2017 Investment Climate Statements: Sweden

Policies Towards Foreign Direct Investment

Until the mid-1980s, Sweden’s approach to direct investment from abroad was quite restrictive and governed by a complex system of laws and regulations. Sweden’s entry into the European Union (EU) in 1995 has greatly improved the investment climate and attracted foreign investors to the country.

The number of foreign subsidiaries in Sweden increased sharply from the mid1990s, from just over 3,000 to over 10,000, ten years later. Despite substantial FDI inflows, the stock of Swedish assets held abroad still exceeds the stock of foreign assets in Sweden.

The Swedish Government recognizes the need to further improve the business climate for entrepreneurs, education, and the flow of research from the lab to the market. Swedish authorities have implemented a number of reforms to improve the business regulatory environment and to attract more foreign investment.

Business Sweden is the Swedish investment promotion agency which is tasked with facilitating foreign investment in Sweden. The agency is co-owned by the Swedish Government and Swedish industry, and it provides access to contacts and networks at all levels. It also provides strategic advice and hands-on support.

Sweden does not make a distinction between investment retention and maintaining an ongoing dialogue with investors and views both priorities equally important.

Limits on Foreign Control and Right to Private Ownership and Establishment

Rights of this kind are not specifically written into Swedish law, but individuals and Swedish entities are well protected by the legal system. Private and public enterprises as a general rule enjoy equal access to markets necessary for conducting business operations. However, Sweden does maintain some exceptions in a limited number of situations:

• Accountancy: Investment in the accountancy sector by non-EU-residents cannot exceed 25 percent.
• Legal services: Investment in a corporation or partnership carrying out the activities of an “advokat”, a lawyer, by non-EU residents.
• Air transport: Foreign enterprises may be restricted from access to international air routes unless bilateral intergovernmental agreements provide otherwise.
• Air transport: Cabotage reserved to national airlines.
• Maritime transport: Cabotage is reserved to vessels flying the national flag.

Swedish company law provides various forms under which a business can be organized. The main difference between these forms is whether the founder must own capital and to what extent the founder is personally liable for the company’s debt. The Swedish Act (1992:160) on Foreign Branches applies to foreign companies operating some form of business through a branch and also to people residing abroad who run a business in Sweden. A branch must have a president who resides within the European Economic Area (EEA). As previously mentioned, all business enterprises in Sweden (including branches) are required to register at the Swedish Companies Registration Office, Bolagsverket. An invention or trademark must be registered in Sweden in order to obtain legal protection. A bank from a non-EEA country needs special permission from the Financial Supervision Authority to establish a branch in Sweden. Sweden does not maintain an investment screening and approval mechanism for inbound foreign investment.

Other Investment Policy Reviews

The Economist Intelligence Unit and the World Bank’s “Doing Business Economy Profile 2017: Sweden” provide current details on Sweden’s investment policies. Sweden has not recently undergone an investment policy review by the World Trade Organization (WTO), United Nations Committee on Trade and Development (UNCTAD), or Organization for Economic Cooperation and Development (OECD) in 1993.

Business Facilitation

Business Sweden, The Swedish Trade and Invest Council, is the investment promotion agency tasked with facilitating business. The services of the agency are available to all investors. More information concerning the agency is presented in the following section.

All forms of business enterprise, except for sole traders, have to be registered with the Swedish Companies Registration Office, Bolagsverket, before starting to operate. Sole traders may apply for registration in order to be given exclusive rights to the name in the county where they will be operating. Online application to register an enterprise can be made at http://www.bolagsverket.se/en and is open to foreign companies. The registration process is generally clear and complete, providing the applicant with relevant and updated information concerning processing times and necessary permits. The process of registering an enterprise can take a few days or up to a few weeks, depending on the complexity and form of the business enterprise.

All business enterprises, including sole traders, need also to be registered with the Swedish Tax Agency, Skatteverket, before starting to operate. Relevant information and guides can be found at: http://www.skatteverket.se .

Depending on the nature of business, companies may need to register with the Environmental Protection Agency, Naturvårdsverket, or, if real estate is involved, the county authorities. Non EU/EEA citizens need a residence permit, obtained from the Swedish Board of Migration, Migrationsverket, in order to start up and/or run a business. At http://www.verksamt.se , a collaboration of several Swedish government agencies, relevant guides and services pertaining to registering, starting, running, expanding and/or closing a business can be found.

Sweden defines a micro enterprises as those with less than 10 employees, a small enterprise with less than 50 employees, and a medium enterprise with less than 250 employees.

Outward Investment

The Government of Sweden has commissioned the Swedish Exports Credit Guarantee Board (EKN) to promote Swedish exports and the internationalization of Swedish companies. EKN insures exporting companies and banks against non-payment in export transactions, thereby reducing risk and encouraging expanding operations.

