Getting started with a business in Sweden
Starting a business is a challenge for many beginning entrepreneurs in Poland – not to mention in Sweden. In order to fulfil the expectations of Polish companies, we have created an offer fully tailored to their needs. Our Polish accounting office in Sweden provides comprehensive support when it comes to starting a business. We are up to date with Swedish regulations, so we will suggest how to set up a company in Sweden and guide you step by step through the entire registration process.
The lack of familiarity with laws that differ from those in Poland and the language barrier are significant difficulties for Polish entrepreneurs who would like to start a business in Sweden. A Swedish accounting firm serving Polish clients is a guarantee of security when taking your first steps on the local market.
Types of economic activities – Sweden
The available legal forms of economic activities in Sweden are:
- Sole proprietorship (enskild nӓringsidkare) – for its establishment it’s not necessary to accumulate start-up funds or look for partners. The entrepreneur is responsible for the company with all his assets and has no legal personality.
- Limited liability partnership (Aktiebolag, AB) – the company has a legal personality, and its partners are not responsible for its actions with their assets. It is one of the most popular forms of business in Sweden.
- Civil law partnership (enkelt bolag) – a partnership of at least two persons who do not have legal personality and are liable for the company’s actions with their assets.
- Commercial partnership (Handelsbolag, HB) – such a company has a legal personality and is required to prepare annual financial statements.
- Limited partnership (Kommanditbolag, KB) – a company operating as a limited partnership is also required to file annual financial statements.
- Branch (Filial) – thanks to the Foreign Branches Act, it is possible to operate a branch of a Polish company in Sweden. The Swedish law governs a branch, but the branch is not given a separate legal personality. When establishing a branch, it is necessary to establish a director who is also the company’s attorney and to take care of separate accounting.
Other, though less common, types of activities include a business association (ekonomisk fӧrening), a foundation (stiftelse) and a European Joint Stock Company (Europabolag). We support entrepreneurs in choosing the best form of business that suits the type of services provided.
Who can start a business in Sweden?
Starting a business in Sweden is different from registering a company in Poland. A considerable barrier for Polish entrepreneurs is the Swedish official language, which is a challenge even for those who know Swedish at a communicative level. Therefore, it is worth using the help of an accounting firm that knows very well what conditions need to be met in order for the registration of a business in Sweden to proceed correctly and legally.
Poland is a member of both the European Union and the European Economic Area, so Polish emigrants can easily set up a business in Sweden – as long as they have obtained a residence permit and have the necessary resources to live. The residence permit is issued by the Migrationsverket (Migration Authority) for a period of five years. After this time, the Authority analyses the financial situation of the company and upholds or revokes the residence permit in Sweden.
How to start a business in Sweden?
Setting up a business in Sweden consists of three steps:
- The first step is to choose the type of business – we have described all legal forms of business above. We will help you choose the right type of business, paying attention to the entrepreneur’s needs and plans.
- After that, the company must be registered with the Business Register (Bolagsverket) – this obligation is not imposed on sole proprietorships, but it is worth doing in order to reserve the company name.
- After the registration, the company must be reported to the Tax Authority (Skatteverket) – the company is registered as a payer of F-tax (F-skatt), or business tax, as well as VAT (Moms). When hiring employees, it is also necessary to register the company as a Swedish employer. In turn, an entrepreneur who is simultaneously employed by another employer should register as an FA taxpayer (a combination of F-skatt and employment tax).
What obligations does a Swedish entrepreneur have?
Operating a business in Sweden involves complying with Swedish regulations and fulfilling certain obligations.
Such duties of Swedish entrepreneurs include:
- Having a bank account – this is used for company transactions and is especially important for companies, which are required to deposit their initial capital. A Swedish bank account can be opened upon presentation of proof of identity, and those with a personal number can even do so online.
- Entries in registries – this includes the Business Register, the VAT Register and the Swedish Social Insurance Agency.
- Timely settlement of taxes – this applies to advance payments of income tax, VAT and taxes for employees (if the entrepreneur has employees).
- Controlling business transactions – monitoring company payments promotes a transparent financial situation, prevents misunderstandings and facilitates inspections by the Skatteverket.
- Updating data – if company data changes, the entrepreneur is required to carry out an update with all institutions (including the tax office and the bank).
Let us help you set up your business in Sweden
KAM Redovisning AB, an accounting firm based in Sweden, supports Polish entrepreneurs throughout the process of setting up a business. To operate legally in Sweden, you need to register your company as a payer of business tax (F-skatt) and VAT (Moms). Entrepreneurs who will pay contributions in Sweden are also assisted in dealing with the Swedish equivalent of the Social Insurance Institution (Försäkringskassan).
Tax settlement – Sweden
Tax settlement in a country like Sweden requires knowledge of the laws in that country. Working with our accounting firm gives you the assurance that your taxes in Sweden are settled correctly.
Both Swedish entrepreneurs and employees of Swedish companies are required to submit an annual tax return (the equivalent of our PIT return) to the Skatteverket Tax Office. This does not apply only to taxpayers subject to the 25% SINK tax (statlig inkomstskatt för utomlands bosatta), i.e. temporary workers who have not stayed in Sweden for more than 183 days. Others are required to submit the INKOMSTDEKLARATION 1 (INK1) form no later than May 2.
