Foreign investors who come to Sweden must decide upon one type of company from the structures that are mentioned in the company law. They have to think it through so that the company they set up suits their field of activity and their objectives.
Different types of companies are subject to different rules for taxation, registration and financial reporting and auditing compliance. Choosing between the different types of companies in Sweden can depend on the number of investors who wish to start the business, the available capital, the future plans for expansion as well as other criteria.
In this article, our team of company formation agents in Sweden lists the main business types and their most important characteristics. Investors who wish to know more about each business form, or those who are interested in changing the form of the company, can reach out to our incorporation experts for personalized assistance. Businessmen who need company formation and legal services in Finland, can receive help from our partners – LawyersFinland.com.
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The main types of companies in Sweden
When choosing between the available business forms, investors will have to select between:
- Limited company: formed by at least one investor, it is one of the most commonly chosen business forms by both local and foreign investors;
- Limited partnership: formed by at least two individuals or companies, one of the partners is fully liable;
- Trading partnership: also incorporated by at least 2 individuals or companies; both partners are liable;
- Sole trader: the simplest business form, and also the one with unlimited liability, it is formed by only one person;
- Economic association: incorporated by at least 3 companies or individuals; the founders are not personally liable.
Please read below a brief description of the types of companies in Sweden:
The limited liability company in Sweden
Usually, this type of company is the first option for the majority of the foreign investors. It is a type of business that can be set up by one or more natural persons or legal entities. The minimum share capital required is 25,000 SEK and it is divided into shares. However, these shares cannot be sold on the stock market.
The limited company can enter into agreements and debts in its own name, as it has legal personality. The personal liability of the founders is limited to the amount they invest in the share capital.
The company is registered with the Swedish Companies Registration Office and the Swedish Tax Agency. It is managed (represented) by a board of directors and it is taxed on its profits (it is subject to the corporate income tax). As far as the annual reporting obligations are concerned, the limited company submits an annual report and appoints an auditor.
Trading partnership in Sweden
Setting up a partnership in Sweden requires at least two partners, who can be either individuals or legal entities. No minimum capital is necessary for establishing a partnership in Sweden. The liability of the partners is general and fully shared to the extent of their initial contributions in the partnership. It is registered with the Companies Registration Office and the Tax Agency.
Limited partnership in Sweden
Limited partnerships are rather similar with general partnerships in Sweden. At least two members must set up a partnership and there is no required capital. The difference is that at least one member has to have general liability and at least one member is a limited partner, with liability to the extent of their own contribution. The partners are subject to tax on their respective profits.
Sole proprietorship in Sweden
This business form is incorporated by only one person, who is the owner. The businessowner is personally fully liable for the company’s obligations. No minimum capital is required in order to set up a sole proprietorship in Sweden. It is taxed on its income from business and has to submit only the annual accounts.
Different types of companies have different processing times when registered with the Companies Registration Office. The examples below can be useful for investors who wish to know what to expect when they open a company in Sweden:
- – 16 days for the registration of a new limited company;
- – 8 days for changing the address of a company;
- – 29 days for changing the boards of directors or the partner in an existing company.
The estimated times includes the working days from the date on which the application is submitted, the processing phase, the registration phase as well as the period that may be needed for the applicant to submit additional datils. Our team can give you more information, and assist you, so that the initial submission includes all of the needed documents and details, thus reducing the processing time to the minimum working days applicable in your situation.
Regardless of the business form you choose to register, our team can help you open a company in Sweden. You should answer a number of important questions before you start the incorporation phase, and our team is here to assist you during the initial stages. We also offer complete guidance to foreign citizens who wish to start their business in Swede, as different rules may apply in their case.
Fees for company formation in Sweden
When opening a company the registration fees are an issue that should be taken into account. The list below includes the fees for part of the types of companies in Sweden that were in force at the time this article was written, as expressed by the Swedish Companies Registration Office. For updated information, as well as details about other fees, please do not hesitate to reach out to us.
- – 2,200 SEK: the fee for registering a limited company; additional fees are levied when changes are made to the company, for example, changing the business name has a fee of 1,500 SEK;
- – 1,400 SEK: the registration fee for a sole trader; when the founder wishes to apply for a secondary business name he will need to pay an additional fee of 1,100 SEK; the same registration fee as for the sole trader applies in case of a limited partnership or a trading partnership;
- – 2,000 SEK: the registration fee for a branch in Sweden, a bank branch or the branch of a foreign company;
- – 1,000 SEK: this is the fee for registering an European Economic Interest Grouping; our team of company formation agents in Sweden can give you more details.
Please keep in mind that these fees can be subject to change, as previously noted. Moreover, these are only part of the fees levied by the Swedish Companies Registration Office. Others include those for making changes to the address, the articles of association, the company officials, as well as for dissolving the company.
After investors analyze the characteristics of the available types of companies in Sweden and decide to incorporate, they will need to not only go through with the incorporation process, but also apply for special permits and licenses, as they are imposed by the Swedish Government for the particular industry in which the company, partnership or sole trader will activate in. You can reach out to our team of company formation agents in Sweden for assistance during this step.
Regardless of the type of company you choose to open in Sweden, it will be subject to corporate taxation. Payroll in Sweden is not a separate tax, nonetheless, an employer does need to pay other employee-related taxes, the social security contributions. These have variable rates, according to the age of the employee. A minimum social security charge applies and it can be credited against other income taxes.
Choosing the right company form is one of the key steps for investors in Sweden. Our team can help you decide and incorporate. We offer complete formation services, throughout the essential registration steps. Contact us for more information on the types of companies in Sweden and for more details about our incorporation services.