Sweden has a highly developed economy and ranks highly in ease of doing business globally. To operate a business in Sweden, common structures include limited liability companies and branches of foreign companies. Limited liability companies, the most common structure, must register with the Swedish Companies Registration Office and have at least one director and deputy director. Branches require a Swedish manager. Overall, Sweden provides a stable environment and low barriers for conducting business.

1. Doing Business in
Sweden
Sherif Mohamed
Stefan Schübel

2. Agenda
Geography &
History
Demography
Economic Status
Doing Ease of
Business
Business in doing
Entities
Tax Labor Law
Sweden business
Business Culture

3. GEOGRAPHY & HISTORY
3

4. 4

5. Geography
Country
• Size: 450,295 km2
• 3rd largest country of the EU
• Ranked 55 biggest globally
• Divided in 21 counties
Scenery
• 53 % Forest
• 11 % Mountains
• 8 % Cultivated Land
• 9 % Lakes (e.g. Vanern) & Rivers (Ume, Torne, Angerman)
Natural Resources
• iron, ore, copper, lead, zinc, gold, silver, tungsten, uranium,
arsenic, feldspar, timber, hydropower.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 5

6. History
• The Viking era (800-1050 AD).
• Christianity began in the 9th century.
• 14th century it united with Norway
and Denmark.
• Independence from the Danish
occupation in 1523 under Gustav I
Vasa.
• Great European power.
• Neutrality during both World Wars.
• Joined the European Union in 1995.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 6

7. Nobel Prize
• chemist, engineer,
entrepreneur, innovator
• invention of Dynamite in
1867 to be used in mining
• Alfred Nobel formed the
Noble prize due to regrets
of using dynamite in wars
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 7

8. DEMOGRAPHY

9. Demography
General
• Human Development Index: 0.885 in 2010
• Ranked place 9 out of 169
• GNI: $36,936
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 9

10. Demography
Population
• Number inhabitants: 9,433,875
 22 inhabitants / km2
• 90% live in the south
• 85 % live in cities
• Average family: 1.26 children
• Life expectancy men: 79
• Life expectancy women: 83
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 10

11. Demography
Languages
• Total: ~ 200
• Most Common: Swedish, English, Finnish,
all Sami dialects, Torne Valley Finnish
(Meänkieli), Romani and Yiddis
Ethnic groups
• Swedes, Finns, Sami
• Immigrants: Iraquis, ex Yugoslavia
nationals, Somalis, Iranians, Norwegians,
Danes, Turks and Poles
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 12

12. Demography
Religions
• 87 % Evangelical Lutheran
• 13 % Roman Catholic, Orthodox,
Baptist, Muslim, Jewish and
Buddhist
Weather
• Influences: Gulf Stream, Atlantic
winds
• South: temperate
• North: subarctic
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 13

13. Demography
Society
• “Swedish welfare policy”
Large public sector + welfare
system
• “the Swedish model”
• “the third way”
• “ the middle way”
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 14

14. Government
• Constitutional
Monarchy.
• Civil law system is
influenced by the
Roman-Germanic
Authority
law.
Monarch
Legislative Executive Judicial
Branch Branch Branch
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 15

15. ECONOMIC STATUS

16. Economic Status
Currency
• 1873 introduced krona (SEK) = 100 öre
• In 2003 56% of the Swedes denied the
Euro
• 1 Euro = SEK 9.1802
Imports / Exports
• Imports (2010): 106710 million €
• Exports (2010): 113600 million €
• Net Trade of goods: 6890 million €
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 17

17. Economic Status
GDP
• National Accounts of GDP: €
83,250 million
• GDP per Capita: € 35,260
Inflation
• Inflation rate May 2011:
3.3%
• Consumer price increased
by 0.2 %
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 18

18. Economic Status
Labor market
• Employment: 4,606,000 people
• Unemployment: 395,000 people
• Unemployment rate 7,9 %
Interest rate
• Short-term treasury discount
notes: 1.91%
• Long-term government bonds:
3.01%
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 19

19. Economic Status
Main economic activities
• Core industries with high level of
investment:
engineering industries, forestry, information
and communication technology, biotech and
life science industries, environmental
industries and renewable energy and
functional foods
• “Swedish economic miracle”
Biggest companies
• Volvo, Vattenfall, Ericsson, Skanska AB,
SCA, H&M Hennes & Mauritz
• http://www.youtube.com/watch?v=fFHRAuvjOtQ&feature=related
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 20

