www.uniflex.se
Poolia	www.poolia.se
Proffice AB	www.proffice.com

Source: Swedish Staffing Agencies; JuhlerGroup

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7.4 Average Salary

Tables 15–19 below provide information regarding the median salaries in Sweden by job type, employer type, city, industry and major subject:

Table 15: Median Salary by Job in Sweden in 2010

Job	MEDIAN SALARY (EUR)
Project Manager – Information Technology	49,794.60
IT consultant	37,713.50
Researcher, Scientist	34,072.20
Software Engineer	33,276.70
Postdoctoral Research Associate	31,468.70
Senior Software engineer/ Developer/ Programmer	43,977.60

Source: PayScale - Salary Survey for Country - Sweden - 2010

Table 16: Median Salary by Employer Type in Sweden in 2010

EMPLOYER TYPE	MEDIAN SALARY (EUR)
Company	41,121.00
Hospital	28,096.70
Private Practice/Firm	40,751.70
Government State and Local	31,581.80
College/University	37,317.30
Contract	29,048.30
Other Organisation	27,838.20
Government – Federal	39,064.50
School/School District	28,532.10
Non-profit Organisation	35,227.00
Franchise	38,730.60
Self Employed	24,888.50
Foundation/Trust	34,860.00

Source: PayScale - Salary Survey for Country - Sweden - 2010

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Table 17: Median Salary by City in Sweden in 2010

CITY	MEDIAN SALARY (EUR)
Stockholm	40,658.6
Gothenburg	41,674.9
Malmo	35,373.9
Gothenburg (Göteborg)	32,558.1

Source: PayScale - Salary Survey for Country - Sweden - 2010

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Table 18: Median Salary by Certification in Sweden in 2010

DEGREE/MAJOR SUBJECT	MEDIAN SALARY (EUR)
Certified Professional Engineer (PE)	40,275.50
Microsoft Certified Professional (MCP)	34,971.60
Project Management Professional (PMP)	62,687.40
Microsoft Certified Systems Engineer (MCSE)	38,880.60
Cisco Certified Network Associate (CCNA)	33,020.50
Project Management Certificate	60,674.00
Business Certificate	36,631.10
Sun Certified Java Programmer (SCJP)	39,711.50

Source: PayScale - Salary Survey for Country - Sweden - 2010

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Table 19: Median Salary by Industry in Sweden in 2010

INDUSTRY	MEDIAN SALARY (EUR)
Software Development	37,474.30
Information Technology Services	41,124.10
Software Development	37,474.30
Education, College/University	44,610.80
Telecommunications	43,682.90
Consultancy	38,335.20
IT Consulting	43,469.00

Source: PayScale - Salary Survey for Country - Sweden - 2010

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8 Taxation^{51 52}

The Minister of Finance is responsible for tax policy and legislation in Sweden. The Swedish tax system is administered by the Swedish Tax Agency along with other agencies such as the Enforcement Authority (collection of tax in arrears), Customs (VAT, customs and excise duties on imports from countries outside the European Union), district courts (stamp duty), the National Road Administration (road vehicle tax) and certain other agencies.⁵³

Various taxes levied on corporate entities and individuals are detailed in the forthcoming sections.

8.1 Corporate and Branch Profits Tax

The corporate tax is applicable on:

Worldwide income of companies resident in Sweden. i.e. those companies registered in Sweden for tax purposes.

Profits from business operations taking place in Sweden through a branch or an agency.

Royalties received from Swedish licensees since it is an income from a permanent establishment situated in Sweden.

The tax may be reduced or waived in cases where Sweden has tax treaties with other countries. The calendar year is treated as the fiscal year in Sweden and the assessment year is the calendar year following the applicable financial year. The corporate tax rate for 2010 is 26.3 per cent. The corporate tax rate has been lowered from 28 per cent to the current tax rate on 1 January 2009.

The tax on capital gains is exempted for Swedish limited liability companies on the sale of shares in non-listed Swedish or foreign companies, as of 30 June, 2003. In case of shares in listed companies, an exemption from tax on capital gains is applicable when the company holds at least 10 per cent of the voting power and the shares are held for a minimum period of one year.

For branches, the taxable trading profit and capital gains are calculated by the same method as the Swedish resident companies.

Tax Rates and Important Dates

A uniform tax rate of 26.3 per cent is applicable for companies. Tax returns must be filed annually and should be submitted by 2 May every year. As discussed above, while the fiscal year in Sweden is the calendar year, a financial year can also end on 30 April, 30 June or 31 August, after seeking due permission from tax authorities.

