Doing Business in Sweden: Overview | Practical Law

Doing Business in Sweden: Overview | Practical Law

A Q&A guide to doing business in Sweden.

Doing Business in Sweden: Overview

Practical Law Country Q&A 6-500-6169 (Approx. 27 pages)

Doing Business in Sweden: Overview

by Helena Lindbäck, Cecilia Kindgren-Bengtsson, Anna Romell Stenmark, Johan Norderyd, Mikael Wärnsby, Hugo Norlén and Bengt Bolin, Advokatfirman Lindahl KB.
Law stated as at 01 Sep 2021Sweden
A Q&A guide to doing business in Sweden.
This Q&A gives an overview of key recent developments affecting doing business in Sweden as well as an introduction to the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities. The article also summarises the laws regulating employment relationships, including redundancies and mass layoffs, and provides short overviews on competition law; data protection; and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency; and intellectual property rights over patents, trade marks, registered and unregistered designs.


1. What is the general business, economic and cultural climate in your jurisdiction?


Sweden is a market-based mixed economy with a large tax financed sector.

Dominant Industries

Large industries involve Volvo and Volvo Cars (vehicles), Ericsson (telecom), Skanska (construction), Scania (buses and trucks). Sweden also has a number of prominent tech companies, like Klarna and Spotify, medical companies like Astra Zeneca and a large number of medium-sized life sciences companies.

Population and Language

Sweden had a population of around 10.4 million people in March 2021 (according to Statistics Sweden (SCB)). The spoken language is Swedish but most Swedes are also fluent in English.

Business Culture

Sweden has a strong culture of meeting, largely due to the tradition of striving towards consensus before decisions are made. In general, office hours are 9am to 5pm, but there are of course variations between different companies. Public holidays include days around Christmas, New Year, Easter, 1 May, Ascension Day, National Day, Midsummer's Day and All Saints' Day. In addition to public holidays, people typically have five or six weeks of paid vacation each year.
2. What are the key recent developments affecting doing business in your jurisdiction?

Key Business and Economic Events

Needless to say, the Covid-19 pandemic has had a huge effect on Swedish society, causing great challenges for some businesses (such as hotels, restaurants and the entertainment and travel industry), leaving some businesses relatively unaffected and creating opportunities for others.

Political Events

General elections will be held in Sweden on 11 September 2022.

New Legislation

There have been a number of laws passed due to the Covid-19 pandemic, for example, mitigating its effects on businesses in Sweden and laws enabling the authorities to issue rules and recommendations aimed at limiting the spread of the virus.

Legal System

3. What is the general legal system in your jurisdiction?
The legal system in Sweden is based on statutory law, supplemented by case law and legislative history. It is fair to say that Sweden has a strong civil law tradition, but with influences from common law systems. EU law has a major influence on the legal system. Some EU legislation has direct effect and some is implemented through Swedish legislation.

Foreign Investment

4. Are there any restrictions on foreign investment, ownership or control?

Government Authorisations

Authorisations from central or local governments are normally not required.

Restrictions on Foreign Shareholders

In general, Sweden imposes no restrictions on foreign investments or foreign shareholders.

Restrictions on Acquisition of Shares

Specific Industries

In certain sectors, conditions aimed at limiting foreign ownership can be imposed as a requirement for obtaining the necessary permits (for example, for authorisation to supply or manufacture military products). In public limited liability companies there are notification obligations that apply in relation to transactions, but these are not specific to foreign shareholders.
5. Are there any restrictions or prohibitions on doing business with certain countries, jurisdictions, entities, organisations or individuals?
The sanctions that apply in Sweden have been adopted by the United Nations or the EU. Sweden does not have any of its own, nationally-adopted, sanctions. For information on current sanctions, see
6. Are there any exchange control or currency regulations or any registration requirements under anti-money laundering laws?
There are no specific foreign exchange controls or currency restrictions in Sweden. There are, however, laws preventing money laundering and terrorist financing, as well as reporting and declaration requirements associated with capital movement and the import and export of currency. A Swedish entity's beneficial ownership must be reported and registered with the Swedish Companies Registration Office (Bolagsverket).
7. What grants or incentives are available to investors?


There are a number of incentives available to both Swedish and foreign owned companies, including:
  • Financial incentives (such as loans and grants).
  • Favourable tax regimes (such as tax relief for foreign experts and key personnel).


See above, Grants.

Foreign Investors

Financial incentives are available to foreign investors.

Business Vehicles

8. What are the most common forms of business vehicle used in your jurisdiction?

Main Business Vehicles

The most common form of business vehicle used in Sweden is the limited liability company (LLC) (aktiebolag). An LLC can be either private or public, and a private LLC is by far the most common form. The reasons for the popularity of LLCs are several, and include:
  • Shareholders generally bear no personal liability for the LLC's obligations.
  • An LLC is easy to establish and a widely recognised form of vehicle.
Two other commonly used business vehicles in Sweden are the general partnership (handelsbolag) and the limited partnership (kommanditbolag).
The concept of a trust is unknown in the Swedish legal system.

Foreign Companies

Foreign companies generally use an LLC (see above, Main Business Vehicles).
9. What are the main formation, registration and reporting requirements for the most common corporate business vehicle used by foreign companies in your jurisdiction?

Registration and Formation

An LLC is formed by one or more natural or legal persons (founders). Since 1 August 2014, there are no requirements relating to the founders' legal domicile.
The following are the main measures that must be taken to form an LLC:
  • The founders must prepare a draft memorandum of association (stiftelseurkund).
  • One or more founders must subscribe and pay for all the shares in the LLC.
  • The founders must prepare, date and sign the memorandum of association.
  • The board of directors must apply for registration of the LLC with the Swedish Companies Registration Office (Bolagsverket).
The LLC is formed when the memorandum of association has been signed, but the formation lapses if registration does not take place within six months from the signing date.
The processing time for registering a new LLC is usually short. For current processing times, see
The company name must be distinct from other previously registered names in the companies register or the branch register that are still in force.
The company's name must include the Swedish word Aktiebolag or the abbreviation "AB". A public company's name must also be accompanied with the abbreviation "publ" unless the company's name contains the word publikt.
For more information on registration and formation requirements, see
As an alternative to forming an LLC in accordance with the above, it is also possible to acquire an "off the shelf" company (lagerbolag) from a number of different suppliers. Some of these suppliers can deliver a company within hours from placing of the order.

