Starting Up a Business
Information and guidance from the authorities
Do you want to start a business?
In this brochure you get with an overview of what you need to know and do to start up and run a business.
We present the information in phases that many entrepreneurs go through: Considering, Starting, Running, Developing and Closing down. Our headings give you a view of what life as an entrepreneur may be like.
This brochure is one of several products from eleven cooperating authorities where we bring together information and services to make it easier for you. You can also check out the website verksamt.se, where you can find more information and e-services from several authorities gathered in one place.
At verksamt.se you can find information and services from Swedish authorities when you want to start and run a company. At verksamt.se you can write your business plan, register your company, apply for F-tax and much more.
Good luck with your life as an entrepreneur!
Are you considering starting up a business? If so, you need an idea that you can turn into money. Formulating your business idea is the first step towards fulfilling your dream of becoming an entrepreneur.
Your business idea is your idea of what you are going to sell, how you are going to do it and to whom. The business idea also points out the strength and unique competence of your company.
Formulating a business idea is a crucial step when you want to become an entrepreneur. A thorough business idea increases your chances of success. Your business idea should include answers to the following questions:
When you have identified your business idea you should write it down. Make it short and uncomplicated – a few sentences is enough.
Attend a “Starting up a business” day!
Starting up a business while employed
You can combine employment with running your own business. However, you cannot work with anything that competes with your employer’s business, nor do anything disloyal to your employer. In some cases, your employment contract will specify your options for running your own business alongside your employment. It is always best to discuss your plans with your employer before starting up your business.
The amount of tax you pay will be determined by your total income from employment and your own business. If you are a sole trader, you should apply for FA tax (FA-skatt).
Starting up a business while unemployed
Job seekers who have a good chance of succeeding with their business can, in some cases, receive support and help to start a company. Through Sweden’s Public Employment Agency you can also get your business idea tested and an education in how to start a business. The support is called Support for Starting a Business (Stöd till start av näringsverksamhet) and is a financial assistance when starting your business. You can get this support for up to six months while working on starting up your business.
The financial assistance consists of an activity grant or introduction benefits. The level of the activity grant is equivalent to the unemployment benefit you received before your start-up. If you have not been entitled to unemployment benefits, you may still receive a lower grant set by the Social Insurance Agency. Recently arrived migrants with an introduction activities plan established by The Public Employment Agency can receive introduction benefits. The support is taxable and treated, for example, as income for pension calculations.
To receive an activity grant, you must
In some places in Sweden, employees are also eligible for support to start their own business. The Special Business Start-up Grant is for people who want to start their own business, but have a disability that entails a diminished work capacity. This support is to be used for investments, etc. The Public Employment Agency can provide information on the amount of assistance available.
If you are newly arrived in Sweden and have an introduction plan you will receive an introduction benefit instead of an activity grant.The Public Employment Agency decides whether to grant you the financial assistance. An external consultant helps to assess your business concept. It has to be sufficiently profitable and able to provide sustainable financial support.
The Public Employment Agency will also consider your ability to run your own business. You can have begun the starting up phase, but basically you cannot have received any revenue. For instance, you may not have raised a bank loan or sent any invoices to customers.
Starting up a business as a student
You can start a business while studying. Just remember that if you are receiving financial aid from the Swedish National Board of Student Aid (CSN), both your student loan and study grant will be reduced if you earn more before tax than a set maximum amount. How much you can earn per sixmonth period depends on how many weeks you receive student funding.
Generally, you must have turned 18 to be allowed to start a business. If you have turned 16 or 17, you need permission from your legal guardian and from the Chief Guardian in your municipality to run a business. Your legal guardians are often your parents, and in every municipality there is a Chief Guardian. Together with your parents you apply for permission from the Chief Guardian, using a specific form that you can get from your municipality.
Running a business after turning 65
You can run a business when you start to take out your pension. If so, your social contributions will be reduced and you will get a higher earned income tax credit.
Hobby or business?
One way of starting is to turn your hobby into a business. This requires that you carry out your activities
Your business must be conducted on a regular and lasting basis, over an extended period of time. The purpose of the business must be to earn a profit. You must be able to show that your business is estimated to provide a financial surplus in the long term.
If your business meets these three requirements, it is considered to be a business enterprise and not a hobby. It may be time to apply for your F tax with the Swedish Tax Agency and begin life as an entrepreneur.
If you want to do temporary assignments for different clients without starting your own business, independent contracting may be an option. As an independent contractor, you are connected to an umbrella company that acts like an employer and manages your administration for a commission. Read more on verksamt.se.
