Guide: starting a private limited company in Sweden
A limited liability company is the entity of choice for most investors when they start their activities in Sweden. In this article you’ll find a brief 6 step guide on how to do it.
Looking for more information about what a limited liability company in Sweden is and why it’s preferred by so many? Read more here.
Starting a private limited company in Sweden involves several steps that must be followed in order to ensure that the company is legally established. Here's a brief guide on how to do it:
- Incorporate or Buy? You can incorporate a private limited company from scratch with the Swedish Companies Registration Office (Sw. Bolagsverket). However, most investors elect to purchase an off the shelf company, which is an already incorporated company in Sweden. The benefit of acquiring a shelf company is that you are up and running a lot quicker since it does not require running through the administrative treadmill provided by the banks and Bolagsverket.
- Contact your bank: This might seem like a strange early step when starting a company in Sweden, but Swedish banks are governed by a considerable number of regulations in relation to Anti-Money Laundering and Terror Financing which makes the procedure of opening a bank account in Sweden somewhat arduous and time consuming. If you already have an existing bank relationship in your home country that has an office in Sweden, this helps a lot in reducing the time expenditure for this procedure.
- Find a name: Unlike in many other jurisdictions, in Sweden you receive a protection for your company name when registering a company with Bolagsverket. As a result, it can sometimes be a bit of a challenge finding a company name. There are several interactive guides online to assist in this process, but always make sure you have a plan B when it comes to deciding a name for your company.
- Elect a Board: In Sweden the minimum requirement for board members is one director and one deputy director. The latter needs to be appointed if there are less than three board members in the board of directors. In addition, at least half of the directors and half of the deputy directors need to reside within the EEA. Finally, if none of the board members reside in Sweden a so-called Process Agent need to be appointed.
- Elect an auditor: Small limited companies are exempted from the requirement of appointing an auditor. If a company has exceeded at least two of the following criteria the last two financial years it must appoint an auditor. The company must have exceeded the same two criteria both financial years.
- More than 3 employees
- A balance sheet total of more than1,5 MSEK
- A net turnover of more that 3 MSEK
- Register for taxes: Depending on what type of business activities you will conduct in Sweden, after the company is registered with Bolagsverket, you will need to register the company for taxes with the Swedish Tax Agency. Usually this means registering for VAT and, if you have employees, as an employer. In addition, you will need to register for so-called F-tax, where the F stands for företag (i.e. company). This is a preliminary Corporate Income Tax which is payable on a monthly basis and then set off against the determined final CIT.
These are the basic steps to starting a private limited company in Sweden. It's important to seek professional advice and guidance to ensure that the process is done correctly and that the company is fully compliant with all legal requirements. Feel free to contact us with any questions.