20. Economic Status
R & D
• Leading position in scientific R &D
• Highest gross expenditures per capita
• Carried out by universities and institutions of higher learning
• Extensive research infrastructure, including science parks, large
universities, research institutes
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 21

21. DOING BUSINESS IN SWEDEN

22. Ease of Doing Business in Sweden
Parameter Rank (2011)
Ease of doing business 14
Starting a business 39
Dealing with construction permits 20
Registering property 15
Getting credit 72
Protecting investors 28
Paying taxes 39
Trading across borders 7
Enforcing contracts 52
Geography & History * Demography * Economic Status * Doing Business in Sweden * 18
Closing a business Business Culture 23

23. Ease of Doing Business in Sweden
To open a business in Sweden:
1. An entrepreneur has to be at least 18 years old.
2. not declared incapable
3. not under bankruptcy quarantine
4. No swedish partner (it depends!!)
5. Check whether license is needed
* You pay less for social contributions and licensing
if you started the business before 26 years old
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 24

24. Business Entities
Business Entities
limited partnership
branch of a foreign
(kommanditbolag-
company (filial)
KB)
limited Liability
Company Others
(aktiebolag-AB)
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 25

25. Business Entities
Limited Liability Company
AB
(aktiebolag-AB)
• most common business structure Public Private
used by foreigners.
• registered at the Swedish Companies Stock No stock
Registration Office (Bolagsverket) market market
• Shares can have a different number 500,000 50,000
of votes depending on if they are A- SEK SEK
or B-shares
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 26

26. Business Entities
Limited Liability Company (aktiebolag-AB)
• A limited company must have at least one director and
one deputy
• Public companies must have at least three board
directors and a managing director. A private company
may appoint a managing director.
• The board of directors is elected annually by the
shareholders at the general meeting.
• The board signs documents on behalf of the company.
• The managing director has to be a resident of the EEA.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 27

27. Business Entities
Branch (filial)
• The manager has to be of legal age, not
declared legally incompetent and a Swedish
citizen
• Branches are subject to specific legal
provisions, unlike representative offices, and
are subject to all aspects of Swedish law,
including tax law.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 28

28. 29

29. Business Entities
Partnership (handelsbolag-HB)
• at least two partners
• The partners are not limited to
natural persons
• the partnership is a qualified legal
entity
• The partnership as such is not taxed.
Instead, the partners are taxed, each
in proportion to his share of income
of the partnership
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 30

30. Taxation
Tax rates are among the highest in the world
(up to 59.09%)
Income tax rate
Company tax is based on net profit taxation
Only national tax is levied on companies
The tax rate for limited companies is 26.3%
VAT (mervärdeskatt)
25% is the general tax rate applied on the sales value, 12% for hotels,
transportation and food, 6% for newspapers.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 31

31. Taxation
Net wealth tax
• From 1st of January 2007 the wealth tax
is abolished
Real estate tax
• local fee
• For commercial buildings there is still
real estate tax between 0.2 % and 1.0 %
Church taxes
• for members of the Lutheran Church of
Sweden
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 32

32. Labor Law
• Security of employment act prevents
arbitrary dismissal.
• Swedish law doesn’t mandate a minimum
wage.
• Board representation for employees.
• Prohibition of discrimination based on
sex, race or religion.
• Promotion of equality.
• Normal working hours are 40 hours per
week and an overtime limit of 200 hours
per year
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 33

33. Labor Law
• Statutory right to five weeks of annual
holiday from the first year of employment,
of which four consecutive weeks can be
taken during the June-August period.
• Dismissal procedure requires 3 steps: (1)
dismissal notification is directed to the
trade union, (2) within a month, the
employee is informed, (3) termination occur
one to six months according to the
employees’ age and number of affected
workers
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 34

34. BUSINESS CULTURE

35. 36

36. Business Environment
• Low level of hierarchy allows a first-
name basis for everyone.
• work attire is often conservative, but
casual.
• Employees and many employers,
often focus on doing exactly what’s
needed and doing it well, rather than
doing unnecessary things (Lagom).
• The managing director of a firm is
more openly available to his or her
employees.
• strong union presence in Sweden.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 37

37. Business Environment
• The Swedes are monochromic people and
expect everything to be planned ahead and on
time.
• Easing the way into a company or into relations
with a company takes time.
• Swedes are not so receptive to new
thoughts/plans if they feel that they are being
forced upon them.
• Swedish culture and work ethic means full
respect between colleagues or business
associates and they are completely intolerant
to disrespect .
• they avoid embellishing their accomplishments.
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 38

38. Thanks for your Attention 39

39. Thanks for your Attention…..