Reporting Requirements

An LLC must file an annual report (in Swedish) with the Companies Registration Office within seven months of each financial year end. If the annual report is incomplete or filed too late, late filing penalties can be issued.
The annual report must include the following:
  • A profit-and-loss account.
  • A balance sheet.
  • Notes on the accounts.
  • A directors' report.
Depending on the type and the size of the LLC, additional information may be required to be given in an annual report.

Share Capital

Public LLCs must have a share capital of at least SEK500,000 and private LLCs must have share capital of at least SEK25,000. There is no maximum share capital.

Non-Cash Consideration

Shares can be issued for non-cash consideration in connection with the formation of an LLC or if the board or the general meeting of shareholders in an LLC resolves to issue new shares if (among other things) an auditor issues a statement that satisfies several requirements, including that the non-cash consideration:
  • Has been conveyed to the company.
  • Is, or may be assumed to be, of benefit to the company's operations.
  • Has not been reported in the memorandum of association or resolution to issue new shares at a higher value than the actual value of the company.

Rights Attaching to Shares

Restrictions on Rights Attaching to Shares. Restrictions on rights attaching to shares must be stated in the LLC's articles of association (articles). The articles can include restrictions relating to the transfer of shares (for example, pre-emption rights or post-sale purchase rights). The articles can also stipulate that different classes of shares will have different rights to the company's assets or profits and/or carry different voting rights.
Automatic Rights Attaching to Shares. The principal automatic rights attaching to shares in an LLC are financial rights, such as the right to receive dividends and the right to receive remaining assets on liquidation, and administrative rights, such as the right to vote at shareholders' meetings.
10. What is the standard management structure and key liability issues for the most common form of corporate business vehicle used by foreign companies in your jurisdiction?

Management Structure

Every private limited liability company (LLC) must have a board of directors comprising one or more members. The board of a private LLC can appoint a managing director. The board of directors of a public LLC must have at least three members, and a managing director must be appointed.
If the board of directors consists of more than one member, one of the members must serve as chairman. Where the board of directors has less than three members, there must be at least one alternate.
In the private sector, local employee organisations bound by collective bargaining agreements with the LLC can appoint:
  • Two employee board members (with two alternates) in companies with 25 or more employees.
  • Three employee board members (with three alternates) in multi-sector companies with 1,000 or more employees.
The employees' right to board representation must not result in the number of employee board members exceeding the number of other board members.

Management Restrictions

A legal person cannot be a member of the board. The managing director of a public company cannot concurrently hold the position of chairman of the board. A person who does not intend to participate in the activities incumbent on the board of directors cannot be appointed to the board of directors without an acceptable reason.
A majority of the directors, as well as the managing director, must be resident within the EEA, unless an exemption is granted by the Companies Registration Office.
The following cannot serve on the board or as managing director:
  • A minor.
  • A bankrupt.
  • A person for whom a guardian has been appointed.
  • A person who has been prohibited from trading.

Directors' and Officers' Liability

The directors and the managing director are liable for damages if they wilfully or negligently cause the company loss or damage when performing their duties.
The directors and the managing director are also liable if a shareholder or any other person incurs loss or damage as a consequence of a director's or the managing director's violation of:
  • The Swedish Companies Act.
  • The articles of association.
  • The applicable legislation on annual reports.

Parent Company Liability

As a general rule, a parent company has no liability for the debts and obligations of its subsidiaries. However, the Swedish Supreme Court has (in a few cases) allowed for a "piercing of the corporate veil" and held the parent company responsible for its subsidiary's liability. Circumstances that the court has deemed significant in such cases include instances where the subsidiary has been undercapitalised and controlled by the parent company to such an extent that the subsidiary has lost its independence from the parent company.


11. What are the main environmental regulations and considerations that a business must take into account when setting up and doing business in your jurisdiction?
The main environmental statues under Swedish law are laid down in the Environmental Code (1998:808), as supplemented by ordinances issued under the Code. The Environmental Code compiles the bulk (but not all) of Sweden's environmental legislation.
Outside the Code, there is other important legislation with environmental relevance, for example the:
  • Minerals Act (mining).
  • Planning and Building Act (zoning and building permits).
  • Nuclear Activities Act and the Radiation Protection Act (which regulate nuclear facilities and other sources of radiation).
  • Electricity Act and Natural Gas Act (which regulate electricity and gas networks).
These laws often set out the application of certain individual provisions of the Environmental Code, for example, the procedure for an environmental impact assessment, which often comes into play in projects that are not otherwise regulated by the Code (for example, the construction of an electricity network or a pipeline).
EU law has a significant, and continuously growing effect in the field of Swedish environmental regulation, in the form of both regulations and directives.
Court practice and precedent cases from the Land and Environmental Courts also have a significant role in the forming Swedish environmental law. The Land and Environmental Courts are regional (there are currently five), which handle a variety of environmental law matters, sometimes as appeal bodies, sometimes as licensing boards, and sometimes as civil courts for environmental third party claims. Rulings by the land and environmental courts can be appealed to the Superior Environmental Court, which is a permanent branch of Sweden's oldest court institution, the Svea Court of Appeal (Svea hovrätt). In a few instances, Sweden's high court (Högsta domstolen) can also adjudicate environmental law cases.
The Environmental Code consists of different types of provisions. Its general rules apply to all kinds of activities and operators. The provisions encompass the general rules of consideration, basic provisions on management of land and water, and so-called environmental quality standards. For specific matters, such as environmentally hazardous activities, water operations, contaminations and waste management, a set of detailed additional rules also apply (see below).
The provisions of the Environmental Code are supervised by authorities on a municipal or regional level, which are entitled to request information or to issue corrective orders, or in some instances, prohibitions. Other rules, as well as permits and permit conditions, are subject to administrative charges or criminal sanctions if not adhered to.