Regardless of what you intend to work with, you gain a great deal by planning your business start and being well prepared. One way of getting started is to describe your business concept in a business plan.
Create your business plan
The business plan is a tool that helps you plan your business start. In the business plan, you describe how you are going to put your business concept into effect so that you have clear objectives for your operations. Think through your business concept carefully before starting up. Describe
The business plan must be easy to understand. Although it has to be factual and attract interest. Keep in mind that suppliers, customers and your bank may want to see your business plan.
A business plan may vary in detail depending on the nature of the business. It has to be a living document that keeps pace with the development of your business and is updated regularly.
Your business plan should include three budgets: a start-up budget, a profit budget and a cash flow budget.
You need the business plan for yourself in particular. Only when you yourself have a good grasp of what you want to do in your business and how you are going to do it, can you be more convincing in getting other people to listen and take an interest.
Financing your start
You need money to start up a business. For many businesses, bank loans are the most important form of finance. To approve loans, lenders prefer businesses to be making good sales and turning over a profit. New businesses are unable to do this. In this situation, the bank will usually want you to provide private security or name a guarantor for the loan.
How much you can borrow depends on the estimated risk involved in your business concept. This risk factor also determines how much collateral you must provide.
Remember to include interest and loan repayments in your budget to give you a good overall view of the costs and expenses in your business.
If you only need a small amount of money, banks offer an overdraft facility. Then you can use the credit on your account to finance your purchases for a period of time. This may be more expensive than a bank loan, but could work well as a short-term loan.
You can also finance your business by renting, leasing or buying items on instalment instead of paying for everything at once. It may be more expensive than borrowing or using your own funds, but you do not need to have access to as much cash when you begin.
Find out whether you need a permit or not
When you start a business, it is important to find out whether the business needs to have a permit from, register with, or make some other notification to any public authority.
This may involve special requirements on
Licensing and supervisory authorities may be local, regional or national. Local and regional authorities include municipalities, county administrative boards and police authorities. The Swedish Data Inspection Board, the National Food Agency and the Swedish Board of Agriculture are examples of national authorities.
Register beneficial ownership
Swedish companies, associations and legal entities must register beneficial ownership information, except sole trader businesses. A beneficial owner is someone who ultimately owns or controls a company, association or other type of legal entity. A beneficial owner can also be someone who benefits from someone else acting on their behalf. Newly registered companies and associations must register beneficial ownership information within four weeks from their registration date. You can find more information about beneficial ownership on bolagsverket.se/en.
Choose the form of business enterprise
There are different forms of business and they work in different ways. When choosing your form of business, consider what suits you and your situation the best. A summary of the most common forms of business enterprise is shown below.
Sole trader business
As a sole trader, you run and are responsible for the business as a private person. You are personally responsible for agreements being kept and liabilities being paid, but you must keep the finances of the enterprise separate from your own private finances. No starting capital is required for sole traders. In most cases, the business does not have to be audited, although taking expert financial advice may nevertheless be wise.
If you run your business as a sole trader you can employ staff. However, you cannot employ your husband or wife. If you both work in the business, you may instead share the profit between you. The same rules apply for cohabiting partners with mutual children.
Your business will be identified by your personal identity number. You may, but do not normally need to register the business with the Swedish Companies Registration Office. If you do so, the business name is protected in the county in which you are registered. Besides the name protection, there may be other reasons to register the business with the Swedish Companies Registration Office. For instance, you may need to have a registered enterprise if you intend to submit tenders in public procurement processes or if a licence or permit is required for certain activities.
If you want to run your business with somebody else, you can form a trading partnership. The trading partnership has to have at least two owners, referred to as partners. You are not counted as employees, but the trading partnership may employ staff.
A trading partnership must be registered with the Swedish Companies Registration Office. The business gets its registration number and business name through the registration. The name of a trading partnership is protected in the county in which it is registered. The partners have to agree to operate a trading partnership before registering with the Swedish Companies Registration Office. This agreement should be in writing so you remember what you decided on the division of labour, how profits or losses are to be distributed and what happens if a partner wants to leave, for instance. This type of agreement is known as a partnership agreement or articles of partnership.
No starting capital is required for a trading partnership. You decide how much you want to invest in the business. You do not have to register the starting capital anywhere.
As partners, you represent the trading partnership and have joint influence. You are personally and jointly responsible for ensuring that the partnership’s debts are paid. Consequently, you may be forced to pay the partnership’s debts from your own private finances. You can then in turn make a claim against the trading partnership or the other partners for their share of the debt.