As part of export strategy that was presented in 2015, The Swedish Government has also launched Team Sweden to promote Swedish exports and investment. Team Sweden is tasked with making export market entry clear and simple for Swedish companies and consists of a common network for all public initiatives to support exports and internationalization

Business Sweden, The Swedish Trade and Invest Council, offers advice on internationalization and exports.

The Government does not restrict domestic investors from investing abroad. The only exceptions and restrictions in place are related to matters of national security and national defense; the Inspectorate of Strategic Products (ISP) is tasked with control and compliance regarding the sale and exports of defense equipment and dual-use products. ISP is also the National Authority for the Chemical Weapons Convention and handles cases concerning targeted sanctions.

Sweden has concluded investment protection agreements with the following countries:

Albania, Algeria, Argentina, Armenia, Belarus, Bulgaria, Chile, China, Cote d’Ivoire, Croatia, Czech Republic, Ecuador, Egypt, Estonia, Ethiopia, Georgia, Guatemala, Hong Kong, Hungary, India, Indonesia, Iran, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Macedonia, Madagascar, Malaysia, Malta, Mauritius, Mexico, Mongolia, Morocco, Mozambique, Nicaragua (signed but not in force), Nigeria, Oman, Pakistan, Panama, Peru, Philippines, Poland, Republic of Korea, Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Slovakia, South Africa, Sri Lanka, Tanzania, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Venezuela, Vietnam, Yemen and Zimbabwe (signed but not in force). Sweden does not have a bilateral investment treaty with the United States.

Bilateral Taxation Treaties

Sweden and the United States signed a bilateral taxation treaty in 1994, which was amended in 2005. More information is available at http://www.irs.gov/Businesses/International-Businesses/Sweden—Tax-Treaty-Documents .

Transparency of the Regulatory System

As an EU member, Sweden has altered its legislation to comply with the EU’s stringent rules on competition. The country has made extensive changes in its laws and regulations to harmonize with EU practices, all with a view to avoiding distortions in or impediments to the efficient mobilization and allocation of investment.

The institutions of the European Union are publicly committed to transparent regulatory processes. The European Commission has the sole right of initiative for EU regulations and publishes extensive, descriptive information on many of its activities. See:

http://ec.europa.eu/atwork/decision-making/index_en.htm ;
http://ec.europa.eu/smart-regulation/index_en.htm ;

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Nongovernmental organizations and private sector associations may submit comments to government draft bills. The submitted comments are made public in the public consultation process.

Rule-making and regulatory authority on a national level exists formally at the legislative branch, the Riksdag. As a member of the EU, a growing proportion of legislation and regulation stem from the EU. These laws apply in some case directly as national law or are put before the Riksdag to be enacted as national law. The executive branch, The Government of Sweden, and its various agencies draft laws and regulations that are put before the Riksdag and are adopted on a national level when they enter into force. Municipalities may draft regulations that are within their spheres of competence. These regulations apply at the respective municipality only and may vary between municipalities.

Draft bills and regulations, which include investment laws, are made available for public comment through a public consultation process, along the lines of U.S. federal notice and comment procedures. Current and newly adopted legislation can be found at the Swedish Parliament’s homepage and in the various government agencies dealing with the relevant regulation: http://www.riksdagen.se/sv/dokument-lagar/ 

Key regulatory actions are published at Lagrummet (https://lagrummet.se/ ). Lagrummet serves as the official site for information on Swedish legislation and provides information on legislation in the public domain, all statutes currently in force and information on impending legislation.

“Post och Inrikes Tidningar” serves in certain aspects a similar role as the Federal Register in the U.S., through which public notifications are published. The proclamations of “Post och Inrikes Tidningar” can be found at the Swedish Companies Registration Office (Bolagsverket). https://poit.bolagsverket.se/poit/PublikPoitIn.do .

The judicial branch and various agencies are tasked with regulation oversight and/or regulation enforcement.

Regulations are reviewed on the basis of scientific and/or data-driven assessments. The principle of public access to official documents (offentlighetsprincipen) governs the availability of the results of studies that are conducted by government entities and furthermore to comments made by government entities. The principle provides the Swedish public with the right to study public documents as specified in the Freedom of the Press Act.

International Regulatory Considerations

As an EU-member, Sweden complies with EU-legislation in shaping its national regulations.

If a national law, norm or standard is found to be in conflict with EU-law, then the national law is altered to be in compliance with EU-law.

Sweden adheres to the practices of WTO and coordinates its actions in regards to WTO with other EU-member countries as the EU-countries have a common trade policy.

