Doing Business in Sweden

Country profile

Sweden is a constitutional monarchy, situated in the Northern Europe, on the Scandinavian Peninsula. The 450,000 kilometers square of land are bordered by Norway and Finland, but it also has maritime borders with other countries. Sweden has a population of 9,428,054 inhabitants, with 1.8 million people living in the metropolitan area of Stockholm, the capital city. Most of the people are Swedish, but there are also immigrants from Finland, Iran, Iraq, Bosnia, Denmark, Norway, Hungary or Turkey. Other important cities in Sweden include Gothenburg, Helsingborg, Malmo or Kiruna. Swedish is the national language, but most of the people speak English, too. The Swedish Krona (SEK) is the national currency. Sweden is not a member of NATO, but it has a Partnership for Peace signed with the organization. However, Sweden is an EU member, as well as being a member in other international organisations.

Statistics

Sweden has one of the highest rates of life expectancy, but a rather low birth rate.  It has an unemployment rate of 7.7%, according to Eurostat results in March 2011. Its Gross Domestic Product is approximated at 292,684.4 million EUR. As far as the exportation is concerned, Germany is the most powerful European partner with 10% of the exports, after the United States of America. Germany leads the imports rate, too, with 18.7%.

Main industries

Sweden industry is based on iron and steel, precision equipment, forestry, mining, agriculture, processed foods, motor vehicles. Its most valuable natural resources are iron, copper, zinc, gold, silver, uranium, arsenic, timber and hydropower.

Milk products, wooden furniture and paper manufacturing are the most developed fields of industry in Stockholm.

Sweden third’s largest city, Malmo, was once a major center for shipbuilding. Now, due to the existence of the Oresund Bridge that connects Sweden and Denmark, many people from Malmo work in Denmark. Malmo remained as an important educational center, with very attractive Universities for students all over the world.

Gothenburg relates to a strong motor vehicle industry and chemical industry.

Salaries

The state of Sweden is one of the most developed countries in terms of economy, an aspect that reflects in the average salary which is as high as 6,000 EUR. There is no national minimum wage in Sweden.

Main corporate rates

Companies and individual entrepreneurs in Sweden pay a corporate tax based on their annual income of 28%. However, there is the possibility to defer taxation of profit by allocation of 25% of the profit to tax allocation reserves. 

The standard VAT applied in Sweden is 25%. A reduced rate of 12% applies in certain conditions. Foodstuffs or hotels benefit from this reduced rate. An even lower VAT rate of 6% applies for transportations, newspapers and magazines, cultural events. Social services, banking, financial services and few others are exempt from VAT.

Companies pay a 30% withholding tax on dividends in Sweden. However the rate may be reduced where double tax treaties apply.

BridgeWest offers assistance for setting up a company in Sweden, including virtual office and other related services.