If any of the partners is a legal entity and if the entity is of a certain size the trading partnership must have an approved or authorised public accountant. Even if the partnership is not required to have an accountant, it may be wise to have a competent financial advisor. Trading partnerships must register beneficial ownership information with the Swedish Companies Registration Office.
The rules for a limited partnership are the same as for a trading partnership, with a few exceptions. In a limited partnership, there are two different kinds of partners: general partners and limited partners. A general partner is liable for all the debts of the partnership. Limited partners are only liable for the capital investment they made in the company. This investment has to be registered with the Swedish Companies Registration Office. Limited partnerships must register beneficial ownership information with the Swedish Companies Registration Office.
When starting a limited company, you need a minimum of SEK 50,000 in share capital. The capital may consist of funds or of property that the company has a use for, so called contributions in kind. When you own shares in a limited company, you are at risk of losing the invested capital if the limited company goes bankrupt. The shareholders are not personally liable for the company’s debts and other commitments. However, members of the board of directors may be personally liable if they mismanage their assignments. A limited company must have a board of directors with one or more members. If the board members are less than three, there must also be at least one deputy member appointed.
Small companies may choose not to have an auditor but all limited companies must file an annual report with the Swedish Companies Registration Office. You must also register your limited company with the Swedish Companies Registration Office. Before registering, you should decide in writing to start the company by setting up a special document, known as the memorandum of association. The memorandum of association must contain a draft of the articles of association. As a founder of the company, you should also subscribe to a number of shares. You do this by stating in the memorandum of association how many shares you subscribe to. When you register your company, the limited company will be given a registration number. Limited company names are protected throughout Sweden. Limited companies must register beneficial ownership information with the Swedish Companies Registration Office.
An economic association is formed by a minimum of three members. The association is created to enable members to benefit financially from the association’s operations, Every member normally has a vote at the general meetings of the association. It is usually said that associations are based on democracy, commitment and responsibility.
Every member pays a contribution and usually an annual membership fee. The association decides how large the contribution should be. Members are not personally liable for the association’s debts and other commitments in excess of their contribution. However, those who are members of the Board can be held personally liable if they mismanage their assignment.
An economic association must be registered with the Swedish Companies Registration Office before it can start doing business. Members of the association start the association and write the regulations. The association will be given a registration number when it registers with the Swedish Companies Registration Office. Economic association names are protected throughout Sweden. An economic association must have an auditor. The auditor of smaller economic associations does not need to be an approved or authorised public accountant, but must be competent for the assignment. Economic associations must register beneficial ownership information with the Swedish Companies Registration Office.
Lantmäteriet is the authority responsible for forming community associations. A community association is a great way to organize the management of land and facilities owned jointly. The owners of the properties who have a share in an association are automatically members of the community association. Community associations must register beneficial ownership information with the Swedish Companies Registration Office.
Choose the form of business
|F or FA tax (FA tax for income from both the business and employment)||The partnership: F tax Partners: SA tax (special debited A tax)||The partnership: F tax Partners: SA tax (special debited A tax)||The company: F tax The owners: A tax (employees)||The association: F tax The members: A tax (employees)|
|The business operator is taxed for the surplus (income tax + social security contributions).||Partners are taxed for their part of the partnership’s surplus (income tax + social security contributions).||Partners are taxed for their part of the partnership’s surplus (income tax + social security contributions).||The company is taxed on its profit (corporation tax). The owners are taxed on salary withdrawn and possible dividends (income tax + possible gains tax).||The association is taxed on its profit (corporation tax). The members are taxed on salary taken out and possible dividends (income tax + possible gains tax).|
Register your business
When registering your business, you use your electronic ID to login to Mina sidor at verksamt.se. This e-service is only available in Swedish at the moment.
If you start a limited company, trading partnership, limited partnership or economic association you need to register your business with the Swedish Companies Registration Office. If you start a community association you need to contact Lantmäteriet specifically.
No matter your business type, you need to provide information to the Swedish Tax Agency, to
An electronic ID (eID) is an electronic identity document comparable to physical identity documents, for example identity cards or drivers licenses.
An eID provides secure identification online. An eID may be in the form of a file on disk, on smart card or a mobile BankID on a smartphone or a tablet computer. You can easily obtain an eID from a bank or Telia.
