What is an LLC in Sweden?
A limited liability company (LLC), Aktiebolag or AB in Swedish, is a business structure that offers limited liability protection to its owners, who are referred to as shareholders. LLCs are the entity of choice for most investors when they start their activities in Sweden.
Why choose an LLC?
The LLC business structure is preferred especially for the advantage of the distinct separation between the cooperation and its founders. The shareholders are not personally responsible for the debts and obligations of the company. Instead, their liability is limited to the amount of capital they have invested in the company.
LLCs are a popular choice for small businesses and entrepreneurs in Sweden as they offer liability protection, flexibility in terms of management structure, and the ability to attract investment. To establish an LLC in Sweden, the company must be registered with the Swedish Companies Registration Office (Bolagsverket) and comply with various tax and accounting regulations.
Two different types of LLCs
In Sweden, there are two types of limited liability companies: public and private. There are several important differences between the two you should know about. The main differences regards shares, minimum capital, members and management.
A public limited liability company can issue shares to the public and can be listed on a stock exchange. The minimum capital requirement is 500,000 SEK andat least three board members need to be elected to the board of directors. In addition,a managing director needs to be elected and the company is obliged to appoint an auditor.
The private limited company on the other hand, cannot offer its shares to the public on the stock exchange, any other organized market place or to a broader group of people. The minimum share capital is 25,000 SEK or the equivalent amount in EUR if the company should choose to have Euro as its nominal currency.
Also there must be at least one board member and one deputy board member elected to the board of diretors in a private LLC. Finally it is possible to elect a managing director for the company and appoint and auditor for the company. For the latter it is only mandatory in some cases. an optional managing director and it's recommended to have an auditor (only mandatory in some cases).
What type of LLC should I use for my company in Sweden?
A private limited company is recommended for small or medium-sized companies, while the public form is used and recommended for large corporations.
If you want more information on how to set up a private limited company in Sweden, take a look at this article.
Costs to be aware of for setting up a limited company in Sweden
- Limited company registration: 2,200 SEK
- Second company name application: 1,600 SEK
- Business name change: 1,600 SEK
- Changes to the company’s articles of association: 1,000 SEK
- Secondary business name application: 1,600 SEK per name
Be aware that these fees can be subject to change, and other fees may apply if the founders want to change the board of directors or an auditor for example. Also, if you as an investor use the electronic registration service that the Swedish business portal offer, you are subjected to other fees:
- Registration: 1,900 SEK
- Register a special company name: 1,400 SEK for each name
- Register the company name in a foreign language: 1,400 SEK for each name
- Change the company name: 1,400 SEK
- Operations that are not subject to taxation: changing e-mail and postal address for the company and postal address for company representatives
Keep in mind that all the fees above do not include VAT.
LLC company taxation in Sweden in 2023
Regarding taxes a limited liability company is obliged to file a Notification of Tax and Contributions Liability Form. The form is for registering the company for VAT and as an employer if applicable.
These are the taxes LLCs in Sweden are subjected to:
- Corporate income tax: 20.6 %
- For foreign companies: Swedish withholding tax, on distributions from Swedish companies: 30 %
- Standard value added tax: 25 %
- Reduced rates: 12 % and 6 %
- Paid by employer: aggregate social security contributions: 31.42 %
- Purchase or transfer of real estate: Standard stamp rate: 4.25 %
The report requirements may vary depending on company size, activities and type of LLC.
If you want to start a company in Sweden or have any questions regarding LLCs, do not hesitate to contact us. Our teams consist of professionals who all share a passion for making an international expansion into the Nordics a smooth experience for our clients.