Legal System and Judicial Independence

Sweden is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Law; foreign awards may be enforced in Sweden regardless of which foreign country the arbitral proceedings took place. The main source of arbitration law in Sweden is the Swedish Arbitration Act which contains both procedural and substantive regulations.

Sweden is a party to the Lugano and the Brussels Conventions and by its membership of the EU; Sweden is also bound by the Brussels Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.

An arbitral award is considered final and is not subject to substantive review by Swedish courts. However, arbitral awards may be challenged for reasons set out in the Arbitration Act. An award may, for example, be set aside after challenge as a result of procedural errors which are likely to have had an effect on the outcome.

The Swedish courts are divided into:

• Courts of general jurisdiction (the district courts, the Courts of Appeal and the Supreme Court) which has jurisdiction with respect to civil and criminal cases;
• Administrative courts (county administrative courts, Administrative Courts of Appeal and the Supreme Administrative Court) with jurisdiction with respect to issues of public law, including taxation;
• Specialist courts for disputes within certain legal areas such as labor law, environmental law and market regulation.

Swedish legislation and Swedish agencies provides guidance as to if regulations or enforcement actions are appealable and adjudicated in the national court system.

Laws and Regulations on Foreign Direct Investment

During the 1990s, Sweden undertook significant deregulation of its markets. In a number of areas, including the electricity and telecommunication markets, Sweden has been on the leading edge of reform, resulting in more efficient sectors and lower prices.

Nevertheless, a number of practical impediments to direct investments remain. These include a fairly extensive, though non-discriminatory, system of permits and authorizations needed to engage in many activities and the dominance of a few very large players in certain sectors, such as construction and food wholesaling.

Regulation on foreign ownership in financial services has been liberalized. Foreign banks, insurance companies, brokerage firms, and cooperative mortgage institutions are permitted to establish branches in Sweden on equal terms with domestic firms, although a permit is required. Swedes and foreigners alike may acquire shares in any company listed on NASDAQ OMX.

Sweden’s taxation structure is straightforward and corporate tax levels are low. In 2013, Sweden lowered its corporate tax from 26.3 percent to 22 percent in nominal terms. The effective rate can be even lower as companies have the option of making deductible annual appropriations to a tax allocation reserve of up to 25 percent of their pretax profit for the year. Companies can make pre-tax allocations to untaxed reserves, which are subject to tax only when utilized. Certain amounts of untaxed reserves may be used to cover losses.

Due to tax exemptions on capital gains and dividends, as well as other competitive tax rules such as low effective corporate tax rates, deductible interest costs for tax purposes, no withholding tax on interest, no stamp duty or capital duties on share capital, and an extensive double tax treaty network, Sweden is among Europe’s most favorable jurisdictions for holding companies. Unlisted shares are always tax-exempt, meaning there is no qualification time or minimum holding of votes or capital. Listed shares are exempt if the holding represents at least 10 percent of the voting rights (or is contingent on the holder’s business) and the shares are held for at least one year.

Personal income taxes are among the highest in the world. Since public finances have improved due to extensive consolidation packages to reduce deficits, the government has been able to reduce the tax pressure as a percentage of GDP: currently it is below 50 percent, for the first time in decades. One particular focus has been tax reductions to encourage employers to hire the long-term unemployed.

Another tax reform to help bring foreign experts to Sweden is a reduction of key foreign personnel’s income tax. Under the reform, only 75 percent of the person’s income is taxable for the first three years of employment in Sweden. Likewise, their employers pay social security contributions on only 75 percent of the taxable salary. This tax relief applies to all salaries and benefits in kind, as well as stock options and other compensations offered by the employer. For tax purposes this applies to foreign key personnel such as executives, researchers, and experts who work temporarily in Sweden and are a resident in Sweden. The tax relief is not applicable to individuals assigned to Sweden by a foreign company that has no operations in Sweden.

U.S. citizens who have paid income tax in Sweden should be aware that there have been numerous instances of the Swedish tax authority, Skatteverket, failing to contact U.S. citizens, who have left the country, of significant overpayments of taxes. In a recent court case, Skatteverket was defrauded via the Swedish Enforcement Authority, Kronofogden, of hundreds of thousands of dollars by two individuals who allegedly used false claims against 14 foreigners, including U.S. citizens, to gain access to the foreigners’ overpayments held by Skatteverket. Skatteverket has declined responsibility for loss of the money and has asserted that the owners of the overpaid taxes must seek restitution directly from the defendants in the case.

Dividends paid by foreign subsidiaries in Sweden to their parent company are not subject to Swedish taxation. Dividends distributed to other foreign shareholders are subject to a 30 percent withholding tax under domestic law, unless dividends are exempt or taxed at a lower rate under a tax treaty. Tax liability may also be eliminated under the EU Parent Subsidiary Directive. Profits of a Swedish branch of a foreign company may be remitted abroad without being subject to any other tax than the regular corporate income tax.

