Company formation in Sweden

Before deciding to set up a new company in Sweden, read the information below to understand the characteristics of a Limited Liability Company (LLC) / Privataktiebolag (AB):

Shareholders: at least one shareholder.

Director: at least two directors or 1 director and 1 deputy (50% of the management board must be residents of EEA).

Company Secretary: not required.

Minimum Share Capital: SEK 25,000 (~ €2,200).

Legal Address: a local registered office address is mandatory for every Swedish company.

Liability: the shareholders' liability is limited to the amount they have invested in the company.

Accounting: AB must maintain accounting records, adhere to generally accepted accounting principles and make Swedish statutory filings.

The basic CIT rate of general income is 20.6%. It is applied on all income of legal entities, while resident legal entities are liable for tax on their worldwide income unless special exemptions or tax treaties apply, non-resident legal entities are taxed on the income that originates from Sweden.

The PIT rate for residents:

• from SEK 0 to SEK 614,000 - 0% national income tax + 32% municipal income tax;
• over SEK 614,000 - 20% national income tax + 32% municipal income tax.

Non-residents working in Sweden for a Swedish employer or a foreign employer with a permanent establishment in Sweden are taxed a flatPIT rate of 25%.

The standard VAT rate for goods and services in Sweden is 25%.

Reduced VAT rates:

• 12% (e.g. some food items, hotel accommodations, and restaurants);
• 6% (e.g. books, newspapers, passenger transport within Sweden, admissions fees to cultural and sporting events).

Double taxation avoidance agreements in Sweden: Albania, United States of America, Andorra, Anguilla, Antigua and Barbuda, Argentina, Armenia, Aruba, Australia, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Bermuda, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, British Virgin Islands, Brunei, Bulgaria, Canada, Cayman Islands, Chile, Cook Islands, Costa Rica, Cyprus, Denmark, Dominica, Egypt, Estonia, Philippines, Finland, France, Faroe Islands, United Arab Emirates, Gambia, Georgia, Gibraltar, Greece, Grenada, Guernsey, Hong Kong SAR, India, Indonesia, Iraq, Iran, Ireland, Iceland, Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Canada, Kazakhstan, Kenya, China, Kosovo, Croatia, Kuwait, Latvia, Lebanon, Liberia, Liechtenstein, Lithuania, Luxembourg, Macao SAR, Macedonia, Malaysia, Malta, Marshall Islands, Morocco, Mauritius, Mexico, Monaco, Montenegro, Montserrat, Namibia, Netherlands, Netherlands Antilles, Nigeria, Nordic countries, North Macedonia, Norway, New Zealand, Oman, Pakistan, Panama, Peru, Poland, Portugal, Qatar, Romania, Russia, Saint Kitts and Nevis, Saint Lucia, Samoa, San Marino, Saudi Arabia, Switzerland, Serbia, Seychelles, Singapore, Slovakia, Slovenia, Spain, Sri Lanka, Saint Vincent and the Grenadines, United Kingdom, South Africa, South Korea, Taiwan, Tanzania, Thailand, Czech Republic, Trinidad and Tobago, Tunisia, Turkey, Turks and Caicos Islands, Germany, Ukraine, Hungary, Uruguay, USA, Vanuatu, Venezuela, Vietnam, Belarus, Zambia, Zimbabwe, Austria.