Register your business with an electronic ID
If you have an electronic ID, you can quickly and easily take care of matters related to your business enterprise on verksamt.se. These e-services are only available in Swedish at the moment. You can for example
By using e-services you
Select the right industry code(SNI)
When you register your company with the Swedish Tax Agency, you must enter the SNI code. SNI stands for Svensk Näringsgrensindelning (Standard Industrial Classification) and the classification is based on an EU standard. An SNI code consists of five digits and describes the activities you are going to conduct. It is Statistics Sweden (SCB), who uses the data for economic statistics and for SCB’s business registers where all Sweden’s companies are to be included. You can find SNI codes at www.sni2007.scb.se.
Protect your business
Information security is about taking action to prevent information from getting in the wrong hands or to be destroyed. Common threats to your information are that someone wants to access your password to use your online identity or your card details to make purchases at your expense. Sometimes the computer is crashing or is infected with viruses.
Technical protection is important, but just as important is how you and your employees act on the internet and how, for example, passwords, e-mail, and e-mail login are handled. A good rule of thumb is that you keep your roles as entrepreneur and individual separated. For example, you should have one computer for the company and one private.
To protect your business, it is also good to use e-services instead of paper forms and a digital mailbox for all your government posts. You should also save your information in two places.
Protect the business name
When you start limited companies, trading partnerships, limited partnerships and economic associations, you have to choose a business name. If you are a sole trader you can choose to register your company name with the Swedish Companies Registration Office. If you do not choose a name your name will automatically be the same as your first and last name. By registering your business name with the Swedish Companies Registration Office you protect it from being used by others in your line of business.
Examples of business names
Examples of why a business name is not approved
Check your business name
When you have a suggestion for a business name, you can use the e-service “Sök företagsnamn” (Search company name) at verksamt.se to check if it is registered with the Swedish Companies Registration Office. Even if you do not find a similar name, it is not certain that the name can be registered since the Swedish Companies Registration Office also takes other factors into account.
Protect your trademark
Your trademark characterises your product or service. A strong trademark that customers associate with good quality and reliable origin is essential if you want to succeed in business.
By having a trademark protection, you prevent your competitors from taking advantage of the characteristic features or your product. Your trademark does not need to be the same as your business name. You may need more than one trademark for your products or services.
The Swedish Patent and Registration Office can give you practical advice to help you with your application.
Insuring yourself and your business
Keep in mind that your private home insurance will not cover your business. You should therefore think about what insurance coverage you and your business should have.
There are several types of business insurance.
As an entrepreneur, if you become unemployed and seek compensation from unemployment insurance, special rules apply in addition to the general conditions. You are considered to be unemployed only if all activities in the business have ceased.
If you or anyone closely associated with you should resume the activities, five years must pass until you may be considered unemployed, unless the business is permanently terminated.
To be regarded as permanently terminated, the business normally should be closed down or taken over by someone else. You may not be personally active in the business or have any significant influence over it.
You must be a member of an unemployment fund in order to claim benefits based on your income.
Life and accident insurance
You should consider obtaining life and accident insurance. An insurance of this kind will provide you with compensation if you are injured or disabled at work. If you have to quit working due to the injury, you can receive a disability pension and a supplementary pension. Survivor’s protection is provided in case of death.
Labour market insurance is mandatory if you employ staff and are bound to a collective agreement or a so called “local collective agreement” with a trade union organisation.
National retirement pension and occupational pension
As an entrepreneur, it is your own responsibility to ensure that you earn your retirement pension. To be entitled to national retirement pension, it is important that you pay social security contributions or employer’s contributions and pension contribution through the tax. This means that you need to draw salary or take out profit to build a solid base for your future retirement. The higher salary or profit you take out, the more pension credits you earn. There is however an upper limit. For 2019 this limit is SEK 43,309 per month before tax.
As an entrepreneur, it may also be wise to compensate for not having an occupational pension. This is a pension most employees in Sweden receive through their employer. The occupational pension is about 4,5 per cent of the salary, and you should try to compensate for that by saving the corresponding amount each month.
Handling personal data
As an entrepreneur, you will handle personal data, which is data that can be linked to a living person. This can mean an email adress to a customer, data on or photos of your employees. The EU has decided what data you may collect on others and how to handle this data (the General Data Protection Regulation: GDPR). The most important principles when processing personal data are:
Read more on verksamt.se.
Are you considering starting up a sustainable business where you can combine a profit with environmental concerns and social responsibility? Running a sustainable business can make you more competitive and create new business opportunities.
Depending on your business, there may be advantages to starting and running your business in the countryside.
Get started with your marketing
Marketing is about getting your business to be seen and building relationships. It is also about how your company is perceived by others, that is, your brand. It’s useful to complete a detailed marketing plan describing goals and efforts to achieve those goals.
