Establishing business in Sweden

Corporate Structure & Registrations

An initial assessment is recommended to determine the most appropriate structure based on your current company set-up and the intended presence in Sweden. This includes evaluating whether the foreign company should:

• operate without a registration,
• register a Swedish branch,
• or establish a Swedish limited liability company (AB). 

Once the structure is decided, the necessary registrations are made with the Swedish Companies Registration Office and other relevant authorities. 

Tax & employer obligations

It is crucial to assess corporate and employer tax obligations at an early stage. This includes:

• evaluating the risk of creating a Permanent Establishment (PE) in Sweden, 
• assessing Economic Employer exposure, 
• determining liability for Swedish corporate income tax and VAT, 
• identifying employer obligations such as Swedish social security contributions, pension arrangements and insurances. 

Registrations with the Swedish Tax Agency may include F-tax, VAT registration and employer registration. 

Immigration obligations

For non-EU/EEA employees working in Sweden, work and residence permits may be required.

This includes assessing eligibility, managing application processes and ensuring compliance with Swedish migration rules throughout the assignment period. 

Relocation support

Consideration of practical set-up including housing, bank account, health care, registration and operational support for employees, children and partners to ensure a smooth relocation.

Payroll & HR responsibilities

If the company has employer obligations in Sweden, payroll reporting must be carried out on a monthly basis. This includes tax withholding and social security reporting. Employers must also comply with Swedish labor law, which may involve: 

• Preparing compliant employment agreements.
• Assessing the obligation to enter into a Collective Bargaining Agreement (CBA) Managing benefits such as pension, insurance and statutory employee protections .

 Additional reporting obligations may apply, including: 

• Notifications to the Swedish Work Environment Authority.
• Reporting to the Swedish Tax Agency.
• Registration and administration of ID06 cards.
• Reporting to industry-specific bodies under certain CBAs (e.g. Byggnads, FORA).

Monthly & annual reporting obligations

Ongoing compliance includes both monthly and annual reporting requirements, such as: 

• PAYE reporting and payments
• VAT returns
• Corporate income tax returns
• Statutory accounting and bookkeeping 

Transfer pricing considerations may also apply for intra-group transactions, depending on the structure and activities in Sweden. 

An annual report must be prepared after the end of the financial year. A company must submit it to the Swedish Companies Registration Office within seven months, while a branch does not submit its own annual report; instead, the parent company must file a copy within three months after approval by shareholders, or at the latest seven months after the end of the financial year.