There is no exit taxation and no specific rules regarding taxation of stock options received before a move to Sweden. Instead, cases of double taxation are solved by applying tax treaties and cover not only moves within the EU but all countries, including the United States.

On July 1, 2014, Sweden signed the Foreign Account Tax Compliance Act (FATCA) agreement with the U.S. Financial institutions in Sweden are now obligated to submit information in accordance with FATCA to the Swedish Tax Agency. In February 2015, the Swedish Parliament decided on new laws and regulations needed to implement FATCA. The Parliamentary decision means the government’s proposals in Bill 2014/15:41 were adopted, including for example, the introductions of:

• a new law on the identification of reportable accounts with respect to the agreement
• changes to tax procedure act
• new legislation on the exchange of information with respect to the agreement
• consequential amendments to the Income Tax Act and other laws.

The provisions entered into force on 1 April 2015. For full text of Bill 2014/15:41, available online .

For detailed tax guidance see the Swedish Tax Administration’s website :

Business Sweden provides information and guides for those interested in investing in Sweden: http://www.business-sweden.se/en/Invest/inspiration/Establishment-guides/ 

The Government of Sweden has also launched “Sweden.se”, which is intended to function as a “one-stop-shop” website. At the following webpage, the most common questions regarding setting up a business, laws, rules and procedures are answered: https://sweden.se/business/how-to-start-a-business-in-sweden/ 

Business Sweden is more oriented towards larger corporations, whereas Sweden.se focuses more on SMEs.

Competition and Anti-Trust Laws

As an EU member, Sweden has altered its legislation to comply with the EU’s stringent rules on competition. The country has made extensive changes in its laws and regulations to harmonize with EU practices, all with a view to avoiding distortions in or impediments to the efficient mobilization and allocation of investment. The competition law rules are contained in the Swedish Competition Act (2008:579), which entered into force in November 2008. The fundamental antitrust provisions have been the same since 1993. The Swedish Competition Authority (SCA) is the main enforcement authority of the Swedish Competition Act.

Expropriation and Compensation

Private property is only expropriated for public purposes, in a non-discriminatory manner, with fair compensation, and in accordance with established principles of international law.

Dispute Settlement

ICSID Convention and New York Convention

Sweden is a member of the World Bank-based International Center for the Settlement of Investment Disputes (ICSID) and includes ICSID arbitration of investment disputes in many of its bilateral investment treaties (BITs). Sweden is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Law.

Investor-State Dispute Settlement

There have been no major disputes over investment in Sweden in recent years. The country has written and consistently applied commercial and bankruptcy laws, and secured interests in property are recognized and enforced. There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Swedish arbitration law is advanced and in line with current best practice of international arbitration. The main source of arbitration law in Sweden is the Swedish Arbitration Act which contains both procedural and substantive regulations.

Sweden is a party to the Lugano and the Brussels Conventions and by its membership of the EU; Sweden is also bound by the Brussels Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.

An arbitral award is considered final and is not subject to substantive review by Swedish courts. However, arbitral awards may be challenged for reasons set out in the Arbitration Act. An award may, for example, be set aside after challenge as a result of procedural errors which are likely to have had an effect on the outcome.

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has administered arbitrations under the UNCITRAL Arbitration Rules for many years, usually acting as the Appointing Authority.

The SCC’s main administrative tasks under the Procedures are as follows:

• Appointment of arbitrators
• Deciding on challenges to an appointment of arbitrator
• Deciding and administering the costs of the arbitration
• Parties to a dispute may adopt the Procedures by agreement before or after the dispute has arisen.
• The SCC maintains different versions of the Procedures depending on which version of the UNCITRAL Arbitration Rules applies to the arbitration agreement in question (1976 or 2010 versions).

Bankruptcy Regulations

The Swedish legislation on bankruptcy is found in a number of laws that came into force in different periods of time and to serve different purposes. The main laws on insolvency are the Bankruptcy Act (1987:672) and the Company Reorganization Act (1996:764), but the Preferential Rights of Creditors Act (1970:979), the Salary Guarantee Act (1992:497) and the Companies Act (1975:1385) are equally important.

In 2010, Sweden strengthened its secured transactions system through changes to the Rights of Priority Act that give secured creditors’ claims priority in cases of debtor default outside bankruptcy. According to data collected by Doing Business, resolving insolvency takes 2.0 years on average and costs 9.0 percent of the debtor’s estate, with the most likely outcome being that the company will be sold as going concern. The average recovery rate is 77.9 cents on the dollar. Globally, Sweden ranked 22 of 189 economies on the ease of resolving insolvency in the Doing Business 2017 report.