You also need to specify your target group, namely who should be your customers. One of the keys to being successful is to see what kind of needs or problems your customers have and then offer them a solution. You need to find a convincing way to tell customers that you are there so they can choose your product or service. Keep in mind that you can handle a lot of your marketing with relatively small resources and your own work.
A good first step may be to create a clear, customer-oriented website that informs your customers about your services or products. For example, in order for your customers to find your site, you can work with search engine optimization and social media.
Take good care of your assets
By protecting your trademarks and other intellectual properties, like patents and designs, you can get unique advantages over your competitors. This way you can increase your chances of making a profit out of your products and services.
Contact the Swedish Patent and Registration Office for more information on how to take care of your assets and be more successful in business.
Finding your business premises
Many people start their business at home, while others need commercial premises. Start with thinking about your requirements for the premises. Is a central location important or is it more important to have a loading dock and a large car park? Do you need an office, warehouse or staff rooms?
When you have found the premises you would like to rent, be sure to read the lease carefully. You need to know what the rent includes and the period of notice. The premises must also meet requirements imposed by the authorities. The requirements depend on your business. For instance, there may be requirements for availability and safety. You are responsible of finding out how to meet the requirements for your premises.
Contact the landlord if you want to make changes to the premises. Find out whether the landlord is willing to bear the costs of renovation and if you need building permits. Also contact an insurance company and find out if they have any requirements regarding the premises before insuring them.
Is your visiting address different from your postal address?
It is important that you study the rules that apply to your tax payments early on. Moreover, you will benefit from having proper accounting from the beginning. It saves time, money and unnecessary work.
You are obliged to keep accounts of all financial transactions in the business. A transaction refers to when you buy or sell something or raise a loan, for example.
Keep account of the business transactions
Accounting is a useful tool in your business. Your accounts enable you to monitor operations and steer your business towards its targets. The answers to many questions are in your accounts. How much money can you withdraw for yourself? How is the business doing? Can you make the investments you were planning on? Can you afford to employ staff? Accounting is also important when you need to show others how your business is doing. You may want to borrow money from the bank or obtain credit from a supplier. You can also obtain details from your accounts for your income tax return.
You are obliged to account for all the business transactions in your company. A business transaction is any event that affect the economy in your business – a change in assets or debts, as well as any costs and revenues.
Whether you do the accounting yourself or hire help depends on how much you know, how interested you are and how much time you can devote to it. However, even if someone else does your accounts, you do need to understand them. Responsibility always rests with you.
Sole traders and trading partnerships owned by natural persons and with a turnover of less than SEK 3 million are permitted to compile simplified annual accounts. Simplified annual accounts consist of an income statement and a balance sheet. More information is available on www.skatteverket.se.
Do you need a cash register?
If you sell goods and services for cash payment or payment by credit card, you must have a certified cash register. A cash register is the system in a physical cash box that registers all payments. You have to report a cash register at the same time as you report your business to the Swedish Tax Agency. There are businesses exempt from this rule. More information about cash registers is available on www.skatteverket.se.
Making tax deductions
You may make deductions in your income tax statement for what you need to be able to maintain the business. This may, for example, be a matter of having an office at home, a company car or costs you had before the business began operating.
Paying tax on the earnings of the business
The profit of the business is taxed in a variety of ways depending on the form of business enterprise. The profit is the difference between income and expenses. Income consists mainly of the funds received by the business when it sells goods and services. Expenses are the expenditures necessary to run the business. Some expenses may not be fully deducted at the time of purchase, but must instead be depreciated over several years.
Sole traders, trading partnerships and limited partnerships are not taxed on their profits. The profit instead provides the basis for the taxation of the trader or the partners. More information on how taxation works is available in the section Receiving remuneration or salary.
In a limited company or an economic association, the actual company or association is taxed on the profit through corporation tax. You must pay preliminary tax on the profit or surplus, see the section Receiving remuneration or salary. You pay the preliminary tax through deposits into your tax account www.skatteverket.se and they must be recorded no later than the due date, usually the 12th of every month. A couple of times a year you should check that you are paying the correct preliminary tax. You should neither pay too much nor too little. If your preliminary tax needs to be adjusted, you can file a preliminary income tax return with the Swedish Tax Agency at any time.
Receiving remuneration or salary
If you conduct business as a sole trader, trading partnership or limited partnership, you may not draw salary from your business. If you deposit or withdraw money from the business, the profit is not affected. Consequently, it also does not affect how much tax you must pay.