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8.2 Sales Tax/Value Added Tax (VAT)

This is applicable only to domestic sales of all goods and services in Sweden and not on exports and EU sales. The general rate of VAT for goods and services in Sweden is 25 per cent of the assessed value. However, certain goods and services are either exempted from VAT or the rate of VAT on such goods is reduced to 12 per cent (for foodstuffs) or 6 per cent (for transport of passengers). Applicable from 1 January 2008, VAT can be reported on a quarterly basis. Table 2 provides an overview of VAT as applicable for various product categories in the country.⁵⁴

Table 21: Depreciable Assets and the Respective Tax Rates

Items	VAT
General rate	25%
Food, hotel accommodation and camping	12%
Newspapers, books, magazines, public transport, sporting events and certain cultural activities	6%
Medical and dental care, social services, banking and financial services	Nil

Source: Tax Rates – Sweden Tax Rates

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8.3 Social Security Contributions⁵⁵

Employers make social security contribution to employees based on remuneration. In Sweden, the contribution made by an employer on behalf of an employee is 31.42 per cent (2010). For 2010, the total social security contribution for individuals between the age of 18 and 25 was reduced to 21.30 per cent.

8.4 Other Taxes

Table 21 lists other significant tax categories.

Table 21: Other Important Tax Categories

TAXES	DESCRIPTION
Stamp Duty	Levied on the transfer of real estate or mortgage loans Rate is 3% for real estate Rate ranges between 0.4% to 2% for mortgage loans
Real Property Tax	The rates of real property tax vary from 0.2% to 2.2%. This tax is deductible on calculating corporate tax liability. A property fee instead of the tax is paid to the municipality.

*Real property Tax has been replaced with fee payable to the local municipality effective 1 January 2008

Source: Deloitte- Sweden Highlights 2010

In Sweden, no Fringe Benefits Tax (FBT) and local taxes are applicable to companies.

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8.5 Determining Taxable Income

Taxable income is calculated on the basis of financial accounts and is determined using the accrual basis of accounting. The taxable income is income earned minus allowable deductions.

Depreciation and Amortisation

According to accounting principles, equipment and machinery are fully depreciated in the year of acquisition if the value is less than EUR 2,257.70 (SEK 21,400) or has an economic life of three years or less.

Table 22: Depreciable Assets and the Respective Tax Rates

ASSET CLASS	TAX RATES (2009)
Machinery and Equipment	30% (as written in books) 20% (straight-line depreciation) 25% on the residual net tax value
Intangible Assets	Same as above
Buildings	1.5% to 5% (annual straight-line basis)

Source: Sweden Tax Guide 2010

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Taxation on Dividends

Generally, the dividends received by a Swedish company from another Swedish company are exempted from tax, as long as the shareholding is business-related. However, a tax of 26.3 per cent (for 2010) is levied on dividends that are not tax-free.

8.6 Corporate Groups

In Sweden, although consolidated tax returns cannot be filed, profits may be transferred among entities in a Swedish group of companies by group contributions. The pre-conditions for group contributions are:

The companies should not be an investment company. They should be registered in the European Union (EU) and taxed in Sweden.

In the entire fiscal year, the parent company must hold more than 90 per cent (directly or indirectly) of the shares in the group company.

8.7 Withholding Tax

No withholding taxes are imposed on interest, royalties and rent paid from Sweden to other countries.

If dividends are paid to a non-resident shareholder then a withholding tax of 30 per cent is charged. However, these rates may be limited by double taxation conventions. Withholding tax on dividends is exempted under the following situations:

When dividend payments are made to a company resident within the EU, who owns 10 per cent or more of the voting power in the distributing company;

Dividend payment to a company resident in a non EU-country. However, the receiver should be taxed in the country where it is a resident and should hold 10 per cent or more of the voting power in the distributing company for one year.

8.8 Personal Taxation

Residents and non-residents have to pay taxes on their worldwide income and capital gains. Individuals pay both national income tax and municipal income tax. Individual income is categorised as business income, employment income and capital income.

Personal taxes will be applicable to a non-resident if:

The person is regarded as resident in Sweden.

The person has an essential connection to Sweden.

The person is residing in Sweden for a period 183 days or more during the tax year.