Investment Incentives

The Swedish government offers certain incentives to set up a business in targeted depressed areas. Loans are available on favorable terms from the Swedish Agency for Economic and Regional Growth (Tillväxtverket) and from regional development funds. A range of regional support programs, including location and employment grants, low rent industrial parks, and economic free zones are also available. Regional development support is concentrated in the lightly populated northern two-thirds of the country.

EU grant and subsidy programs are generally available only for nationals and companies registered in the EU, usually on a national treatment basis. For more information, see Chapter 7 “Trade and Project Financing” in Country Commercial Guide for Sweden.

Foreign Trade Zones/Free Ports/Trade Facilitation

Sweden has foreign trade zones with bonded warehouses in the ports of Stockholm, Göteborg, Malmö, and Jönköping. Goods may be stored indefinitely in these zones without customs clearance, but they may not be consumed or sold on a retail basis. Permission may be granted to use these goods as materials for industrial operations within a free trade zone. The same tax and labor laws apply to foreign trade zones as to other workplaces in Sweden.

Performance and Data Localization Requirements

As an EU Member State, Sweden adheres to the EU’s General Data Protection Directive (95/46/EC) which spells out strict rules concerning the processing of personal data. Businesses must tell consumers that they are collecting data, what they intend to use it for, and to whom it will be disclosed. Data subjects must be given the opportunity to object to the processing of their personal details and to opt-out of having them used for direct marketing purposes. This opt-out should be available at the time of collection and at any point thereafter. While the EU institutions are considering new legislation (GDPR), the 1995 Directive remains in force.

The EU’s current General Data Protection Directive provides for the free flow of personal data within the EU but also for its protection when it leaves the region’s borders. Personal data can only be transferred outside the EU if the third country’s legislation provides adequate protection for it or if the unambiguous consent of the data subject is secured. The European Commission has decided that a handful of countries have regulatory frameworks in place that guarantee the adequate protection of data transferred to them – the United States is not one of these.

However, the EU and the US are currently working to implement the Privacy Shield Framework, a data transfer mechanism that replaces the Safe Harbor Framework. Once the framework is formally approved, it will be a valid legal mechanism to transfer personal data from the EU to the United States in compliance with EU data protection laws. For further information and guidance on the Privacy Shield Framework please see: https://www.commerce.gov/privacyshield 

The Swedish Data Protection Authority (DPA, Datainspektionen) works to prevent encroachment upon privacy through information and by issuing directives and codes of statutes. Datainspektionen also handles complaints and carries out inspections. By examining government bills the DPA ensures that new laws and ordinances protect personal data in an adequate manner. Further guidance and information is available in English on their website at www.datainspektionen.se .

There are no measurements that prevent or unduly impede companies from freely transmitting customer or other business-related data outside Sweden’s territory. Sweden imposes no performance requirements on presumptive foreign investors.

Real Property

Swedish law generally provides for adequate protection of real property. Unoccupied property ownership cannot revert to other owners.

Intellectual Property Rights

Swedish law generally provides adequate protection of all property rights, including intellectual property and real property. As a member of the European Union, Sweden adheres to a series of multilateral conventions on industrial, intellectual, and commercial property.

Patents: Protection in all areas of technology may be obtained for 20 years. Sweden is a party to the Patent Cooperation Treaty and the European Patent Convention of 1973; both entered into force in 1978.

Copyrights: Sweden is a signatory to various multilateral conventions on the protection of copyrights, including the Berne Convention of 1971, the Rome Convention of 1961, and the WTO’s trade related intellectual property (TRIPS) agreement. Swedish copyright law protects computer programs and databases. More recently, Sweden gained notoriety as somewhat of a safe haven for internet piracy, due to rapid internet connection speeds, a lag in implementing EU Directives, and weak enforcement efforts. In 2009, however, Sweden implemented the EU’s Intellectual Property Rights Enforcement Directive (IPRED) 2004/48/EC, and continued to step up its enforcement against internet piracy. The last few years also saw the conviction of the operators behind the Pirate Bay.org, a notorious BitTorrent tracker for illegal file-sharing, and an increase in legal file-sharing. The 2010 appeal trial upheld the guilty verdict, signaling that Sweden is no longer a safe haven for internet piracy. Legislative measures, combined with added resources on the enforcement side and the emergence of successful legal alternatives all contributed to a substantial increase for music and film distribution using legal means since 2010. Moreover, Sweden has set up a Specialist Court for IPR-related cases, which will further increase efficiency by pooling specialist competence. The IP Court, the so-called Patent and Market Court, started operations on September 1, 2016.

Trademarks: Sweden protects trademarks under a specific trademark act (1960:644) and is a signatory to the 1989 Madrid Protocol.

