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Sweden

 
   

Executive Summary
The Kingdom of Sweden is located on the Scandinavian Peninsula in the Northern part of Europe. It has land borders with Finland and Norway, and is connected to Denmark by the Oresund Bridge; it also has maritime borders with Russia, Poland, Germany, Estonia, Latvia and Lithuania. Sweden covers a total area of 450,000 sq km and it the third biggest country in the EU. Stockholm is the capital of Sweden; Swedish is its official language, although five other languages are recognized as minority languages.

Sweden is a constitutional monarchy, which has adopted a parliamentary system political model. Since the beginning of the 20th century, the country has followed a non-aligned, peace foreign policy, remaining neutral during wars.

Sweden has a highly developed economy and is highly ranked in international democracy and human development indexes. It is a member of several international organizations. Sweden has a developed export-oriented industrial economy. The country possesses highly developed telecommunications technology, as well as skilled labour. Timber, hydropower and iron ore are its natural resources. Engineering sector is well developed, as well as automotive and pharmaceutical industries are. Agricultural activities bring only 2% to the GDP. Publicly owned enterprises have little importance, main industries and large companies are under a private control.

The Swedish Krona (SEK) is the national currency.

Geography
Sweden is located to the West of the Baltic Sea and is separated from Norway by Scanderna - the Scandinavian Mountain Chain. Kebnekaise is the highest point of Sweden, which rises at 2,111 metres above the sea level. Gotland and Oland are largest islands of the country. Sweden is rich with numerous lakes, its Southern part is engaged in agricultural activities, with significant territories covered by forests. Approximately 15% of the country’s territory is located to the North of the Arctic Circle.

The country has a temperate climate in general, however, three parts of Sweden are characterized with slightly different climates. Its Southern part has an oceanic climate, the central part has a humid continental climate and the Northern part is a subarctic climate territory. Tanks to the Gulf Stream the climate of Sweden is drier and warmer than that of other territories in the same latitude. Daylight length varies significantly during the year. There is a significant temperature amplitude between Northern and Southern parts of the country, as well as among seasons.

Map, Flag and Coat of Arm

 


Types of Company

Private Limited Liability Company

A minimum capital requirement to incorporate this type of company is SEK 100,000, but the local authorities are discussing the option to lower it. At least one shareholder may incorporate a company, foreigners are advised to ask professional companies for assistance, in order to conduct an incorporation procedure correctly. It takes up to five weeks to establish a company. If a company has less than three directors, at least one person should be a deputy director. Corporate directors are not allowed. A company secretary is not obligatory. Generally, annual returns and financial statements need to be filed with the authorities. A Swedish company cannot redomicile abroad, as well as a foreign company cannot be redomiciled to Sweden.

Protected cell companies are not allowed, ready-made or shelf companies are available.

Public Limited Liability Company
This company may offer its shares to the general public, and is often listed on a stock exchange. At least three directors should constitute a board of directors.

Sole Proprietorship
This structure is fully owned by one person with unlimited liability for all its activities, debts and obligations.

General Partnership
Two or more people cooperate together under a single name, and are jointly and severally liable for all the partnership’s obligations. Usually, a partnership agreement regulates partners’ relations and cooperation.

Limited Partnership
At least one general partner with unlimited liability and one limited partner with liability limited up to the capital invested can create a limited partnership.

Holding Company
A particular structure of a holding company may provide a significant tax advantage to the company owners.

Foundation

Civil law-type foundations can be incorporated and managed in Sweden.

Taxation

Personal
Personal income tax has a progressive nature, and depending on the overall annual income, tax may be paid at varying rates starting at 31% and reaching a maximum of 51%. Health tax is levied at a rate of 1.5% of the salary. Sweden has a highly developed social services system, and has one of the highest levels of life in the world.

Corporate
The standard rate of the corporation tax was lowered from 28% to 26.3% in the beginning of 2009. Capitals gains are taxed at a rate of the corporation tax. Withholding taxes are charged at a rate of 28% and 30%, but it is often reduced. Dividends and capital gains that derive from holding of unlisted shares are exempted from withholding tax. A company may decrease its taxable income by creating tax allocation reserves.

There is a property tax. The standard VAT rate is levied at a rate of 25%, however 21% is applied on food, and 12% on tourist services, some products and services are exempted from VAT.

 
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