Setting up a Private Limited Company in Sweden
The process of establishing a private limited company, commonly known as an “AB company” or “aktiebolag” in Sweden, is a straightforward procedure. Below is a checklist outlining the formalities required for this process:
A Swedish private limited company gains legal entity status upon registration with Bolagsverket, the Swedish Companies Registration Office.
To complete the registration, specific documents in Swedish must be submitted, including:
- Memorandum of association (stiftelseurkund) – 1 original or 1 certified copy.
- Articles of association (bolagsordning) – The draft articles of association are attached to the memorandum of association.
- Minutes of the constituent meeting of shareholders (protokoll från konstituerande bolagsstämma) – 1 certified copy.
- Bank certificate (bankintyg) – 1 original. A minimum share capital of SEK 25,000 must be deposited in a Swedish bank, which will issue a certificate, signed by two bank officers, confirming the deposit.
- Subscription list (teckningslista) – 1 original or 1 certified copy. This is necessary only if subscriptions for shares have not been made in the memorandum of association.
- Adopted articles of association (antagna bolagsordningen) – 2 copies. These are required only if the draft articles of association are modified during the shareholders’ meeting.
- Permit from the Companies Department for an individual residing outside the European Economic Area (EEA) to serve as the founder or company officer. This is mandatory under certain conditions.
The application should include specimen signatures of all board members, deputy members, the managing director, and, if applicable, deputy managing director. These signatures must be certified by two witnesses.
An authorized or approved public accountant must be appointed as the company auditor and must also sign the application to accept the appointment.
If the company lacks an authorized representative residing in Sweden, the board of directors must authorize a resident of Sweden to accept service of process on the company’s behalf. This individual must be registered with the Patent and Registration Office.
Incorporating a Swedish Private Limited Company
The registration of the company is completed with the Swedish Companies Registration Office. Before registration, the company is non-existent and cannot engage in any agreements or business activities. Once the registration is finalized, the Swedish Companies Registration Office announces these entries in the Swedish Official Gazette. The Private Limited Company is then assigned a registration number, which serves as the company’s identification number throughout its existence. This registration number must be included on the company’s letterhead, invoices, and order forms.
Company Name Registration
To protect the company’s name, it must be registered with the Swedish Companies Registration Office. The name protection for a limited liability company applies to Sweden and the registered business activity. Certain rules, such as ensuring the name is not similar to any other registered company name or trademark, is not misleading, and does not exclusively describe the company’s activity, must be adhered to. The company’s name must also include the Swedish term for a limited liability company, “aktiebolag,” or its abbreviation, AB.
Employers must register as such by submitting the Notification of Tax and Contributions Liability (RSV 4620) to the Swedish Tax Agency. Upon registration, employers will automatically receive all the necessary documents, including VAT and PAYE returns, to account for and pay VAT, income tax, and social contributions.
Purchasing an “Off-the-Shelf” Company
For some foreign companies, the registration of a limited liability company may seem too complex or time-consuming. In such cases, the most convenient approach to establish a subsidiary in Sweden is to acquire an “off-the-shelf company” from a company agent or law firm. Many law firms in Sweden offer “off-the-shelf companies,” expediting the start-up process. Purchasing an “off-the-shelf” company streamlines several registration procedures already completed at the Swedish Companies Registration Office, allowing the company to initiate its business activities immediately. However, the newly acquired company must still register a new name.
Overview of Sweden
Sweden, the largest country in the Nordic Region, boasts the most extensive population. It is renowned for its association with flat-pack furniture, innovation, and a strong presence in iron and steel industries. The nation allocates 3% of its GDP to research and development. Sweden shares its borders with Norway to the west and Finland to the northeast.
Sweden operates as a Constitutional Monarchy.
Stockholm, Sweden’s capital, and the largest city hold the distinction of being the most extensive urban area in Scandinavia. The municipality is home to approximately 980,000 residents, with 1.6 million in the urban area and 2.4 million in the metropolitan area.
Sweden’s legal system draws from four primary sources of law: legislation, preparatory legislative material, case law, and academic literature. Legislation serves as the primary source and is officially published in the Swedish Code of Statutes. It is categorized into acts, ordinances, and regulations.
As of January 2023, Sweden’s population stands at 10,261,205, based on Worldometer’s elaboration of the latest United Nations data. Sweden’s population accounts for roughly 0.13% of the global population, positioning the country at the 91st rank among nations and dependencies in terms of population.
The predominant language in Sweden is Swedish, with a small minority speaking Sami and Finnish.
Sweden’s economy is highly developed and export-oriented, primarily relying on resources like timber, hydropower, and iron ore. These assets underpin an economy with a strong focus on foreign trade. Key industries include motor vehicles, telecommunications, pharmaceuticals, industrial machines, precision equipment, chemical goods, home goods, appliances, forestry, iron, and steel. While Sweden once depended heavily on agriculture, it has transitioned to develop competitive industries in engineering, mining, steel, and pulp. Notable international companies originating from Sweden include Ericsson, ASEA/ABB, SKF, Alfa Laval, AGA, and Dyno Nobel.
Key Trading Partners
Sweden’s top six trading partners encompass Norway, Germany, the United States of America, Denmark, Finland, and the United Kingdom. Collectively, these prominent trading partners accounted for nearly half (49.3%) of all Swedish exports in 2022. Geographically, a significant portion of Sweden’s exports (69.8% by value) is directed towards fellow European countries, with an additional 14.1% sold to importers in Asia. North America receives 9.2% of Sweden’s exports, while smaller percentages are distributed to Africa (1.8%), Latin America (excluding Mexico but including the Caribbean) (1.3%), and Oceania, led by Australia (1.2%).
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