Limited liability companies (AB) and business associations (ekonomisk fӧrening), on the other hand, are required to settle CIT corporate income tax on form INKOMSTDEKLARATION 2 (INK2). Tax settlement in a country like Sweden requires a good knowledge of tax law – so accounting in Sweden is worth entrusting to an experienced company specializing in taxes.
As a Swedish entrepreneur, you are entitled to tax benefits (not applicable to SINK taxpayers). Tax breaks in Sweden include an allowance for expenses on rent and utilities for premises rented for an office, an allowance for transportation to the workplace, an allowance for tools needed to run a Swedish company, expenses for business phone calls, an allowance for the purchase of protective clothing and personal protective equipment, or an allowance for dual households (for regular visitors to Poland). All persons working in Scandinavia for more than 183 days can claim a tax refund in Sweden (not applicable to SINK taxpayers).
The Convention between the Government of the Republic of Poland and the Government of the Kingdom of Sweden dated October 15, 2005, protects Swedish and Polish companies from double taxation, as well as from tax avoidance by Polish and Swedish entrepreneurs.
What taxes in Sweden must an entrepreneur pay?
A Swedish entrepreneur is required to pay two taxes: income tax and VAT. If you employ additional people, you must also pay taxes for your employees.
Income tax in Sweden
When running a business in Sweden, you have to pay taxes. Sweden is a country where every entrepreneur is required to pay income tax at a certain rate. Such a benefit consists of a national tax and a local tax. The latter is paid to the municipality (kommun) and the region (ladnsting) – it is used to fund health care and education, among other things.
Income tax rates depend on two factors:
- Annual income (national tax) – in 2020, the national income tax for income below SEK 490,700 was 0%, while income above SEK 509,300 was taxed at a rate of 20%. Corporate income tax is 28% of company profit.
- Swedish region (local tax) – the rate in different regions varies between 30% and 35%.
VAT in Sweden
Goods and service tax (VAT in Poland, Moms in Sweden) applies to transactions that take place at every stage of production and distribution. It applies to the provision of services, the sale of goods, self-payment and exchange. No later than two weeks before you start your business, you must register your company as a VAT payer. Registration can be done online (skatteverket.se) or by traditional means (form SKV 4620). VAT in Sweden is paid by companies that sell services and goods within the European Union. Among others, companies operating in the medical, educational, banking and financial industries are exempt from paying VAT.
VAT rates in Sweden:
- 25% – basic rate,
- 12% – reduced rate (handicrafts, hotels, groceries),
- 6% – reduced rate (e.g., passenger transportation, books).
VAT in Sweden must be settled once a month, once every three months or once a year – through a VAT return. The frequency of the declaration should already be determined when registering with the Skatteverket. Large companies usually file a return once a month, medium-sized companies file a return once a month or once every three months, and small businesses have complete freedom of choice.
Tax for employees
Poles who are Swedish entrepreneurs and wish to hire employees must be aware of the obligations imposed on them. Employing people from the European Union does not require a work permit, while non-EU employees must contact Migrationverket in advance. As a foreign employer who employs non-Swedish people, you are required to report this to the Swedish Work Environment Authority and the Tax Authority.
The employer-entrepreneur receives PAYE forms every month, which are used to pay contributions, including tax for employees. The employer is required to pay taxes and contributions and make tax deductions from wages and other employee benefits. The total employee contribution amount is 31.42% of the tax base.
A Polish accounting firm in Sweden – represents before the authorities
To do business in Sweden, you do not need to be fluent in Swedish at all. However, a lack of language skills is a barrier – Poles who have ever tried to deal with Swedish offices and institutions know about this. Tax issues and formalities can be confusing, not to mention that understanding the nuances of tax law in a foreign language is simply stressful. Worried about making a mistake that could harm your business? Our Polish tax office in Sweden supports entrepreneurs who need help in dealing with Swedish authorities and institutions.
We specialize in providing comprehensive accounting services. Sweden is a country where we have been operating for more than 15 years, supporting Polish entrepreneurs in their businesses. We represent our clients before the Skatteverket Tax Authority, the Försäkringskassan Social Insurance Agency and other Swedish institutions. Our tax office in Sweden provides a full accounting and tax support, including translation services when dealing with Swedish authorities.
Accounting for companies and handling correspondence
Knowing Swedish is essential for dealing with the authorities. This includes handling tax correspondence, which requires careful verification and analysis. Our accounting services for companies based in Sweden also include the provision of a delivery address along with professional handling of company correspondence.
We also provide a simple exchange of documents electronically – without the need to travel to the office premises. We are open to the needs of our clients, which is why we function in such a way as to facilitate contact between the entrepreneur and the accounting office as much as possible. Not only that, but we prove that accounting does not have to be complicated at all – regardless of whether your company’s headquarters is in Poland or Sweden.
Our main goal is to provide accounting services in Sweden to business entities in the field of accounting, finance and business administration. We provide support at every stage of the business – both during the establishment of the company and while running the business. Our accountants have many years of experience in serving Polish entrepreneurs in Sweden and have extensive theoretical and practical knowledge of accounting. Thanks to our knowledge of the requirements and functioning of Swedish authorities and control institutions, we are able to ensure efficient handling of formalities.