Companies that establish a business that entails activities that are classified as "environmentally hazardous" must, before any construction or operation, either notify the supervisory authority (a municipal board or regional county administrative board), or apply for a permit which is assessed and granted by a regional county administrative board or regional environmental court, all depending on the nature and size of operations in question. A general permit requirement also applies to so-called water operations, in simplified terms all construction work or other operations that are carried out in, or which affect, surface water or ground water.
A permit under the Environmental Code is typically issued with a number of conditions (for example, covering emissions and noise) within the scope of which the activity in question must be carried out. In return, the permit essentially protects the operator from any claims or actions due to disturbances caused by the activity, provided that the activity is carried out in compliance with the conditions of the permit.
There are also other operations that need an environmental permit or a notification outside (or in addition to) the requirements of the Environmental Code, such as the handling of certain explosives or flammable goods, chemicals, transporting hazardous goods or searching for certain minerals.
Permits for environmental hazardous activities or water operations under the Environmental Code are freely transferable in connection with a sale and purchase of the business (irrespective by way of shares or by way of assets), subject only to a notification to the supervisory authority whereby the new operator can be duly identified.
Other kinds of permit are personal, in the sense that the suitability of a new operator must be re-assessed (and permission granted by a public authority), for example, in connection with a transfer of the business to a new operator. This is, for example, the case in relation to permits under the Radiation Protection Act, the Minerals Act or the Act on Combustibles and Explosives.

Environmental Liability

The operator of a business or other kind of activity is liable for any pollution or contamination of land, water or buildings deriving from its operations (the "polluter pays" principle). In relation to historic contamination, in simplified terms, this means that a person or entity who carries out or has carried out an activity or has taken measures that have contributed to contamination damage will be liable for remediating land/water/buildings which have been contaminated. All operators who have contributed to the contamination will be jointly and severally liable, although a "rule-of-reason" provision may limit the individual liability of each identified person or entity – taking into consideration when the contaminating measure occurred, the contribution of each liable operator, and the environmental standards at the time when the polluting measure was undertaken.
In some circumstances, a developer can also be held liable (as an operator) for remediation, if the developer's measures (for example, digging or excavation works) entail the spread of contamination. A developer can be considered an operator even if the measures are temporary or simply made to remediate the area and thus aim to reduce the environmental impact.
If no operator exists (who can perform or pay for remediation), any acquiror of real property may face liability for investigation and remediation of contamination, provided that no due investigation (which may include drilling and chemical analyses) was carried out prior to the acquisition, and that the acquisition in question was made after 1 January 1999. Therefore, a person or entity that intends to acquire a commercial property in Sweden will have a far-reaching incentive to carry out a proper environmental investigation prior to an acquisition.
In addition to the public law rules described above, Swedish law also contains specific provisions on third party environmental liability. A specific feature of these rules is that the person or entity for which this liability can arise (operators or property owners) are subject to strict liability, that is, negligence or intent need not be proved in order for the liability to arise.


Laws, Contracts and Permits

12. What are the main laws regulating employment relationships?
The main laws regulating employment relationships include:
  • Employment Protection Act (1982:80). This provides most employees with extensive protection.
  • Co-Determination Act (1976:580). This sets out rules on collective bargaining agreements (CBAs), and negotiation and information requirements between employers and trade unions.
CBAs play an important role in the Swedish labour market.
Provisions in an employment agreement will not be valid, to the extent that they revoke or restrict rights and obligations under the Co-Determination Act, or an employee's rights under the Employment Protection Act. Certain exemptions apply with regard to CBAs.

Foreign Employees

National or EU legislation on the posting of workers applies when Swedish employers send Swedish employees to the EEA/Switzerland, or when foreign employers send employees to Sweden.

Employees Working Abroad

The above laws generally do not apply to Swedish employees working abroad for non-Swedish companies.

Mandatory Rules of Law

There are mandatory laws mainly related to minimum vacation, working time and illness. Among these the more important laws are the Annual Leave Act (1997:480), the Working Hours Act (1982:673) and the Act (1991:1047) on Sick Pay.
13. Is a written contract of employment required?

Main Terms

It is not necessary for an employment contract to be made in writing, but employers must give employees written information about the essential terms of their employment no later than one month after the employee starts work. Certain information must be provided to the employee in writing under the Employment Protection Act, for example notice of dismissal and notice of non-extension of fixed term contracts.

Implied Terms

Important implied terms following from case law includes the employer's managerial prerogative, the employee´s corresponding obligation to work and the parties' duty of loyalty towards each other.

Collective Agreements

Employers bound by a collective bargaining agreement (CBA) must offer the benefits provided for under the CBA to all employees, even those who are not members of any union.
14. Do foreign employees require work permits and/or residency permits?

Work Permits

The general rule is that non-EU citizens must obtain a work permit and a residence permit from the Swedish Migration Agency to work in Sweden, but exceptions apply. The application fee is normally SEK2,000. Employers who employ non-EU citizens must notify the Swedish Tax Agency.
The turnaround time for applications varies substantially depending on the line of trade. Some applications can take three months to process, while others can take up to 30 months. For estimations of the relevant processing times, see

Residency Permits

See above, Work Permits.

Termination and Redundancy

15. Are employees entitled to management representation and/or to be consulted in relation to corporate transactions (such as changes in control, redundancies and disposals)?
The Co-Determination Act requires employers to inform and negotiate with any unions to which the employers are bound under a collective bargaining agreement (CBA).
Employers who are not bound by a CBA must negotiate with the relevant union(s) before, for example, making any decisions on redundancy.
Employees may be entitled to board representation (see Question 10, Management Structure).
16. How is the termination of an individual's employment regulated?


The Employment Protection Act outlines two acceptable causes for termination:
  • Reasons relating to the employee personally.
  • Redundancy (see Question 17).