As a sole trader, you make a standard deduction for social security contributions from the profit. You have now calculated the surplus from your business operations. Income tax and social security contributions are calculated based on this surplus. The surplus is also used by the Swedish Social Insurance Agency to calculate the income on which your sickness benefits are based, and by the Swedish Pensions Agency to calculate your pensionable income.
In a trading partnership or limited partnership, the partners (co-owners) share the profit or loss. You make a standard deduction for social security contributions from each partner’s individual share of the results. You have now calculated the surplus for each partner. This surplus is then used when calculating each partner’s income tax and social security contributions. The partners’ surplus is also used by the Swedish Social Insurance Agency to calculate the income on which their sickness benefits are based, and by the Swedish Pensions Agency to calculate their pensionable income.
You pay national income tax on income over a certain amount. Keep in mind that national income tax is calculated on the total income from your employment and from your business activities.
In a limited company or an economic association, as an owner or member, you are also viewed as an employee if you are active in the company or association. The remuneration you withdraw from the company is thereby considered to be salary. This salary and your employer’s contributions are deductible expenses for the company or association.
The fact that you, as an owner or member, are viewed as an employee means that you must register the company or association as an employer with the Swedish Tax Agency. The company or association is your employer and must therefore pay employer’s contributions and preliminary income tax for you and other employees.
A limited company can pay all or part of its profits to its shareholders. This payment is not regarded as a salary to the shareholder, but is taxed as income from capital.
Remember that dividends do not form a basis for calculation of your future pension or the income on which your sickness benefits are based. Special rules apply for what are known as close companies. A close company is a limited company or an economic association where four or less partners own shares that correspond to more than 50 percent of the votes.
If an economic association makes a profit, the association can distribute profit to its members as a bonus. This profit is not regarded as a salary. Consult the Swedish Tax Agency for more information on taxation of such profits.
When you pay taxes and charges on your salary or profit, you earn credits for your national retirement pension.
How VAT works
VAT is a tax on goods and services. When you sell something in your company, you add VAT to your price. When you buy something for your company, the seller has also added VAT. On most goods and services, 25 percent is VAT, but there are exceptions. You must report the VAT in a VAT return to the Swedish Tax Agency. The difference between the VAT on what you have sold (output VAT) and the VAT on what you have purchased (input VAT) determines whether you need to pay VAT or will get a VAT refund. Depending on the turnover your company has and what you selected in the registration, you will submit a VAT return every month, every three months or once a year. More information on how often you need to submit VAT can be found on skatteverket.se. If you have an income of no more than SEK 30,000 in one year, you are exempt from VAT. The exemption applies to own sales within the country. The exemption does not apply to purchases of goods and services when you as a buyer are required to report and pay the output VAT. You do not have right of deduction of VAT when you are exempt from paying it.
|once a month, every three months or once a year|
|once a month or every three months|
Closing the accounts and filing an income tax return
Once the financial year is over, you have to sum up how the year went, i.e. close your annual accounts. Simply put, this means that you sum up the income and expenses in an income statement as well as assets and liabilities in a balance sheet. The rules on the closing of the accounts differ depending on the form of business enterprise you have and the size of your turnover.
You then complete your income tax return using the information in your annual accounts.
If you are a sole trader you report your profit or loss in a special supplement to your income tax return.
If you have a trading partnership you must file an income tax return. Each partner reports his or her share of the trading partnership’s or limited partnership’s profit or loss on a special supplement to their income tax return.
If you have a limited company or a economic association you must file an income tax return and report the company’s profit and the taxes the company must pay itself. Shareholders or members of the economic association file information on their salary and any dividends or bonuses in their income tax return.
Submit the return with the Swedish Tax Agency. They calculate your tax liability for the year and compare it with the preliminary tax you have paid during the year. If you have paid too little tax over the year, you have to pay more; but you will receive a refund if you have paid too much. You can easily file the return on the Swedish Tax Agency website.
Submitting your income tax return, your VAT return, PAYE return and your payments on time
You will have to pay a penalty if you file your return late. If you pay the enterprise’s tax, VAT or employees’ taxes and social security contributions too late, you must also pay the interest expense and are at risk of the debt being transferred to the Swedish Enforcement Authority (Kronofogden) for collection. This costs extra and the enterprise is issued with a record of non-payment. Moreover, your approval for F tax can be revoked.
You can also be issued with a record of non-payment if you do not take care of payments other than taxes and social security contributions, such as payments to suppliers. With a record of non-payment, it may be difficult to get a loan, buy something on instalment, get a credit card, etc. If you conduct business as a sole trader, your private finances are also affected and it may be difficult, for example, to rent a flat or arrange a telephone subscription.
