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Representative Office in Sweden

Representative Office in Sweden

representative office in Sweden can be used as a first step to enter the market, before a foreign company sets up a permanent establishment in the country. Foreign companies interested in this option should know that a defining trait for this office is that it is only used for non-commercial purposes/non-transactional activities. A liaison office in Sweden can be a suitable way to conduct pre-incorporation market research, to test the Swedish market and its clients, as well as engage in talks with local suppliers, if needed. Our team specializing in company formation in Sweden can assist foreign companies interested in entering the Swedish market, either through a representative office or another business form.

 Quick Facts 
 Characteristics of a liaison office in Sweden It can be used for non-commercial, non-trading activities for companies that wish to test the market first.
Permitted activities


Market research, networking, general liaison, promotional 

 Prohibited activities

Business activities that will generate income. The activities cannot be performed permanently. 

Minimum share capital Not applicable 

 Not subject to tax

Can hire employees (YES/NO) 


 Costs related to opening a Swedish representative office

 Costs related to rent suitable office space, hire staff, engage in promotional activities, etc.


The parent company is liable for the representative office.  

 Physical presence required for opening a liaison office 

 Not mandatory

 Secretary required (YES/NO) No
 Incorporation time (approx.)

 One week

 Other available business forms for a foreign company

Branch, subsidiary

 Converting into a different business form

The representative office cannot be converted. Investors will need to incorporate a legal entity in Sweden.  

Why open a representative office in Sweden 

As a first step before opening a permanent establishment in Sweden, to test the market. 

 Assistance Our company formation agents in Sweden can help you if you wish to set up a representative office.

The main characteristics of the Swedish representative office

The representative office is set up by a company interested in testing the local market. This can be a business-savvy step for foreign companies operating in many different business fields. However, it is important to keep in mind that the liaison office in Sweden has a set of limitations:

  • – it is not a separate business form, and it does not have legal capacity;
  • – the foreign company is liable for the debts and obligations of its Swedish representative office;
  • – it is set up for temporary purposes;
  • – it is not used to generate income;
  • – its activities are limited.

The foreign company interested in opening a representative office in Sweden will need to appoint one or more individuals who will act on its behalf within the office.

The liaison or representative is not a recognized business form and therefore it can only be set up for a limited time (in most cases, for periods that do not exceed one year). During its presence in Sweden, it will not engage in commercial activities (meaning that it will not derive any income from Swedish sources) and it will not be involved in substantial work, other than market research, and similar activities.

Foreign companies are most often inclined to open a branch or set up a company in Sweden in the form of a limited company. If this option is more suitable in your case, our team can give you details about the requirements.

Alternatives to the liaison office in Sweden

Because the representative office is not recognized as a form of setting up a company’s business activities in Sweden, and because such as presence is only present for a limited duration for marketing purposes, companies will commonly open a branch in Sweden if they wish to expand their activities to this Nordic country.

A company that chooses to open a branch instead of a representative office in Sweden will also need to keep in mind that neither the liaison office, nor the branch are separate business forms. The branch will engage in the same business activities as the parent company, and it will be registered with the Swedish authorities as such.

As a general rule, a foreign company can either register a branch in Sweden or conduct its activities through a subsidiary which is a locally registered company (a private or a public limited liability company). In any case, the taxes a branch or a subsidiary is liable for are summarized below by our team:

  • – the 20.6% corporate income tax rate;
  • – 0% withholding tax on dividends paid to residents (a 30% withholding tax can apply to dividend payments to non-residents, unless reduced by a tax treaty);
  • – 25% standard value-added tax and 0%, 6%, or 12% reduced value-added tax;
  • – aggregate social security contributions of 31.42% of the salary (or less, depending on the age of the employee).

Foreign companies operating for a limited time through a representative office in Sweden will not derive income from the country and will therefore not be subject to these taxes. However, once the representative office becomes a permanent establishment (such as a branch), it will have tax liability.

Contact our agents for company formation in Sweden if you are interested in working temporarily via a representative office or if you wish to set up a permanent establishment.