Fair Dismissal

Just cause for termination due to personal reasons requires the employee to have considerably misbehaved. Case law provides guidance as to what constitutes misbehaviour. Termination for personal reasons cannot be based solely on circumstances that have been known to the employer for more than two months.
An employer must take certain measures before terminating the employment, including:
  • Investigating if the employee can perform other work within the organisation.
  • Notifying the employee's union (which is entitled to consult with the employer).
Statutory Minimum Notice. The statutory notice period is one to six months, depending on the length of employment.
Severance Payment. There are no legal requirements on severance payments or garden leave. Immediate termination through summary dismissal may be warranted where the employee has grossly disregarded his or her obligations to the employer. The employer must give the employee notice of dismissal or termination in writing, including certain procedural information.

Unfair Dismissal

An employee can contest an unjustified termination/dismissal in court and apply for revocation and damages up to an amount equivalent to 32 months' salary.

Class of Individuals

Discrimination against certain groups of employees is prohibited through the Discrimination Act (2008:567).
17. Are redundancies and mass termination regulated?

Redundancies and Mass Termination

Employers are generally free to decide that a certain number of employees will be terminated due to redundancy. However, which employees can be terminated is governed by the Employment Protection Act. The general rule is that the last person employed must be the first to be terminated, but exceptions apply.

Procedural Requirements

Before deciding to downsize, employers must inform and negotiate with the local trade union(s) and consider whether the redundant employee(s) can be relocated. The employee(s) may also have a preferential right to re-employment during the notice period and for nine months afterwards, if any recruitment takes place during this period.
Redundant employees must be given written notice of termination, including certain procedural information. Provisions on notice period, garden leave, severance payments and damages are similar to termination due to personal reasons (see Question 16).
Employers must notify the Swedish Employment Agency when terminating more than five employees at once, or more than 20 within a period of 90 days.


Taxes on Employment

18. In what circumstances is an employee taxed in your jurisdiction?

Tax Residence

The following are all considered tax residents in Sweden and are liable to pay tax on their worldwide income:
  • Individuals domiciled in Sweden.
  • Individuals who repeatedly spend more than two to three nights per week in Sweden during a continuous six months period (habitual abode).
  • Anyone with an essential connection to Sweden.

Other Methods to Determine Residency

See above, Tax Residence.
19. What income tax, social security and other tax or contributions must be paid by the employee and the employer during the employment relationship?

Tax Resident Employees

A tax resident employee must pay income tax in Sweden on their gross salary (minus any applicable tax deductions).
Income from employment is subjected to local and state tax (adjusted annually). The local tax rates are 29% to 35%, depending on the place of residence. For the income year 2021, state tax is levied with a flat rate of 20% on income exceeding SEK523,200 a year.

Non-Tax Resident Employees

The following income paid to an employee who is resident abroad and works in Sweden for less than six months is subject to a flat rate tax of 25% (Special Income Tax for Non-Residents Act) and deducted by the employer:
  • Income from a Swedish employer.
  • Income from a foreign employer established in Sweden.
  • Fees paid to board members in a Swedish company.
An employee must apply for special income tax at the Swedish Tax Agency for the period of their employment.
As of 1 January 2021, new regulations apply about payment to employees living and working in Sweden when the employer is a non-Swedish enterprise, or is run as a non-Swedish enterprise in Sweden. From 1 January 2021, non-Swedish employers are obliged to deduct tax from salaries and benefits for work carried out in Sweden. The non-Swedish employer must register as an employer in Sweden and declare preliminary tax deductions of 30% in a monthly pay-as-you-earn (PAYE) tax return.


Companies with employees in Sweden must pay social security contributions. This rule applies to both Swedish and foreign companies. The rate is normally 31.42%. However, a general lower rate is applied to foreign companies without a permanent establishment in Sweden (19.8% for 2020 but there are lower rates in certain cases).
Employers who are taxable in Sweden must withhold preliminary income tax and pay monthly social security contributions based on the employee's gross salary until the Swedish Tax Agency's final decision the following year.
From 1 January 2021, non-Swedish employers with no permanent establishment in Sweden will also be obliged to file PAYE tax returns and deduct tax from payments for work carried out in Sweden. The new regulations also apply to work carried out abroad, if it is within the scope of the employer's business in Sweden. A non-Swedish employer that will be making tax deductions must register with the Swedish Tax Agency as an employer in Sweden.
A non-Swedish employer with no permanent establishment in Sweden, must deduct tax at the rate of 30% on any payment for work carried out in Sweden unless the Swedish Tax Agency notifies it that a different tax rate applies.

Business Vehicles

20. When is a business vehicle subject to tax in your jurisdiction?

Tax-Resident Business

A tax-resident company (that is, a public or a private company registered in Sweden), is subject to income tax on its worldwide income as a Swedish legal person. A foreign company can still be considered a Swedish legal person if, for example, it has its corporate domicile or management in Sweden.

Non-Tax Resident Business

Foreign legal persons are taxed on a limited basis in Sweden. Only income related to a permanent establishment in Sweden is taxed as corporate income. However, there are circumstances under which a foreign legal person without a permanent establishment can be subject to withholding tax in Sweden on certain income (for example, in relation to dividends from a Swedish company).
21. What are the main taxes that potentially apply to a business vehicle subject to tax in your jurisdiction?

Corporate Income Tax

All income of a company is categorised as business income. The business income includes capital gains and proceeds from sales. The tax for corporate income is 20.6% on the taxable net result.

Value Added Tax (VAT)

The standard VAT rate is 25%. Reduced rates (12%) apply to hotels and food (not including alcoholic beverages and tobacco) and sports, arts, books, newspapers, and magazines (6%).

Stamp Duties

A standard rate of 4.25% is levied on transfer of real estate to companies. The rate is 1.5% for individuals and certain municipalities. For mortgages, the standard rate is 2%. The rate for corporate mortgages is 1%.

Property Tax

Property tax is levied on certain real estate. The tax rate on the property's assessed tax value is 0.5% for industrial property and 1% for commercial premises.
If a company conducts taxable business in Sweden, it must register for VAT and preliminary tax. In general, taxes are paid monthly.

