Doing business in Sweden, a country overview

1. Doing Business in
Sweden
Sherif Mohamed
Stefan Schübel

2. Agenda
Geography &
History
Demography
Economic Status
Doing Ease of
Business
Business in doing
Entities
Tax Labor Law
Sweden business
Business Culture

3. GEOGRAPHY & HISTORY
3

4. 4

5. 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

6. 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.
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7. 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
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8. DEMOGRAPHY

9. Demography
General
• Human Development Index: 0.885 in 2010
• Ranked place 9 out of 169
• GNI: $36,936
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10. 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
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11. 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
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12. Demography
Religions
• 87 % Evangelical Lutheran
• 13 % Roman Catholic, Orthodox,
Baptist, Muslim, Jewish and
Buddhist
Weather
• Influences: Gulf Stream, Atlantic
winds
• South: temperate
• North: subarctic
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13. Demography
Society
• “Swedish welfare policy”
Large public sector + welfare
system
• “the Swedish model”
• “the third way”
• “ the middle way”
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 14

14. Government
• Constitutional
Monarchy.
• Civil law system is
influenced by the
Roman-Germanic
Authority
law.
Monarch
Legislative Executive Judicial
Branch Branch Branch
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15. ECONOMIC STATUS

16. 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 €
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17. 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 %
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 18

18. 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%
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19. 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
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20. 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
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 21

21. DOING BUSINESS IN SWEDEN

22. 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

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
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 24

24. Business Entities
Business Entities
limited partnership
branch of a foreign
(kommanditbolag-
company (filial)
KB)
limited Liability
Company Others
(aktiebolag-AB)
Geography & History * Demography * Economic Status * Doing Business in Sweden * Business Culture 25

25. 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
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26. 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.
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27. 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.
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28. 29

29. 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
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30. 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.
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31. 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
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32. 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
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33. 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
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34. BUSINESS CULTURE

35. 36

36. 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.
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37. 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.
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38. Thanks for your Attention 39

39. Thanks for your Attention…..