Procedures for setting up a company in Sweden

In the ever-changing global economic landscape, identifying potential and stable markets for investment is an important factor to determine success on the road to brand development. Emerging as a model of sustainable development and economic stability in Northern Europe, Sweden has been affirming its position as the world’s leading attractive investment destination. Not only owning a high-purchasing economy, this Scandinavian country is also the cradle of technological breakthroughs. Therefore, more and more investors want to set up a company in Sweden. The procedure for establishing a company in Sweden will become fast, time-saving and cost-saving if investors understand the process, Viet An Law would like to provide some information about the procedure for establishing a company in Sweden through the article below.

Prepare information for setting up a company in Sweden

Choosing the type of company to set up

The selection of the type of business should be based on a comprehensive assessment of the expected size, the number of participants in the establishment, the level of risk tolerance in terms of legal liability, the need to raise capital and tax factors. Aktiebolag (AB) is often the optimal choice for those who wish to have a separate legal entity with limited owners’ liability. There are two main types including:

• Privat Aktiebolag: Shares are not publicly traded. Minimum capital of SEK 25,000.
• Publikt Aktiebolag: Shares can be publicly traded (listed). Minimum capital of SEK 500,000.

Choosing a company name

The name chosen must be unique and not confusing with other company names or trademarks registered in Sweden. For the Aktiebolag type, the name is required to contain the phrase “Aktiebolag” or the abbreviation “AB” at the end. After choosing a company name, you need to check the availability of the name:

• Preliminary check: Use the search engines on the website of Bolagsverket (Swedish Business Registry) and the Verksamt.se aggregator platform to preliminarily check if the name is already being used.
• Formal checks: Bolagsverket will carry out a formal check on the availability and suitability of the name during the processing of your company’s application for incorporation. However, doing your own testing before setting up your company will increase your chances of registering for incorporation and reduce the waiting time.

Prepare documents for setting up a company in Sweden

Prepare the Memorandum of Understanding for setting up a company

This is a document drafted and signed by the founders (Stiftare). This document includes important information such as:

• Information about the founders.
• Company name.
• Charter capital.
• The number of shares and the price per share.
• Information on board members (Styrelse), alternate (suppleaner) (if any), CEO (Verkställande direktör – VD) (if any) and auditor (Revisor).
• Draft of the company’s charter (Bolagsordning).

Draft the company’s charter

This is the company’s internal code of conduct, which regulates issues such as:

• Company name and line of business.
• Head office address.
• Minimum and maximum charter capital.
• Number of shares.
• Number of members of the Board of Directors and alternates (if any).
• Other regulations on the General Meeting of Shareholders, the Board of Directors, etc.

Contribute capital to the company’s charter

Founders or registrants who register to buy shares must fully deposit the charter capital into a bank account in the name of the future company. Capital can be contributed in cash or other assets (capital contribution in kind – apportegendom), but value appraisal is required.

Upon completion of the charter capital contribution, the Bank will issue a certificate confirming that the charter capital has been deposited into the account reserved for the established company.

Appoint the Board of Directors

Once the basic incorporation documents have been drafted, the next step is to formally appoint the individuals who will be responsible for running, managing, and overseeing the company’s operations. Roles to be appointed include the Board of Directors, (if applicable) alternate member, (if applicable) CEO, and (if required or decided) Auditor.

• Board of Directors (Styrelse): This is the highest governing body of the company, responsible for the overall management and organization of AB’s activities.
  • Privat Aktiebolag: Minimum 1 official member. If there are only 1 or 2 full-time members, it is mandatory to have at least 1 suppleant. If there are 3 or more official members, alternate members are not required but are encouraged.
  • Publikt Aktiebolag: Minimum of 3 official members.
  • The board needs to appoint a Chairman (Ordförande), which is mandatory for Publikt AB and is usually done both within Privat AB to coordinate meetings.
• Alternate Members (Suppleaners): These people will replace the official members of the Board when they are absent or unable to perform their duties. As stated, an alternate member is required if the Board of Directors of Privat AB has only 1 or 2 members.
• Managing Director (Verkställande direktör – e.g.): This position is responsible for running the day-to-day affairs of the company under the direction and supervision of the Board of Directors. The appointment of a VD is mandatory for Publikt Aktiebolag. For Privat Aktiebolag, having a VD or not is optional, unless the size of the company is so large that it is mandatory.
• Auditor (Revisor): The auditor is responsible for examining the accounting books and management activities of the Board of Directors and etc., and then reports the results to the General Meeting of Shareholders. The appointment of an Auditor is mandatory for Publikt Aktiebolag and large-scale Privat Aktiebolag (meets at least two of the three criteria in terms of average number of employees, total assets and net revenue for two consecutive financial years). For small Privat Aktiebolag, the presence or absence of an Auditor is optional, unless specified in the company’s charter or required by a certain number of shareholders. If required, the Auditor must be a certified/qualified person as prescribed.

Requirements for Appointed Individuals:

• Board members, alternates, and CEOs must generally be at least 18 years old, not be declared bankrupt or banned from business.
• Note for foreigners: Sweden has residency regulations for the management. Usually at least half of the official and alternate Board members, as well as the CEO (if any), must reside in the European Economic Area (EEA). If the company does not meet this requirement, you will need to register a contact person residing in Sweden to receive legal notices on behalf of the company, and may need to obtain an exemption from Bolagsverket. Non-EU/EEA citizens who want to own a business and reside in Sweden need a residence permit for this purpose.

Apply for setting up a company in Sweden

Prepare documents

• Memorandum of Incorporation;
• Charter of the company;
• Banking Certificate;
• Application form 816e (Enrollment);
• Other documents (e.g. power of attorney, proof of residence).

Submit company establishment documents

• Submit online via Verksamt.se: This is the recommended method. Online filing usually has a lower fee than filing a hard copy, and the processing time is also significantly faster. The Verksamt.se platform also helps to integrate registration with both Bolagsverket and Skatteverket in the same process. However, to use this online service, applicants usually need to have a Swedish personal identification number (personnummer) and use the Swedish electronic identification system (e-identification). If you are a foreigner who does not have a personnummer, you can authorize a qualified representative.
• Submit a hard copy by post: This is the traditional method, suitable if you can’t use the online service. You need to print out the application form (Form 816e) from the Bolagsverket website, fill it out, sign it, attach the supporting documents and send it to the Bolagsverket address.

Upon receipt of the incorporation documents, Bolagsverket will conduct a review of the documents to ensure they are valid and compliant with the law. If there are any omissions or additional requests, Bolagsverket will contact you. Once the application is approved, your company will be officially incorporated and issued a business registration number.