Dividends, Interest and IP Royalties

22. How are the following taxed:
  • Dividends paid to foreign corporate shareholders?
  • Dividends received from foreign companies?
  • Interest paid to foreign corporate shareholders?
  • Intellectual property (IP) royalties paid to foreign corporate shareholders?

Dividends Paid

For non-resident shareholders, a 30% withholding tax is levied on dividends on shares from a Swedish company. However, there are conditions where dividends can be exempt from withholding tax under Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different member states. A specific anti-avoidance rule applies for withholding tax purposes.
Swedish withholding tax is often reduced or eliminated through double tax treaties.

Dividends Received

A Swedish company must pay income tax on dividends received. However, dividends received on business-related shares in foreign entities regarded as equivalent to Swedish limited liability companies will normally be exempt from income tax.

Interest Paid

Interest payments will not trigger any withholding tax.

IP Royalties Paid

Payments of IP royalties are not subject to withholding tax. However, a foreign recipient of Swedish-source royalties is deemed to have a Swedish permanent establishment and is subject to Swedish income tax on the royalties received.

Groups, Affiliates and Related Parties

23. Are there any thin capitalisation rules (restrictions on loans from foreign affiliates)?
There are no special thin capitalisation rules in Sweden. Notwithstanding this, there are rules limiting the possibility to deduct interest on loans between "affiliated companies" (företag i intressegemenskap). Interest paid on loans is generally deductible for companies taxed in Sweden, but interest expenses on loans received from affiliated companies are not deductible, irrespective of the purpose of the loan (certain exemptions apply). There is also a general interest deduction limitation rule for companies or company groups with a negative net interest in excess of SEK5 million.
24. Must the profits of a foreign subsidiary be imputed to a parent company that is tax resident in your jurisdiction (controlled foreign company rules)?
In certain cases, a foreign subsidiary's profits must be imputed to a Swedish parent company, for example, when both of the following criteria are met:
  • The subsidiary's income is considered to be subject to a low tax regime. In 2021, countries with taxation below 11.33% are considered to be low tax regimes (that is, 55% of the Swedish tax rate of 20.6%).
  • The parent company, directly or indirectly, alone or together with affiliated persons, holds shares representing at least 25% of the subsidiary's capital or votes at the end of the parent company's financial year.
However, there is an exception if a legal person has a true establishment in a jurisdiction included in the EEA, from which commercial activities are conducted.
25. Are there any transfer pricing rules?
The rules on transfer pricing are based on the principles set by the Organisation for Economic Co-operation and Development (OECD) meaning that cross-border transactions between companies that are associated must be carried out on an arm's-length basis. Otherwise, the Swedish company will, under the so-called correction rule, be taxed as if the transactions had been carried out on market terms.
There are formal requirements for Swedish companies with cross-border operations to keep written documentation on transfer pricing in intra-group transactions involving goods, services, intangible assets, and finance. Some relief is granted for small and medium-sized companies. To the extent such companies are involved in transactions of "minor value", the documentation requirements are less extensive. A full set of documentation is, however, always required for the sale of intellectual property (IP) rights.
Multinational groups with revenue in excess of SEK7 billion in the prior financial year must submit a country-by-country (CbC) report in accordance with the final report on Action 13 of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project. Additionally, Sweden has adopted new rules, effective from 1 April 2017, on transfer pricing documentation that are in line with the final report on Action 13 of the BEPS project. The new legislation requires transfer pricing documentation consisting of both master and local files.
Companies with fewer than 250 employees, and either revenues of SEK450 million or less or total assets of SEK400 million or less, are exempt from filing this documentation. Non-significant transactions (SEK5 million or less) are exempt from the documentation requirement.

Customs Duties

26. How are imports and exports taxed?
Imports from outside the EU are subject to customs duty. The rate of customs duty depends on the type of goods and normally varies from 0% to 20%. Goods exported from Sweden are typically not taxed.

Double Tax Treaties

27. Is there a wide network of double tax treaties?
Sweden has an extensive network of double tax treaties on income and capital taxes. A list of current tax treaties, including double tax treaties, can be found at


28. Are restrictive agreements and practices regulated by competition law? Is unilateral (or single-firm) conduct regulated by competition law?

Competition Authority

The Swedish Competition Authority (Konkurrensverket) applies the Swedish Competition Act (2008:579), and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Under the effects doctrine, Swedish competition law may also apply to foreign entities when their behaviour or transactions produce an "effect" within Sweden.
Violations of the Competition Act are mainly sanctioned by:
  • Administrative fines.
  • Orders imposing obligations.
  • Nullity.
  • Damages.
  • Trading prohibitions.
No criminal sanctions apply.
For guidance on competition law, see

Restrictive Agreements and Practices

The Competition Act is based on corresponding EU competition rules. Co-operation (such as agreements or other concerted practices) between undertakings, which aim or have the effect to prevent, restrict or distort competition in the market to an appreciable extent is prohibited. Examples of co-operation that are deemed particularly anti-competitive are:
  • Directly or indirectly fixing prices or other trading conditions.
  • Limiting output (for example, limiting or controlling production, markets, technological development or investment).
  • Dividing markets or sources of supply.
  • Discrimination (for example, applying dissimilar conditions to equivalent transactions with other parties, thereby placing them at a competitive disadvantage).
  • Tie-ins (for example, making the conclusion of contracts subject to acceptance of supplementary obligations that have no connection to the subject of the contracts).

Unilateral Conduct

An undertaking is prohibited from abusing a dominant position on the market. A dominant position means a strong economic position, making it possible for the undertaking to prevent effective competition by acting independently of its competitors and customers and, ultimately, the consumers. A market share exceeding 40% is an indication of a dominant position.
Examples of practices that can be regarded as abuse include:
  • Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions.
  • Limiting output to the prejudice of consumers.
  • Discrimination.
  • Tie-ins.
29. Are mergers and acquisitions subject to merger control?

