Doing business in sweden

Doing Business in
Sweden
Sherif Mohamed
Stefan Schübel

Agenda
Geography &
History

Demography

Economic Status

Doing Ease of
Business
Business in doing
Entities
Tax Labor Law
Sweden business

Business Culture

GEOGRAPHY & HISTORY

3

Geography
Country
• Size: 450,295 km2
• 3rd largest country of the EU
• Ranked 55 biggest globally
• Divided in 21 counties
Scenery
• 53 % Forest
• 11 % Mountains
• 8 % Cultivated Land
• 9 % Lakes (e.g. Vanern) & Rivers (Ume, Torne, Angerman)
Natural Resources
• iron, ore, copper, lead, zinc, gold, silver, tungsten, uranium,
arsenic, feldspar, timber, hydropower.

Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 5

History
• The Viking era (800-1050 AD).
• Christianity began in the 9th century.
• 14th century it united with Norway
and Denmark.
• Independence from the Danish
occupation in 1523 under Gustav I
Vasa.
• Great European power.
• Neutrality during both World Wars.
• Joined the European Union in 1995.

Nobel Prize
• chemist, engineer,
entrepreneur, innovator
• invention of Dynamite in
1867 to be used in mining
• Alfred Nobel formed the
Noble prize due to regrets
of using dynamite in wars


Demography
General
• Human Development Index: 0.885 in 2010
• Ranked place 9 out of 169
• GNI: $36,936


Demography
Population
• Number inhabitants: 9,433,875
 22 inhabitants / km2
• 90% live in the south
• 85 % live in cities
• Average family: 1.26 children
• Life expectancy men: 79
• Life expectancy women: 83


Demography
Languages
• Total: ~ 200
• Most Common: Swedish, English, Finnish,
all Sami dialects, Torne Valley Finnish
(Meänkieli), Romani and Yiddis
Ethnic groups
• Swedes, Finns, Sami
• Immigrants: Iraquis, ex Yugoslavia
nationals, Somalis, Iranians, Norwegians,
Danes, Turks and Poles


Demography
Religions
• 87 % Evangelical Lutheran
• 13 % Roman Catholic, Orthodox,
Baptist, Muslim, Jewish and
Buddhist

Weather
• Influences: Gulf Stream, Atlantic
winds

• South: temperate
• North: subarctic


Demography
Society
• “Swedish welfare policy”
Large public sector + welfare
system

• “the Swedish model”

• “the third way”

• “ the middle way”


Government
• Constitutional
Monarchy.
• Civil law system is
influenced by the
Roman-Germanic
Authority
law.
Monarch

Legislative Executive Judicial
Branch Branch Branch


Economic Status
Currency
• 1873 introduced krona (SEK) = 100 öre
• In 2003 56% of the Swedes denied the
Euro
• 1 Euro = SEK 9.1802

Imports / Exports
• Imports (2010): 106710 million €
• Exports (2010): 113600 million €

• Net Trade of goods: 6890 million €


Economic Status
GDP
• National Accounts of GDP: €
83,250 million
• GDP per Capita: € 35,260

Inflation
• Inflation rate May 2011:
3.3%
• Consumer price increased
by 0.2 %


Economic Status
Labor market
• Employment: 4,606,000 people
• Unemployment: 395,000 people
• Unemployment rate 7,9 %

Interest rate
• Short-term treasury discount
notes: 1.91%

• Long-term government bonds:
3.01%


Economic Status
Main economic activities
• Core industries with high level of
investment:
engineering industries, forestry, information
and communication technology, biotech and
life science industries, environmental
industries and renewable energy and
functional foods
• “Swedish economic miracle”

Biggest companies
• Volvo, Vattenfall, Ericsson, Skanska AB,
SCA, H&M Hennes & Mauritz
• http://www.youtube.com/watch?v=fFHRAuvjOtQ&feature=related


Economic Status
R & D
• Leading position in scientific R &D
• Highest gross expenditures per capita
• Carried out by universities and institutions of higher learning
• Extensive research infrastructure, including science parks, large
universities, research institutes


