How to start a business in Sweden - a guide for foreign entrepreneurs 1. Residence permit Non-EU citizen First of all, you need to apply for a residence permit as self-employed. You do this at the Swedish embassy in your home country. Requirements: § A commercial evaluation is needed in order to establish that your business plans are realistic and that your business can be expected to achieve satisfactory profitability. § There must be documentary evidence that you have access to the capital needed to establish or purchase a company. § You must be able to support yourself and your family for at least one year in Sweden. § You must supply detailed documentation of your business plans: market forecast, a profit and liquidity budget, a properly budgeted balance sheet, customer references, banking connections, experience in the field. If you have purchased an existing company, you must enclose the two most recent annual reports with your application. EU-citizen You can take jobs and reside in Sweden without restrictions. The same applies to the three nations in the EEA. However, EU and EEA citizens must after three months, register for a residence permit, which will formally record the individual for tax and social benefit purposes. To obtain a residence permit as a self-employed person you must be able to prove your status, e. g. by producing a copy of your company’s certificate of registration/incorporation or your company tax card. Residence permits are granted for five years at a time. The permit certificate will be mailed to your address in Sweden. For more information, including application forms, please refer to: Swedish Migration Board (Migrationsverket), www.migrationsverket.se ISA fact sheet “Visas and work permits”, www.isa.se 2. Company and tax registration Company registration Register your company at the Swedish Companies Registration Office, Bolagsverket. First, you must choose company form, for example sole trader, trading partnership or limited liability company. The application fee for registration varies between SEK 1, 000 and 2,000 depending on company form. The fee must be paid before the application is processed. The registration process takes between four and ten weeks. It is important that you choose a name that is unique for your company. If the suggested name is too similar to other company names already registered, the application process will take longer. For more information on different company forms and how to register, including forms please refer to: Swedish Companies Registration Office (Bolagsverket), www.bolagsverket.se Corporate tax registration When you have received your company registration number from the registration office, you need to register at the tax authorities (Skatteverket) for F-tax form (F-skatt), VAT (moms) and for employer status (if you have employees). The F-tax form shows that you pay your own PAYE (pay-as-you-earn) tax and social security contributions. The tax authorities will estimate your monthly tax according to your stated preliminary income. The form to be filled out is called 4620 “Skatte- och Avgiftsanmälan” (tax and PAYE application). Individual tax/civil registration and personal ID numbers Assuming that you will reside in Sweden for at least one year, you must report to the local tax authority (Skatteverket) to apply for tax/civil registration. After you have registered, you will receive to your mail address in Sweden a personal identification number (personnummer); a number formed from your birth date plus four additional digits numbers. This id number is needed to open up bank accounts, subscription for telephone, etc. For more information, including forms please refer to: The National Tax Board, www.skatteverket.se ISA fact sheet “Taxes in Sweden”, www.isa.se 3. Insurance Social Insurance The Swedish social insurance system is financed predominantly by employer contributions, which is approximately 33 percent of an employee’s gross salary or 30 percent for self-employed. When you have received your personal identification number, you can register for benefits such as health care, dental and medical care, child care allowances at the local social insurance office (Försäkringskassan), unless you want to remain with the social security system in your home country. Self-employed As entrepreneur you have some of the basic insurance cover you would have had as an employee, if you pay a social contribution of 30 percent, but it is a good idea to contact an insurance company for supplementary insurance. Employees The employer’s contribution of 33 percent covers pension, health insurance, parental allowance, occupational-injury insurance for the employee. However, most companies pay fees to additional pension programs and insurance for the employee. For more information, please refer to: Social Insurance Office (Försäkringskassan), www.forsakringskassan.se ISA fact sheet “Labor costs” and “Working in Sweden”, www.isa.se 4. Licenses and permits Anyone is allowed to start business in Sweden, but there might be specific restrictions in your business. Check if you need permission or license for your planned business. Examples: § For Café or restaurant business, turn to the municipality’s health protection department (miljö- och hälsoskyddsförvaltningen). § If you plan to sell alcohol in bar or restaurant, turn to the municipality’s social department. § For medical and paramedical professions, turn to the National Board of Health and Welfare (Socialstyrelsen), www.sos.se/hs/bu/eu/eng.htm. § For banking, financing or insurance business, turn to the Swedish Financial Supervisory Authority (Finansinspektionen) or the corresponding authority in your home country, (www.fi.se). For more information on licenses, turn to Nutek (mainly Swedish): www.nutek.se/foretagarguiden List of Swedish municipalities (Swedish): www.lf.svekom.se/artikel.asp?C=2063&A=5052 5. VAT If you conduct commercial activity and sell VAT-liable goods or services, then you must register with the tax authority (Skatteverket). VAT is a tax that is paid on almost all consumption of goods and services. VAT is actually paid by consumers, but payments to the state are made by companies. VAT is not an expense for those who are to pay it to the state. You must of course pay VAT on your purchases, but in most cases you are entitled to deduct the VAT. You pay the difference between the VAT that you levy on your sales (output VAT) and the VAT that you pay on your purchases (input VAT). If you import goods, you are to pay VAT to the Swedish Customs (Tullverket). Sweden’s Value Added Tax Act is harmonized with the EC VAT directives. Known in Swedish as "moms", the normal VAT rate is 25 percent. However, a reduced rate of 12 percent applies to for example food and hotel charges. A rate of 6 percent applies to personal transportation, newspapers, books and magazines, entrance fees to commercial sport activities and cultural events. Certain services are exempt from VAT, including medical and dental care, social services, banking and financial services etc. For more information, please refer to: VAT brochure 552, www.skatteverket.se Swedish Customs for imports and exports, www.tullverket.se 6. Premises If you need to find office premises or other types of facilities, you can turn to either the municipality’s department for trade, commerce and business development (näringslivs avdelning) or to a local real estate agent. For more information, please refer to: ISA Fact sheet “Real Estate Agents and Brokers”, www.isa.se Swedish municipalities (Swedish), www.lf.svekom.se/artikel.asp?C=2063&A=5052 Bovision is a site with available facilities (Swedish): www.bovision.se 7. Accounting and auditing Auditor If you start a limited liability company (AB) you need to register a chartered and authorized (certified) public accountant or an approved accountant as auditor. Regarding the other company forms mentioned above, this requirement varies according to circumstances (number of employees, turnover, etc.). Bookkeeping/Accounting For all company forms, you need to keep and prepare accounts for your business activities. 8. Residence requirements at company registration Limited company At least half of the board members must be resident in the EU or in the EEA. If none resides in Sweden, the board must appoint a Swedish resident to accept service on the company’s behalf. Sole trader A person living abroad, wishing to have a sole trader company in Sweden without actually living here, must appoint a manager to be responsible for the business in Sweden. Trading partnership There are no residence requirements. Assistance Invest in Sweden Agency is a governmental agency assisting foreign companies considering an establishment in Sweden: www.isa.se; email@example.com. The Entrepreneur’s guide: www.nutek.se/foretagarguiden; firstname.lastname@example.org. See also “Starting a business – this is how you do it”: www.nutek.se/content/1/c4/15/03/startingabusiness.pdf Swedish Center for Entrepreneurs (Jobs and Society) is an organization with local offices around Sweden: www.nyforetagarcentrum.se.