The credit-rating agencies decide whether or not you are issued with a record of non-payment. They do so by making an assessment of a large amount of information from various sources, including the Swedish Enforcement Authority. This data is used to provide information to people or enterprises when you want to borrow money, make purchases on instalment or the like. These people or enterprises then decide whether or not you can borrow money or make such purchases.
File the annual report in time
In some cases, you must to prepare an annual report and send it to the Swedish Companies Registration Office. This applies to
It is important that you file your annual report in time to the Swedish Companies Registration Office. If you run a limited partnership you will have to pay a late filing penalty if do not submit the report in time.
In some cases, you must also provide statistics to Statistics Sweden (SCB). You are required by law to provide SCB with information regarding your business, if SCB so requires. If this is the case, SCB will contact you with more information.
Parts of SCB’s business registers are public and can be used by industry, municipalities and other authorities. Therefore, you should update your company’s information on a regular basis. Log in to verksamt.se to change the information about your company.
Would you like to know more about accounting, tax and VAT?
If you hire somebody, you become an employer. This is true even if it is you yourself you hire (if you have a limited company or an economic association). Becoming an employer has several implications:
You report salaries, taxes and employer’s contributions for each employee every month in a PAYE return – even if you have not paid any salary.
The Swedish Public Employment Agency offers a free service when you need to recruit staff.
In some cases, you can get financial support from the Swedish Public Employment Agency when you hire someone. This applies if you, for instance, hire a person who is newly arrived in Sweden, someone who has been unemployed for some time or a young person who needs to gain work experience. The financial support compensates for parts of the salary and enables you to gain valuable skills for your company.
If an employee falls ill
When an employee falls ill and cannot work, you must pay sick pay up to and including the fourteenth sick day. You have to make a 20 percent deduction from the employee´s sick pay. On day 8, the employee must submit a medical certificate. If the employee is still ill after day 14, you must file a notification of illness with the Swedish Social Insurance Agency (Försäkringskassan). The employee can then apply for sickness benefits from Försäkringskassan.
The rules regarding sick pay apply as of the first day of employment if the employment agreement applies until further notice or is limited in time to one month or longer. Even for shorter periods of employment, the employee may be entitled to sick pay under certain circumstances. If the employee is not entitled to sick pay, they may instead be entitled to sickness benefits from the Swedish Social Insurance Agency.
Contracting another business operator
If you purchase a service from a sole trader, such as a craftsman to furnish your premises, you have to check whether that person has F or FA tax. If the person you engage only has A tax, you must withhold taxes and pay employer’s contributions on the pay for services rendered.
If the person you engage has written on an invoice, tender or the like, that he or she is approved for F tax this information applies. If you nonetheless want to check that the person is approved for F tax, you can contact the Swedish Tax Agency.
There are a lot of important dates for entrepreneurs to keep in mind, for example
You can find information about these important dates on www.skatteverket.se.
If you fall ill or have children
As a business operator, you are covered by health and parental insurance. The benefit you receive will be based on the income from which your sickness benefit is calculated. The Swedish Social Insurance Agency calculates this income in various ways, depending on what form of business enterprise you have.
Businesses under construction
If you are in process of starting up your business, you are entitled to extra protection for the first three years as self-employed. During this time, the level of your sickness benefit is based on a fictitious income, equal to what an employee with the same work tasks, training and experience would receive. The 36 months are calculated from the month when you registered your company with the Swedish Tax Agency.
Limited company or economic association
If you have a limited company or are a member of an economic association, you are regarded as an employee. The Social Insurance Agency then calculates the income for sickness benefits based on your salary. If you do not draw any salary, you cannot receive any compensation if you fall ill. For parental leave, you can only receive the minimum level compensation. Note that dividends from a limited company or from an economic association are not included in this income.
When you are employed in a limited company or an economic association, the company or association must pay you sick pay if you fall ill and cannot work. The same rules apply to you as to all other employees.
The first 14 calendar days that you are, partially or entirely, unable to work due to illness is called the sick pay period. Since the first day of illness is a waiting day, you cannot receive any sick pay for that day. If you are ill for more than seven days, you must have a medical certificate.
After 14 days, when the sick pay period is over, the Social Insurance Agency can disburse sickness benefits if you are still ill. The company or association must therefore make a report and submit a medical certificate to the Social Insurance Agency.
Sole trader, trading partnership or limited partnership
If you are a sole trader or have a trading partnership or a limited partnership, the income on which your sickness benefit is based will be calculated according to your share of the estimated surplus from the business. However, your income may not be calculated as being higher than the amount an employee with similar duties would receive as a salary.
