Sweden

Sweden is a Nordic country on the Scandinavian Peninsula in Northern Europe. Today, Sweden is a constitutional monarchy with a parliamentary system of government and a highly developed economy. Sweden has been a member of the European Union since 1 January 1995 and is a member of the OECD. The World Economic Forum 2009-2010 competitiveness index ranks Sweden the 4th most competitive economy in the world.  

Official language – Swedish.

Currency – Swedes have rejected the euro in a popular vote, and Sweden maintains its own currency, the Swedish krona (SEK).

The main Swedish statutes regulating limited companies are The Companies Act (Aktiebolagslagen (ABL) 2005:551) and The Limited Companies Ordinance (Aktiebolagsförordningen 2005:559). The law provisions in ABL stipulate that parent companies and subsidiaries are separate legal persons and legal entities.

Swedish Limited Companies

Aktiebolag (literally "share company" or "stock company") is the Swedish term for "limited company" or "corporation". When used in company names, it is abbreviated "AB" (roughly equivalent to the abbreviations Ltd and PLC). The governmental authority responsible for registration of limited companies in Sweden is called Bolagsverket (the Swedish Companies Registration Office).

Swedish aktiebolag are divided into two categories: private limited companies and public limited companies.

A public limited company (publikt aktiebolag) is legally denoted as "AB (publ)". It must have a minimum share capital of 500,000 Swedish kronor and its shares can be offered to the general public on the stock market.

For a private limited company (privat aktiebolag), the minimum share capital is 50,000 Swedish kronor.

Taxation

The tax rates in Sweden are commonly cited as among the highest in the world, along with Denmark. As example, the corporate tax can be mentioned, though it was cut to 26.3% from 28% since 2009.

Sweden individual income tax for 2009 is calculated at progressive rates up to 59.17%. Individuals pay both national income tax and municipal income tax. The tax rate changes according to where the individual lives. Individuals who are liable to Swedish tax have to pay tax on their worldwide income and capital gains.

A foreign national will be liable to tax if he is regarded as resident in Sweden, if he has an essential connection to Sweden or if the individual is present in Sweden for a period of more than 183 days during the tax year.

Non-residents are subject to tax only on income from sources in Sweden.

The standard value added tax (mervärdesskatt or moms) rate in Sweden is 25%. A reduced rate of 12% VAT applies primarily to food, hotel accommodation and camping. A reduced rate of 6% applies mainly to newspapers, books, magazines, public transport, sporting events and to certain cultural activities. Certain services, such as medical and dental care, social services, banking and financial services are not covered by VAT. For consumers, VAT is always included in the marked price.

Capital gains tax: interest income, dividends, gains from the sale of capital assets, gains from the sale of real estate and capital gains are taxed at a flat rate of 30%. Generally 70% of interest expenses and capital losses can be set off against capital income and are deductible. A tax reduction is granted on losses exceeding income on capital, resulting in a net loss. 30% (or 21% when the total net capital loss exceeds SEK 100,000) of a net capital loss can be set off against tax on income from employment.

Sweden Corporate Tax Rate

Sweden corporate tax rate since 2009 is 26.3%.

Corporate tax is levied on the worldwide income of companies resident in Sweden and also on profits which arise from activities carried out in Sweden through a branch or an agency.

A company is resident for tax purposes when it is registered in Sweden. Royalties received from Swedish licensees are taxable in Sweden as income from a permanent establishment situated in Sweden. Where a treaty exists, the right to tax may be waived or limited. Since 2004 Sweden has adopted Directive 2003/49/EC on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States. In accordance with the Directive, interest and royalty payments shall be exempt from withholding tax provided that the beneficial owner is a company or a permanent establishment in another Member State.

Branch profits tax: A branch's taxable trading profits and capital gains are calculated on the same basis as for Swedish resident companies.

In spite of the high taxation there are some facts that make Sweden an interesting jurisdiction for an international financing company.