Trade secrets: Proprietary information is protected under Sweden’s patent and copyright laws unless acquired by a government ministry or authority, in which case it may be made available to the public on demand.

Designs: Sweden is a party to the Paris Convention and the Locarno Agreement and Designs governed by the Swedish Design Protection Act as well as the Council Regulation on Registered and Unregistered Designs. Protection under the Act lasts for renewable terms of one or several five year periods with a total, maximum, protection time of 25 years.

Sweden is not listed in USTR’s Special 301 report. In the 2016 Notorious Market Report, a stream ripping site, Movshare Group, is alleged to have ties to Sweden and other countries.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en 

For additional information about treaty obligations and points of contact at local IP offices, please use the following contacts:

Resources for Rights Holders

Contact at U.S. Embassy Stockholm
Economic Unit
U.S. Embassy Stockholm
Dag Hammarskjölds Väg 31
115 89 Stockholm, Sweden
+46 (0)8 783 5309
StockholmICS@state.gov

Local lawyers list: https://se.usembassy.gov/u-s-citizen-services/local-resources-of-u-s-citizens/attorneys

Country/Economy resources: American Chamber of Commerce in Sweden – http://www.amchamswe.se 

Capital Markets and Portfolio Investment

Credit is allocated on market terms and is made available to foreign investors in a non-discriminatory fashion. The private sector has access to a variety of credit instruments. Legal, regulatory, and accounting systems are transparent and consistent with international norms. NASDAQ-OMX is a modern, open, and active forum for domestic and foreign portfolio investment. It is an official stock exchange and operates under specific legislation.

Money and Banking System

The banking crisis of the early 1990s changed the structure of Sweden’s banking sector, with a large number of savings banks being converted into commercial banks. Several foreign banks, including Citibank, have established branch offices in Sweden, and several niche banks have started to compete in the retail bank market. The four largest Swedish banks are Nordea, Skandinaviska Enskilda Banken (SEB), Svenska Handelsbanken and Swedbank. Danske Bank is the largest foreign bank and the fifth largest bank in Sweden.

A deposit insurance system was introduced in 1996, whereby individuals received protection of up to SEK 250,000 (USD 38,285) of their deposits in case of bank insolvency. This guarantee was increased to SEK 500,000 (USD 76,546) in the fall of 2008 in response to the onset of the global financial crisis, and altered to cover all types of accounts, regardless of the availability of account funds for withdrawal. On December 31, 2010, the maximum compensation was raised again as a result of amendments in the EC directive and is now the SEK equivalent of 100,000 euro.

The banks’ activities are closely supervised by the Swedish Financial Supervisory Authority, Finansinspektionen, (http://www.fi.se ) to ensure that all necessary standards are met. Swedish banks’ financial statements meet the international standards well and are audited by internationally recognized auditors only.

The Swedish Bankers’ Association (http://www.bankforeningen.se ) represents banks and financial institutions in Sweden. The association works closely with regulators and policy makers in Sweden and Europe. It also establishes joint rules in matters of common interest in the Swedish banking industry, such as payment infrastructure and security issues. The association also informs the public about the banking sector.

Sweden is not part of the Eurozone; however Swedish commercial banks offer euro-denominated accounts and payment services.

On August 8, 2014, the Agreement between the Government of the United States of America and the Government of Sweden to Improve International Tax Compliance and to implement FATCA was signed and has since gone into force. (http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-Sweden-8-8-2014.pdf ). For more information about the Foreign Account Tax Compliance Act (FATCA), please see: http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx .

The Riksbank is tasked with the role to function as Sweden’s central bank system.

Foreign banks or branches offering financial services must have an authorization from the Swedish Financial Supervisory Authority, Finansinpektionen (FI) to conduct operations. As part of the authorization application process, FI reviews the firm’s capital situation, business plan, owners and management. Parts of the firm’s daily operations may also require authorization from FI. The applicable regulatory code can be found at: http://www.fi.se/en/our-registers/search-fffs/2009/20093/ 

There are no report losses of correspondent banking relationships in the past three years and there are no current correspondent banking relationships that are in jeopardy.

Foreigners have the right to open an account in a bank in Sweden provided he/she can identify him/herself and the bank conducts an identity check. The bank cannot require the person to have a Swedish personal identity number or an address in Sweden.

Foreign Exchange and Remittances

Foreign Exchange

Sweden does not impose any restrictions on remittances of profits, proceeds from the liquidation of an investment, or royalty and license fee payments. A subsidiary or branch may transfer fees to a parent company outside of Sweden for management services, research expenditures, etc. Funds associated with any form of investment can be freely converted into any world currency.