Transactions Subject to Merger Control

The rules on merger control are to a large extent modelled on EU legislation. A concentration between undertakings may be prohibited if it is intended to significantly impede the existence or development of effective competition in the Swedish market, or a substantial part of it, in particular if it creates or strengthens a dominant position. The competition test used in Sweden corresponds to the "significant impediment of effective competition" test used in Regulation (EC) 139/2004 on the control of concentrations between undertakings (the Merger Regulation).
A concentration is deemed to arise when one of the following happens:
  • Two or more previously independent undertakings merge.
  • Either one or more persons, already controlling at least one undertaking, or one or more undertakings acquire direct or indirect control of the whole or parts of one or more undertakings.
  • On creation of a joint venture, which on a lasting basis fulfils all the functions of an autonomous economic entity.
Notification to the Competition Authority is compulsory when both the following thresholds are met:
  • The combined aggregate turnover in Sweden of all the undertakings concerned exceeds SEK1 billion in the preceding financial year.
  • At least two of the undertakings concerned each had a turnover in Sweden exceeding SEK200 million in the preceding financial year.
  • If the aggregate turnover requirement under the first bullet point is fulfilled, but the individual turnover does not exceed what is laid down in the second point above, the Competition Authority may require a notification if there are particular grounds for doing so. It is also possible to voluntarily notify a concentration, where the turnover requirement in bullet point 1 is fulfilled.
The Swedish rules do not apply if the concentration has a European Community dimension (that is, if it meets the thresholds set out in the Merger Regulation).
The Competition Authority reviews notifications of concentrations and has the power to clear them, either unconditionally or subject to remedies, or to prohibit them. That decision can then be appealed to the Patent and Market Court.

Foreign-to-Foreign Acquisitions

There are no specific rules for foreign-to-foreign transactions under the Swedish merger control rules. Foreign transactions are covered if they meet the relevant turnover thresholds described above (SEK1 billion/MSEK200). It is not required that the undertakings/parties concerned have a physical presence in Sweden. If a foreign party fails to notify a notifiable transaction the Competition Authority may request that it submit a notification, subject to fine.

Specific Industries

There are generally no specific licensing or other similar approval requirements to conduct business locally in Sweden (including to acquire companies). However, certain exceptions apply to specific sectors of the economy, such as insurance, banking/financial services, publicly funded education, broadcasting, certain military equipment and the nuclear energy sector, where additional approvals or licences may be required from sector-specific authorities. However, operators that have been approved by other EU/EEA member states in these sectors may, in certain circumstances, benefit from mutual recognition of their foreign licences.
As an example, if a bank or a credit market company acquires property and the consideration corresponds to more than 25% of the capital base, a permit from the Swedish Financial Supervisory Authority (Finansinspektionen) is required. Under the Radio and Television Act, a party's acquisition of a licence to broadcast television may not be approved by the Broadcasting Authority if the transfer would increase the concentration of ownership of those with licences to broadcast television by more than a limited extent. Under the Nuclear Activities Act, it is prohibited to carry out nuclear activities in Sweden without a specific licence which is granted by the government. If a transfer of ownership of a nuclear plant takes place, the new holder must therefore apply for a new licence to own and operate the plant.

Anti-Bribery and Corruption

30. Are there any anti-bribery or corruption regulations affecting business in your jurisdiction?
The Swedish criminal provisions on bribery are contained in Chapter 10, section 5a–e of the Criminal Code.
A person who is an employee, or performing a commission, receives, accepts a promise of, or requests an undue advantage for the performance of their employment or commission is guilty of taking of a bribe. The same applies to a person who is a participant in or official at a competition about which public betting is arranged, and an undue advantage for their performance of tasks in the competition is involved.
A person who gives, promises or offers an undue advantage is guilty of giving a bribe.
A person may be guilty of trading in influence if they receive, accept a promise of or request an undue advantage to influence a decision or measure taken by someone else in the exercise of public authority or public procurement; or gives, promises or offers someone an undue advantage in order to influence a decision or measure taken by someone else in the exercise of public authority or public procurement.
A business operator who supplies money or other assets to a person representing the business operator in a particular matter and thereby, through gross negligence, promotes the giving of a bribe, or trading in influence is guilty of negligent financing of bribery (section 5d, point 2, Criminal Code).
"Facilitation payments" (small payment to public officials to obtain a service or to speed up a process or a decision) are not exempt from Swedish legislation on bribery.
The criminal liability for bribery is personal. If a criminal offence has been committed, a company can be ordered to pay a corporate fine if it failed to adopt sufficient measures to prevent the offence, or if the offence was committed by a person in an executive position or with specific responsibility for supervision or control in the company. Persons and companies can also have profits confiscated.
For further information and the code to prevent corruption in business, see the website of The Swedish Anti-Corruption Institute, (Institutet Mot Mutor) (IMM), a non-profit organisation founded in 1923,

Intellectual Property

31. What are the main IP rights that are recognised in your jurisdiction?


Definition and Legal Requirements. A patent is an exclusive right for the proprietor to exploit an invention. For a patent to be granted, it must fulfil the following requirements:
  • Novelty (be new in relation to what is known at the time of filing the patent application).
  • Contain an inventive step.
  • Have industrial application.
Registration. National patents are filed and registered with the Swedish Patent and Registration Office. For guidance, see
Enforcement and Remedies. Patents are enforced by the Patent and Market Court and appealed to the Patent and Market Appeal Court. The patent can be enforced by the proprietor of the patent or a licensee. The main remedies available are:
  • Interim and final injunctions under a penalty of a fine.
  • Damages.
  • Criminal sanctions.
  • Orders to provide information.
  • Infringement investigations.
Length of Protection. Protection is granted for a maximum period of 20 years. Supplementary protection for medical patents is possible for up to five additional years.

Trade Marks

Definition and Legal Requirements. Trade marks can consist of any symbol, in particular, words, including personal names, devices, letters, numerals, colours, sound, or the design or ornamental aspects of a product or its packaging, provided that the symbol is distinctive and can be reproduced in the trade mark register in a clear and precise way. Protection can arise either from registration or through establishment in the market.
Trade marks can be registered if they have distinctive character for the goods or services to which they relate, and if no relative or absolute grounds for refusal contained in the Trademark Act (2010:1877) applies.
Protection. National trade marks are filed and registered with the Swedish Patent and Registration Office. For guidance, see
Unregistered marks are only protected if they are established in the market, that is, when they are known to a significant portion of the relevant public.
Enforcement and Remedies. See above, Patents.
Length of Protection and Renewability. A trade mark registration can be renewed indefinitely for consecutive ten-year periods.