While calculating taxable income, all remuneration received from employers (cash or in kind), pensions, and unemployment benefits are included while certain costs such as travelling costs between work and home can be deducted. Table 23 below gives the tax rates at various income levels:

Table 23: Income Tax Slabs

INCOME EUR (SEK)	NATIONAL INCOME TAX (2010)	MUNICIPAL INCOME TAX (2010)
More than 39,256.6 (372,100)	20%	Average municipal tax rate is 31.56% and is levied on total taxable employment income minus personal allowance.
56,199.9(532,700) or above	25%

Source: Deloitte- Sweden Highlights 2010

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Dividends and interest income are taxed at a flat rate of 30 per cent. The same tax rate is applicable to capital gains. The standard rate for stamp duty (levied on purchasers upon the transfer of property) is 1.5 per cent of the transfer value of the property. A stamp duty of 2 per cent is levied on the value of real estate mortgage.

The social security contribution by self-employed individuals amounts to 29.71 per cent (for 2010). A pension insurance fee of 7 per cent is also levied for employment income up to EUR 43,505.80 (SEK 412,377). Another noteworthy point is that spouses and children are taxed separately for income tax purposes.

8.9 Treaty and Non-Treaty Withholding Tax Rates

Sweden has entered into about 70 multilateral or bilateral double- taxation conventions with other states. The tax rates in these conventions are subject to change.

For more details on countries that Sweden has agreed tax treaties with, please refer to the Sweden Tax Guide 2010.

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9 Appendix

TYPE OF ORGANISATION	ADDRESS	CONTACTS	WEBSITE
Ministry of Employment	NA	Tel: +46 (8) 405 10 00	www.sweden.gov.se/sb/d/8517
Ministry of Finance	SE-103 33 Stockholm	Tel: +46 (8) 405 10 00	www.sweden.gov.se/sb/d/2122
Ministry for Foreign Affairs	SE-103 39 Stockholm	Tel: +46 (8) 405 10 00	www.sweden.gov.se/sb/d/2085
Ministry of Health and Social Affairs	SE-103 33 Stockholm	Tel: +46 (8) 405 22 00	www.sweden.gov.se/sb/d/2113
Swedish Embassy in Luxembourg (Ambassade de Suède Bruxelles)	Consulate General of Sweden c / o Banque Carnegie Luxembourg S.A. Central Europe 5 Place de la Gare L - 1616 Luxembourg	E-mail: sweconlux@carnegie.lu Tel: + 352 26 64 61	www.swedenabroad.com/luxembourg
Belgium Embassy / High Commission / Consulate for Sweden	Box 1040 101 38 Stockholm	E-mail: stockholm@diplobel.fed.be Tel: +46 (8) 534 80 200	www.diplomatie.be/stockholm
Bolagsverket (Swedish Companies Registration Office)	SE-851 81 Sundsvall Sweden	E-mail: bolagsverket@bolagsverket.se Tel: +46 (6)0 18 40 00	www.bolagsverket.se/in_english
Försäkringskassan	NA	E-mail: kundcenter@forsakringskassan.se Tel: + 46 771 524 524 (Customer care number)	www.forsakringskassan.se/sprak/eng/
Ministry of Justice	SE-103 33 Stockholm	Tel: +46 (8) 405 10 00	http://sweden.gov.se/sb/d/584
The Swedish Institute (SI)	Slottsbacken 10 Box 7434 SE-103 91 Stockholm SWEDEN	E-mail: si@si.se Tel: +46 (8) 453 78 00	www.si.se
Swedish Migration Board (Migrationsverket)	NA	Tel: +46 771 235 235 (Customer care number)	www.migrationsverket.se/info/start_en.html
Embassy of the Grand Duchy of Luxembourg in Sweden	Tel : +45 35 26 82 00 Fax : +45 35 26 82 08	Mr. Pierre-Louis LORENZ (Ambassador) E-mail: copenhague.amb@mae.etat.lu	www.mae.etat.lu

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11 Disclaimer

The Government of the Grand Duchy of Luxembourg declines all responsibility regarding the use of information featured in this document. The contents are provided for information purposes only. They contain information which is not necessarily complete, exhaustive, precise or up to date. In the event of discrepancies between the texts of this publication and the original documents, the original documents as officially published shall apply. This publication may refer to external sites over which the Government of the Grand Duchy of Luxembourg has no control and for which it declines all responsibility.

JANUARY 2011

 

Luxembourg for Business
19-21 Boulevard Royal
L-2914 Luxembourg
Grand Duchy of Luxembourg
info@luxembourgforbusiness.lu
www.luxembourgforbusiness.lu

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