In general, yields on invested funds, such as dividends and interest receipts, may be freely transferred. A foreign-owned firm may also raise foreign currency loans both from its parent corporation and credit institutions abroad.

Sweden adheres to a floating exchange rate regime and the national currency rate fluctuates.

Remittance Policies

There are no recent changes or plans to change investment remittance policies. There are no time limitations on remittances.

Sovereign Wealth Funds

There is no Sovereign Wealth Fund in Sweden.

The Swedish state is Sweden’s largest corporate owner and employer. 49 companies are managed through the Government Offices, 41 of which are entirely state-owned and 8 companies partially state-owned. Approximately 163,000 people are employed by these companies, including associated companies. Sectors which feature State-Owned Enterprises, SOEs, include energy/power generation, forestry, mining, finance, telecom, postal services, gambling, and liquor retail sales.

These companies operate under the same laws as private companies, although the government appoints board members, reflecting government ownership. Like private companies, SOEs have appointed boards of directors, and the government is constitutionally prevented from direct involvement in the company’s operations. Like private companies, SOE’s publish their annual reports, which are subject to independent audit. Private enterprises compete with public enterprises under the same terms and conditions with respect to access to markets, credit, and other business operations. Moreover, Sweden is a party of the General Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO).

A document listing the Swedish SOEs can be found here: http://www.regeringen.se/contentassets/81a724cb19784851be7d25d2132df9eb/
rapport-for-bolag-med-statligt-agande-januari-juni-16.pdf 

Swedish SOEs adhere to the OECD Guidelines on Corporate Governance for SOEs.

Privatization Program

The former coalition government (Moderate Party-led center-right also known as the Alliance Government) was elected in September 2006 with a goal of selling some USD 31 billion in state assets between 2007 and 2010 to stimulate growth and raise revenue to pay down the national debt. In 2008, the Swedish government sold liquor company V&S (Vin & Sprit AB) to French company Pernod Ricard for USD 8.3 billion and the Swedish OMX stock exchange to NASDAQ for USD 318 Million.

Further deregulation progress was made in the beginning of 2010 as the state-owned and former Government-run pharmaceutical company Apoteket was split into two parts, one public and one private. Approximately 600 pharmacies were sold to private enterprises.

The previously monopolized market for vehicle emissions testing was opened to certified private parties in 2010, the vehicle emissions testing centers were divided into three equivalent groups, two of which became independent subsidiaries.

This privatization trend was reversed in March 2011 by one vote in Parliament, led by the Social Democratic Party, putting a halt to the planned sale of stakes in SBAB bank, telecom firm TeliaSonera, power utility Vattenfall, and Posten, the Swedish postal service. Such a consolidated opposition indicates that the future of privatization will be a function of politics, and thus is difficult to predict.

However in 2013, the Swedish Government divested its remaining shares in Nordea Bank, and in Vectura Consulting, and in 2014 AB Bostadsgaranti, and resolved to divest the subsidiary Försäkringsaktiebolaget Bostadsgaranti. This divestment is part of the ongoing phase-out of Bostadsgaranti as a whole; the company’s remaining operations are expected to be terminated by 2016.

The Swedish center-left Government, voted into office in September 2014, has the mandate to divest or liquidate the holdings in Bilprovningen (Swedish Motor-Vehicle Inspection Company), Bostadsgaranti, Lernia, Orio (formerly Saab Automobile Parts), SAS and Svensk Exportkredit (SEK).

Although there are no indications that the current Government will use its mandate, it nonetheless decided in 2016 to let Vattenfall divest its German lignite operations to the Czech energy group EPH and their funding partners PPF Investments. The sale was made to adapt Vattenfall’s portfolio and to complete the transition to a carbon neutral operation.

Should the Government of Sweden decide to divest or liquidate the aforementioned holdings foreign investors can take part of the privatization program. There are currently no plans by the Government of Sweden to use its mandate.

If the Government of Sweden decides to divest or liquidate holdings then a public bidding process is likely to be implemented.

There is wide-spread awareness of responsible business conduct, RBC, among both producers and consumers in Sweden. All businesses are expected to comply with local laws and regulations, and to observe the international norms and principles for human rights, labor protection, sustainable development and anti-corruption. Firms that pursue RBC are viewed favorably, often publicizing their adherence to generally accepted RBC principles such as those contained in OECD Guidelines for Multinational Enterprises. Volvo Trucks, for example, has partnered with USAID in pursuing RBC efforts outside of Sweden. The Swedish National Contact Point for the OECD Guidelines can be located at: http://www.regeringen.se/artiklar/2015/12/nationella-kontaktpunkten-nkp 

Investors have an extremely low likelihood of encountering corruption in Sweden. While there have been cases of domestic corruption at the municipal level, most companies have high anti-corruption standards and an investor would not typically be put in the position of having to make a bribe to conduct business.