Registered Designs

Definition. A registered design protects the appearance of a product but not its function. To register a design the following requirements must be fulfilled:
  • Novelty (no other identical design has been made publicly accessible before the filing date or priority date).
  • Individual character (the overall impression of the design must differ from previously known designs).
  • It must not be governed solely by the technical function of the product.
Registration. National designs are filed and registered by the Swedish Patent and Registration Office. For guidance, see
Enforcement and Remedies. See above, Patents.
Length of Protection and Renewability. The maximum length of protection is 25 years. A registered design must be renewed every five years.

Unregistered designs

Definition and Legal Requirements. There is no specific national legislation covering unregistered designs. An unregistered design under Regulation (EC) 6/2002 on community designs (Community Designs Regulation) is, however, protected without registration.
Enforcement and Remedies. An unregistered community design can be enforced through the Patent and Market Court, which is the designated community design court in Sweden (see above, Patents).
Length of Protection. Protection lasts for three years from the day the unregistered design was made publicly available.


Definition and Legal Requirements. Copyright is granted for literary and artistic works that possess a certain degree of distinctive character and originality.
The proprietor of a copyright can prevent others from making copies of the work and making it available to the public. However, there are some limitations to this exclusive right in the Act on Copyright in Literary and Artistic Works (1960:729).
Protection. Protection arises automatically without registration. Copyrights are not registerable in Sweden.
Enforcement and Remedies. See above, Patents.
Length of Protection and Renewability. Copyright subsists until the end of the 70th year after the year the author passes away or, if there are several authors, after the year the last surviving author passes away. For some neighbouring rights another length of protection applies, for photographs, for example, the protection lasts for 50 years from the date the work was created.


Trade Secrets. Trade secrets are protected under the Trade Secrets Act (2018:558). The Trade Secrets Act entered into force 1 July 2018 further to a partial implementation of the Trade Secrets Directive ((EU) 2016/943). Protection arises automatically and is maintained for as long as the information is kept secret. Unauthorised disclosure can cause both civil and criminal liability.
Trade Names. Trade names (the name under which a trader does business) are protected under the Trade Names Act (2018:1653). Protection is granted by registering the name with the Swedish Companies Registration Office.

Marketing Agreements

32. Are marketing agreements regulated?


Commercial agents are protected by the Commercial Agency Act (1991:351), which implements Directive 86/653/EEC on self-employed commercial agents (Self-employed Agents Directive). The Act sets out certain rights for the agent that cannot be set aside through contractual terms. These rights include a conditional right for the agent to receive severance compensation up to a sum corresponding to one year's remuneration (calculated on the average annual remuneration during the last five years or during the period in which the agent performed the agency, whichever is shorter).
The Act does not set out any specific rules on nationality, exclusivity or registration of the agency.


There is no specific legislation regulating distributorships. It is arguable that provisions of the Commercial Agency Act can be applied analogously.


There is no specific national legislation on franchising except for the Franchise Disclosure Act (2006:484). The Franchise Disclosure Act regulates a franchisor's duty to provide written information to the franchisee before the conclusion of the franchise agreement. However, the Commission Agency Act and the Commercial Agency Act can likely be considered analogously.
There are no requirements to register a franchise in Sweden.


33. Are there any laws regulating e-commerce?
The principal laws on e-commerce are the following:
  • Distance and Off-Premises Contracts Act (2005:59). This contains provisions on consumer protection in conjunction with distance and off-premises contracts.
  • Electronic Commerce Act (2002:562). This imposes minimum levels of information required from internet service providers and regulates online contract formation requirements.
  • Electronic Communications Act (2003:389). This sets out obligations for providers of electronic communications networks and services. It also sets out the requirements for using cookies.
  • Act (2016:561) Laying Down Additional Requirements to the EU Regulation on Electronic Identification. This contains provisions regarding electronic identification schemes and trust service providers and complements Regulation (EU) 910/2014 on electronic identification.
34. Are online platforms regulated in relation to their use for marketing/sales purposes?
Online platforms used by traders to offer goods or services to consumers are subject to the Online Platforms Regulation ((EU) 2019/1150). This Regulation imposes requirements on the general terms and conditions for the services offered, the conditions for restricting, suspending or terminating the services, and on access to data and the ranking of goods or services on the platform.
Compliance with the Regulation is supervised by the Swedish National Board of Trade. The Board initiates consultations with those online platforms which the authority deems to be in breach of the Regulation.


35. How is advertising regulated in your jurisdiction?
The principal legislation on advertising is the Marketing Act (2008:486), which governs advertising and marketing procedures, both business-to-consumer and business-to-business. Specific regulations exist for certain products including tobacco and alcohol.
The Act prohibits the use of unfair marketing practices, such as those that are aggressive or misleading. Use of unfair marketing practices can result in:
  • Injunctions under penalty of a fine.
  • Market disruption charges.
  • Liability for damages.

Digital Advertising

See above, Advertising, and below, Direct Marketing.

Direct Marketing

This is regulated by the Marketing Act (2008:486). With regard to distance direct marketing by electronic means, a company can, in the course of marketing to a natural person, use email or any other similar automatic system for individual communication that is not operated by an individual, only if the natural person has consented to this in advance. However, there are some exceptions to this.
With regard to a company's direct marketing by electronic means to a legal person, there is no specific legislation with the exception that a legal person must, in the same way as a natural person, always have the option of opting out from direct marketing by electronic means.
Distance direct marketing, other than by electronic means, to a natural person is prohibited if the natural person has clearly objected to the direct marketing. There is no specific legislation in regard to distance direct marketing, other than by electronic means, to a legal person.
36. How are sales promotions regulated in your jurisdiction?
The Marketing Act (2008:486) includes rules on the use of expressions such as "sale" (rea) or any other expressions with the same meaning, and rules in regard to clearance sales and sales due to bankruptcy. The general rules of the Marketing Act apply in regard to other promotional methods.