Ease of Doing Business in Sweden
Parameter Rank (2011)
Ease of doing business 14
Starting a business 39
Dealing with construction permits 20
Registering property 15
Getting credit 72
Protecting investors 28
Paying taxes 39
Trading across borders 7
Enforcing contracts 52
Geography & History * Demography * Economic Status * Doing Business in Sweden * 18
Closing a business Business Culture 23

Ease of Doing Business in Sweden
To open a business in Sweden:
1. An entrepreneur has to be at least 18 years old.
2. not declared incapable
3. not under bankruptcy quarantine
4. No swedish partner (it depends!!)
5. Check whether license is needed

* You pay less for social contributions and licensing
if you started the business before 26 years old


Business Entities

Business Entities

limited partnership
branch of a foreign
(kommanditbolag-
company (filial)
KB)
limited Liability
Company Others
(aktiebolag-AB)


Business Entities
Limited Liability Company
AB
(aktiebolag-AB)
• most common business structure Public Private
used by foreigners.
• registered at the Swedish Companies Stock No stock
Registration Office (Bolagsverket) market market

• Shares can have a different number 500,000 50,000
of votes depending on if they are A- SEK SEK

or B-shares


Business Entities
Limited Liability Company (aktiebolag-AB)
• A limited company must have at least one director and
one deputy
• Public companies must have at least three board
directors and a managing director. A private company
may appoint a managing director.
• The board of directors is elected annually by the
shareholders at the general meeting.
• The board signs documents on behalf of the company.
• The managing director has to be a resident of the EEA.


Business Entities
Branch (filial)

• The manager has to be of legal age, not
declared legally incompetent and a Swedish
citizen
• Branches are subject to specific legal
provisions, unlike representative offices, and
are subject to all aspects of Swedish law,
including tax law.

Business Entities
Partnership (handelsbolag-HB)
• at least two partners
• The partners are not limited to
natural persons
• the partnership is a qualified legal
entity
• The partnership as such is not taxed.
Instead, the partners are taxed, each
in proportion to his share of income
of the partnership

Taxation
Tax rates are among the highest in the world
(up to 59.09%)
Income tax rate
Company tax is based on net profit taxation
Only national tax is levied on companies
The tax rate for limited companies is 26.3%
VAT (mervärdeskatt)
25% is the general tax rate applied on the sales value, 12% for hotels,
transportation and food, 6% for newspapers.


Taxation
Net wealth tax
• From 1st of January 2007 the wealth tax
is abolished
Real estate tax
• local fee
• For commercial buildings there is still
real estate tax between 0.2 % and 1.0 %
Church taxes
• for members of the Lutheran Church of
Sweden


Labor Law
• Security of employment act prevents
arbitrary dismissal.
• Swedish law doesn’t mandate a minimum
wage.
• Board representation for employees.
• Prohibition of discrimination based on
sex, race or religion.
• Promotion of equality.
• Normal working hours are 40 hours per
week and an overtime limit of 200 hours
per year


Labor Law
• Statutory right to five weeks of annual
holiday from the first year of employment,
of which four consecutive weeks can be
taken during the June-August period.

• Dismissal procedure requires 3 steps: (1)
dismissal notification is directed to the
trade union, (2) within a month, the
employee is informed, (3) termination occur
one to six months according to the
employees’ age and number of affected
workers


Business Environment
• Low level of hierarchy allows a first-
name basis for everyone.
• work attire is often conservative, but
casual.
• Employees and many employers,
often focus on doing exactly what’s
needed and doing it well, rather than
doing unnecessary things (Lagom).
• The managing director of a firm is
more openly available to his or her
employees.
• strong union presence in Sweden.


Business Environment
• The Swedes are monochromic people and
expect everything to be planned ahead and on
time.
• Easing the way into a company or into relations
with a company takes time.
• Swedes are not so receptive to new
thoughts/plans if they feel that they are being
forced upon them.
• Swedish culture and work ethic means full
respect between colleagues or business
associates and they are completely intolerant
to disrespect .
• they avoid embellishing their accomplishments.


Thanks for your Attention 39

Thanks for your Attention…..

Doing business in sweden

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