A branch in Sweden allows a foreign company to establish its presence and engage in the same business activities as the head office. Our local incorporation experts can help you open a branch in Sweden.
| Quick Facts | |
|---|---|
| Applicable legislation | The branch is subject to the Swedish laws. |
Best used for | – banks, – financial institutions, – companies that wish to extend and fully control their operations in Sweden |
Minimum share capital | No |
| Time frame for the incorporation (approx.) | 12 days |
| Management | Foreign |
| Legal representative required | Yes, a local managing director |
| Local bank account | Yes |
| Independence from the parent company | No |
| Liability of the parent company | Full liability for the debts and obligations of its Swedish branch |
| Corporate tax rate | 20.6% |
| Possibility of hiring local staff | Yes |
Table of Contents
What are the main features of the branch?
Perhaps the most important issue concerning the branch is the fact that this is not an independent legal entity from its parent company abroad.
Our Swedish company formation agents highlight the following features of the branch:
- Liability: the parent company abroad is fully liable for the debts and obligations of its Swedish branch;
- Assets: the branch does not have its own independent capital. Its assets are part of the foreign company’s total assets;
- Governing law: when a foreign company decides to open a branch in Sweden, this will be subject to Swedish laws and the regulatory principles applicable to the types of activities it engages in the country;
- Representative: the branch will have an appointed representative in Sweden; this will be mentioned in the documentation submitted for registration;
- Accounting: although it is part of the foreign company, the accounts of the Swedish branch will be kept separate from those of the parent company and will reflect its business activities in Sweden.
Companies that choose to open a branch in Sweden will not need to submit a minimum share capital, as would be the case for a subsidiary, for example.
What are the branch registration requirements in Sweden in 2026?
Any new branch of a foreign company in Sweden is registered with the Companies Registration Office (Bolagsverket). This means that the foreign company will need to submit a formal application that will contain a set of mandatory documents. These include the following:
- The foreign company’s registration certificate;
- Its Articles of Association;
- The financial statements for the last two years and proof that the foreign company is not subject to bankruptcy;
- Copies of the identification documents for the branch’s appointed director;
- The filled-in application form and proof of bank registration fee payment.
Once the company is registered, it will receive a corporate identity number, which contains ten digits. This will be used to identify the branch and to communicate with the Swedish authorities.
In addition to the registration with the Companies Registration Office, bank branches in Sweden, as well as those of other financial institutions, are also registered with the Financial Supervisory Authority.
We also invite you to watch a video about branch registration in Sweden:
What are the mandatory requirements for the branch?
When a company chooses to set up a branch in Sweden, it will mandatorily appoint a managing director. He is required to reside in the European Economic Area and, if this is not the case, the branch will apply for an exemption from the residency requirements.
The branch’s managing director is empowered to act on behalf of the foreign company through a power of attorney. The original and a copy of this document are also submitted when registering the branch.
The branch in Sweden will mandatorily have an address in Sweden. The name of the branch will include a word that will clearly indicate its status, “filial”. In the case of bank branches, the name will also include the word “bank”.
The branch will be registered as an employer in Sweden, as well as for tax purposes.
How is a branch taxed in Sweden?
The branch is not a locally registered business; however, it is still subject to taxation in the country. The following tax rates are of interest to investors in Sweden and are applicable in 2026:
- 20.6% corporate income tax rate;
- 30% withholding tax on dividend distributions from Swedish companies;
- Standard 25% VAT and 0%,6%,12% reduced rates for certain types of products and services.
As far as the filing and payment requirements in place for Swedish entities are concerned, we remind investors that in Sweden, there are four different dates on which the annual corporate income tax return is submitted. This depends on the end date of the company’s financial year.
Payroll in Sweden is not in place as a tax, like it might be in other jurisdictions; however, employers will still need to make the majority of the social security contributions for their employees.
The branch keeps its own accounts, separate from those of the foreign parent company. When required, its financial documents can be audited by an authorized public accountant.
The branch files annual reports for the foreign-based company and, in some cases, for its own activities.
Does the branch require special permits?
Yes, in some cases. Foreign companies that engage in economic activities in Sweden through a branch are required to check if their activities are subject to special licensing, approval, and/or control.
When required, special licenses or approvals are issued by the Swedish public authorities, the municipality, or other authorities.
Examples of permits issued by authorities include those for:
- Legal, financial, and administrative services;
- Marine and water management activities;
- Health and social care activities;
- Agriculture and forestry;
- Food production, manufacturing, selling, and others.
What are examples of costs associated with branch creation in Sweden?
Setting up a branch in Sweden will involve a set of mandatory costs, mainly associated with the registration fees and those required to open a bank account for the branch.
Our team offers several types of company incorporation packages. The basic or standard one starts at SEK 35,000 + VAT (about 3,216 EUR) and includes: the name verification, document drafting, capital guidance (optimized for the branch, with information on its general requirements, as a minimum capital is not required in this case), filing with the Bolagsverket, tax basics, and digital delivery.
Please keep in mind that the basic package above can be tailored to suit the requirements of the foreign company expanding to the Swedish market.
Additional services include client guides for setting up a bank account and assistance upon request.
Contact us if you wish to know more about how to open a branch in Sweden in 2026.
In case you want to choose Denmark for opening a company or setting up a branch office, our partners from CompanyFormationDenmark.com are at your disposal.
Similar conditions are in place in other European countries, such as Estonia, etc., and if you want to expand your business in that country, we can put you in contact with our partners. The standard corporate tax rate in Estonia is 22%.
We offer legal services to businessmen who open companies in other European countries, such as Germany, and clients interested in establishing a branch office in a German city should know that the standard company registration timeframe is around 5 weeks.