Data Protection

37. Are there specific data protection laws? If not, are there laws providing equivalent protection?

Data Protection Laws

As of 25 May 2018, the main legislative acts on data protection are Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) (GDPR) and the Electronic Communications Act (2003:389).
The Data Protection Act (2018:218) supplements the GDPR. Other laws relevant to the regulation of data protection include the Patient Data Act (2008:355) and the Camera Surveillance Act (2018:1200).
The Electronic Communications Act governs certain data protection matters relating to electronic communications, such as the content of an electronic communication, geo-localisation data and traffic data. The Act mainly applies to providers of electronic communications services and networks, but also governs the use of cookies, among other topics.

Consumer Privacy Laws

Consumer privacy is mainly governed by the GDPR. Laws in other areas may complement the GDPR in a specific area affecting consumers, such as the Marketing Act, the Electronic Communications Act or the Gambling Act.

Product Liability

38. How is product liability and product safety regulated?
Product liability in Sweden is primarily regulated by the Product Liability Act (1992:18), which implements Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the member states concerning liability for defective products (old Product Liability Directive). The Act provides for strict liability for personal injuries and damage to property intended for private use caused by an unsafe product. The primary responsibility under the Act falls on the producer and importer of the product, as well as anyone who has marketed the product under his or her own name or trade mark. A secondary responsibility falls on each distributor/supplier of the product, unless a party with primary responsibility is identified.
Product safety is mainly regulated by the Product Safety Act (2004:451), which is based on Directive 2001/95/EC on general product safety (General Product Safety Directive). Sellers and manufacturers must ensure that products and services do not convey any (or only a low) risk with respect to the health and safety of humans. Sales and marketing of products or services can be restricted or prohibited by a public authority for safety reasons.
In addition, there is special legislation that requires strict liability for certain causes of injury or damage, including:
  • Electricity.
  • Inflammable or explosive goods.
  • Nuclear activities.
  • Activities harmful to the environment.

Regulatory Authorities

39. What are some of the key regulatory authorities relevant to doing business in your jurisdiction?


Main Activities. The Swedish Competition Authority (Konkurrensverket) is a state authority working to safeguard and increase competition and supervise public procurement in Sweden.


Main Activities. Monitoring compliance with environmental rules is mainly carried out by local or regional authorities, either municipal board or the regional county administrative board.
The Swedish Environmental Protection Agency (Naturvårdsverket) is the main national authority for environmental matters. The Agency provides guidelines to regional or local authorities and carries out assignments on behalf of the Swedish Government relating to the environment in Sweden, the EU and internationally.

Financial Services

Main Activities. The role of the Swedish Financial Supervisory Authority (Finansinspektionen) is to promote stability and efficiency in the financial system as well as to ensure sustainability and effective consumer protection.

Companies Register

Main Activities. The Swedish Companies Registration Office (Bolagsverket) creates the conditions needed for establishing trust within the business sector. Bolagsverket registers new companies, changes in company information and annual reports.

Tax Agency

Main Activities. The Swedish Tax Agency (Skatteverket) manages civil registration of private individuals and collects taxes such as personal income tax, corporate tax, VAT and excise tax.

Other Considerations

40. Is there anything else that is important relating to doing business in your jurisdiction?
Not applicable.

Contributor Profiles

Helena Lindbäck, Partner

Advokatfirman Lindahl KB

T +46 70 42 22 847
E [email protected]
Professional qualifications. LLM, Sweden; Swedish Bar Association, 2016
Areas of practice. Corporate finance; capital markets and public M&A; ICT.
Languages. Swedish, English

Cecilia Kindgren-Bengtsson, Partner

Advokatfirman Lindahl KB

T +46 40 664 66 53 (direct) / +46 708 592 507 (mobile)
F +46 40 664 66 55
E [email protected]
Professional qualifications. LLM, Sweden; LLM at the College of Europe, Bruges, Belgium; Swedish Bar Association, 1999
Areas of practice. Employment; commercial dispute resolution.
Languages. Swedish, English
Professional associations/memberships. European Employment Lawyers Association.

Anna Romell Stenmark, Partner

Advokatfirman Lindahl KB

T +46-18-161-863 (direct) / +46-705-261-863 (mobile)
E [email protected]
Professional qualifications. LLM, Sweden; LLM University of Notre Dame, IN, USA; Swedish Bar Association, 2000
Areas of practice. Tax; corporate law.
Languages. Swedish, English
Professional associations/memberships. Member of the board of ISOR, The Institute for Taxes and Rule of Law.

Johan Norderyd, Partner

Advokatfirman Lindahl KB

T +46 40 664 66 56 (direct) / +46 704 32 66 56 (mobile)
F +46 40 664 66 55
E [email protected]
Professional qualifications. LLM, Sweden; Swedish Bar Association, 1998
Areas of practice. IP; life sciences.
Languages. Swedish, English
Professional associations/memberships. International Trade Mark Association; International Association for the Protection of Intellectual Property; European Communities Trade Mark Association; Swedish Society for Intellectual Property; Association of European Trade Mark Owners.

Mikael Wärnsby, Partner

Advokatfirman Lindahl KB

Professional qualifications. LLM, Sweden; Swedish Bar Association 2000
Areas of practice. Energy and environment.
Languages. Swedish, English and German

Hugo Norlén, Partner

Advokatfirman Lindahl KB

T +46 702 718 189
E [email protected]
Professional qualifications. LLM, Sweden; Swedish Bar Association, 2007
Areas of practice. EU and competition: life sciences; intellectual property; public procurement/public sector.
Languages. Swedish, English, Spanish

Bengt Bolin, Partner

Advokatfirman Lindahl KB

T +46 708 161 874
E [email protected]
Professional qualifications. LLM, Sweden; Swedish Bar Association, 1991
Areas of practice. Commercial dispute resolution; life sciences.
Languages. Swedish, English, Russian, French, German