Company formation in brief

In the variety of legal and organisational forms of companies permitted to be established by the law in Sweden, foreign investors may have practical interest in such as:

• Aktielbolag - limited liability company
• Handelsbolag - unlimited liability partnership
• Kommanditbolag - limited liability partnership
• Ekonomisk förening – economic association


Limited Company (Aktielbolag - AB) may be established by one shareholder (physical or legal person, resident or non-resident of Sweden) both as private and public company and is characterised as follows:

• minimum charter capital of a private company is SEK 100’000 (€ 1 is approximately SEK 9.4);
• minimum charter capital of a public company is SEK 500’000.
• charter capital may be paid both in cash and in other property items. At the time of registration, a company has to provide either a bank guarantee that the amount required for paying up the charter capital is deposited on a special bank account, or an auditor’s letter confirming that the charter capital is paid up with another type of property;
• The Swedish corporate law provides for a hierarchical scheme of managing a company headed by the general shareholders’ meeting. The annual general shareholders’ meeting elects the Board of Directors and the Managing Director, approves the company’s financial statements, adopts regulations on financial policy, share issue, charter capital reduction and increase, etc.;
• company is managed by the Board of Directors composed of at least 3 persons (the Swedish law does not provide for any corporate directors) of any nationality, residents and non-residents of the European Union; however, directors - non-residents of Sweden should have a Swedish postal address which, in practice, is quite simple to be registered;
• if the company’s capital is less than SEK 1’000’000, the Board of Directors may be composed of one director and one deputy director. If the managing director is a non-resident of Sweden, the deputy director should be a local resident and act as a registered agent (delgivningsbar person) for contacts with the regulatory authorities of the country;
• if the company’s capital is more than SEK 1’000’000, at least half of the Board members should be residents of the European Union;
• directors are personally liable for due and lawful management of the company’s affairs;
• company should have at least one accountant and an auditor certified in Sweden for auditing and signing financial statements to be filed each year.


General Unlimited Partnership (Handelsbolag - HB) and Limited Partnership (Kommanditbolag - KB) are established by at least two partners (physical or legal persons – residents or non-residents of Sweden) who are not required to input any minimum capital at the time of establishing, and are characterised as follows:

• general partners bear unlimited liability for the partnership’s debts and obligations;
• other partners’ liability is limited within their share in the partnership.
• partnerships are managed by general partners (of any nationality, residents and non-residents of Sweden);
• partnerships in Sweden should have an accountant who is responsible for auditing and signing annual financial statements. Partnership has to carry out an audit each year if it has more than 10 employees, and in some other cases, for example, if its partners are legal entities.

Since a Swedish limited partnership is a practical tool used in the international tax planning, here are some more details of this Swedish entity’s organizational and legal form.

All partnerships are registered with the Swedish Companies Registration Office – the State department at the Ministry of Industry of Sweden.

The partnership’s charter does not need to be registered by the State authority but may be certified by notary and apostilled.

Partnership’s activities described in the Certificate of Registration (Transcript) may not be abstract, such as, trade, services or investments; they should be attributed to actual future work areas, for example, car trade, air transportation, building materials production, etc.

Regardless of who is appointed and authorised as partnership’s manager, the general partner has also to sign all documents related to the partnership’s financial and economic activities.

Names of managers, directors and attorneys may be recorded in the Transcript of the Partnership upon request. The Transcript also includes charter capital data, names and addresses of general and limited partners.

A partnership may have a mailbox address in Sweden but if it needs to obtain a VAT number, the tax authorities may require that the office be registered at the actual address.

All partnerships are required to file an income tax return each year with the Swedish tax authorities and financial statements with the Swedish Companies Registration Office.

It takes approximately 4 weeks to establish a partnership in Sweden.

Ekonomisk förening

Economic Association (Ekonomisk förening) is a specific form of Swedish legal entity comparable to open cooperative undertaking which is established by at least three physical or legal persons (residents or non-residents of Sweden). Associations may not use the word "bank" in their names but may include in their names such words as "Credit Union", "Savings and Credits", "Trust", "Savings Fund", etc. in any language.

Association members’ liability is limited within their share of capital determined by the members.

Association may conduct any activity permitted by the law, including investment and financial activity, and, in particular, may accept deposits and issue loans to its members.

Association members may be required to pay an annual fee to the association by its statutory documents. In practice, anyone may become a member by filing an application and paying a relevant entrance fee. Each member has a voting right at the general meeting.

Given their economic activity and operating risk, associations may be required to be audited and to provide the audit report which, after filing with the regulatory authorities of Sweden, becomes available to all third parties concerned.

All Swedish companies are required to have only a registered address in the Kingdom rather than a rolled out office but if a company needs to obtain a VAT number for its operations, it needs to have a rolled out office in Sweden.

In Sweden, companies and associations pay income tax at a rate of 28%.  

Capital gains are also charged with income tax if the capital has been invested in the business.

Dividends are included in a shareholders’ income and charged with income tax.

Turnover of almost all types of goods and services is charged in Sweden with VAT at a general rate of 25%.

Sweden is not a tax heaven or offshore jurisdiction, and a concept of Sweden tax exempt company (and/or Sweden international business company (IBC), offshore company, trust, foundation etc. registration) does not exist in Sweden as such. A company formation in Sweden could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Sweden. To set up a company in Sweden is possible by correspondence, but to open a bank account in Sweden will, most probably, require a personal visit.

Sweden Double Taxation Agreements

Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bermuda*, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, British Virgin Islands, Bulgaria, Canada, Cayman Islands, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Faroe Islands, Finland, France, Gambia, Georgia, Germany, Guernsey, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Kazakhstan, Kenya, Korea, Kosovo, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mauritius, Mexico, Montenegro, Namibia, Netherlands, New Zealand, Nigeria, Norway, Pakistan, Philippines, Poland, Romania , Russia, Saudi Arabia, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Switzerland, Taiwan, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, USA, Venezuela, Vietnam, Zambia, Zimbabwe.

99 classical offshore, onshore and midshore jurisdictions of Europe, America, Middle East, Asia, Africa and Oceania


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