There are cases of Swedish companies operating overseas that have been charged with bribing foreign officials; however, these cases are relatively rare. Although Sweden has comprehensive laws against corruption, and ratified the 1997 OECD Anti-bribery Convention, in June of 2012, the OECD Anti-Bribery Working Group has given an unfavorable review of Swedish compliance to the dictates of that Convention. The group faulted Sweden for not having a single conviction of a Swedish company for bribery in the last eight years, for having unreasonably low fines, and for not re-framing their legal system so that a corporation could be charged with a crime. Swedish officials object to the review, claiming that lack of convictions is not proof of prosecutorial indifference, but rather indicative of high standards of ethics in Swedish companies. Over the last four years, a high-profile case involving telecom giant Telia Company’s operations in Uzbekistan has received considerable public attention and cost the CEO and other senior officials their jobs. Telia Company is in the process of divesting its operations in Uzbekistan following a probe by the US Department of Justice pertaining to illegal payments. In September 2016 U.S. and Dutch authorities indicated that Telia would be fined USD 1.2 billion over the company’s corruption in Uzbekistan. The fine is part of a settlement proposal.

Sweden does not have an agency devoted exclusively to anti-corruption but a number of agencies cooperate together. A list of Sweden’s Public and Private Anti-Corruption Initiatives can be found at http://www.business-anti-corruption.com/country-profiles/europe-central-asia/sweden/initiatives.aspx .

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Sweden has signed and ratified the UN Anticorruption Convention (see list of signatories at http://www.unodc.org/unodc/en/treaties/CAC/signatories.html ).

Sweden is party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (see list of signatories and their implementation reports at http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm ).

Resources to Report Corruption

The National Corruption Group at the Swedish Police, Nationella Korruptionsgruppen, handles the investigation of corruption offences and is engaged in preventive efforts. Corruption claims can be reported to the Group by calling +46 114 14

Watchdog organization:

Transparency International Sweden

Linnégatan 14
114 47 Stockholm
Sweden
Telephone: + 46 (0)8 791 40 40
E-mail address: info@transparency-se.org
www.transparency-se.org/In-English.html 

Sweden is politically stable and no changes are expected.

Sweden’s labor force of 5.1 million is disciplined, well-educated, and highly skilled in all modern technologies. About 68 percent of the Swedish labor force is unionized, although membership is declining. Swedish unions have helped to implement business restructuring to remain competitive, and strongly favor employee education and technical advancements. Management labor cooperation is generally excellent and non-confrontational. The Swedish Mediation Office, which mediates in labor disputes, reported in its summary for 2016 that there were no more notices of industrial action or conflicts than is usually the case when numerous agreements expire in the same year.

Sweden has a Co-determination at Work Act, which provides for labor representation on the boards of corporate directors once a company has reached more than 25 employees. This law also requires management to negotiate with the appropriate union or unions prior to implementing certain major changes in company activities. It calls for a company to furnish information on many aspects of its economic status to labor representatives. Labor and management usually find this system works to their mutual benefit.

The cost of doing business in Sweden is generally comparable to most OECD countries, though some country-specific cost advantages are present. Overall salary costs have become increasingly competitive due to relatively modest wage increases over the last decade and a favorable exchange rate. This development is even more pronounced for highly qualified personnel and researchers.

There is no fixed minimum wage by legislation. Instead, wages are set by collective bargaining by sector. The traditionally low wage differential has increased in recent years as a result of increased wage setting flexibility at the company level. Still, Swedish unskilled employees are relatively well paid, while well-educated Swedish employees are low-paid compared to those in competitor countries. The average increases in real wages in recent years have been high by historical standards, in large due to price stability. Even so nominal wages in recent years have been slightly above those in competitor countries, about 3 percent annually.

Employers must pay social security fees of about 31.5 percent. The fee consists of statutory contributions for pensions, health insurance and other social benefits.

Sweden has ratified most International Labor Organization (ILO) conventions dealing with worker’s rights, freedom of association, collective bargaining, and the major working conditions and occupational safety and health conventions.

More information on Sweden’s labor agreements and legislation in English can be found on the Swedish Trade Union Confederation’s website at http://www.lo.se/english/startpage .-

The Overseas Private Insurance Corporation, OPIC, does not operate in Sweden.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Table Source: Statistics Sweden http://www.scb.se/en/ 

Economic Unit
U.S. Embassy Stockholm
Dag Hammarskjölds Väg 31
115 89 Stockholm, Sweden
+46 (0)8 783 5309
StockholmICS@state.gov

U.S. Commercial Service
www.export.gov/sweden 
office.stockholm@trade.gov