No sickness benefits will be paid for the waiting days. If you are a sole trader or a partner in a trading partnership or limited partnership, you have a seven-day basic waiting period for health insurance. You may, however, choose another number of waiting days. Your national health insurance contribution will be lower if you choose a longer waiting period. You can choose between 1, 14, 30, 60 and 90 waiting days. If you do not select a waiting period, you will still have to complete the basic waiting period of seven days if you fall ill. If you choose a shorter waiting period, the change will take effect after a period of notice. The period of notice corresponds with the number of days with which the waiting period is reduced. The number of waiting days you select affects neither temporary parental benefit nor the standard parental benefit.
Contact the Social Insurance Agency if you would like to change the number of waiting days. After the age of 55, you cannot change back to a shorter waiting period.
If you are ill and cannot work in a sole trader business, a trading partnership or a limited partnership, you must report sick to the Social Insurance Agency on the first day of your illness. The Social Insurance Agency can then pay you sickness benefits after your waiting days. Generally, you cannot receive sickness payment for more than seven days before you submit your registration.
If you are ill for more than seven days, you must also submit a medical certificate to the Social Insurance Agency.
If you are entitled to rehabilitation compensation or preventive sickness benefit you can receive compensation from the first day of sickness or treatment, provided that you have not selected a waiting period and thus only have the basic waiting period of seven days.
If you have chosen another number of waiting days, you have to wait that number of days before you can receive rehabilitation compensation or preventive sickness benefit.
Make your company more digital
Increase your online visibility and create more and better business. With digital tools, you can also streamline your administration of the company.
There are many benefits to start managing your business digitally, and it is often both cheaper and easier. With today’s digital accounting software, you can get a comprehensive solution for both your accounting, billing and connections to your bank. You can also get automatic reminders if someone has not paid an invoice, or if you forget to send an invoice for a job done.
Get a digital mailbox to receive your mail from authorities digitally instead of on paper. Unlike regular emails, the digital mailbox is secure because login is via electronic ID, such as Mobile BankID. A digital mailbox is free, environmentally friendly and accessible wherever you are.
To be more visible online, you can have your own website or be active in social media.
When you become more digital and visible on the web, you also need to consider protecting your business. Read more under the section Protect your business.
After a few years, it may be time to further develop the enterprise. You may want to find new markets, get help to finance your growth or simply change the form of business enterprise.
There may be many reasons to continue with the business in a different form. One common reason is that you want to bring in partners to the business.
Reaching out to new markets
When you have a profitable and maximally utilised domestic market, it may be time to seek new markets. Assuming you are prepared to invest long term, exports could be profitable.
Does your business idea extend beyond the borders of Sweden? Then it is important that you find out what rules apply in Sweden as well as in the country in which you intend to conduct business.
The rules for international trade vary depending on what type of goods or service you trade in, if you trade with companies or individuals, and whether they are located in or outside the EU.
Trading goods within the EU
You can usually bring products to Sweden that are already manufactured or sold legally in Sweden. The same applies if you want to sell a product from Sweden to another EU country. The EU has a common market in which goods can circulate freely across borders without customs control or customs duties. For many goods, EU countries also have common product rules. Where the EU does not have common product rules, the basic rule of mutual recognition applies, meaning that a product lawfully placed on the market in an EU country must not be stopped by the authorities in other EU countries without good reason. There are areas belonging to an EU country but are not included in the EU’s tax area. Then you need to declare customs. If the EU area does not belong to the EU Customs Union or EU Tax Area, the rules for import and export of goods to non-EU countries apply.
Trading goods outside the EU
When you trade with countries outside the EU, you must declare the goods you are importing or exporting from the EU. You do not need a general license to start trading with non-EU countries, but you need a special registration number, an Eori number. You get this number from the Swedish Customs Office.
Some goods such as drugs, chemicals and organic products may require import licenses to be imported into the EU. The permit is available from the authority responsible over the product. Certain other goods, such as iron and steel and some agricultural and food products, require import licenses. In Sweden, the National Board of Trade Sweden and the Swedish Board of Agriculture issue these licenses.
Trading in services
When trading in services, you do not need to provide a customs declaration, whether you trade with countries inside or outside the EU. EEA countries have a common market for services. It is often enough that the service meets the requirements in Sweden for it to be sold in other EU/EEA countries. However, in some areas, national requirements apply and then you may need permission to perform the service. EU Free Trade Agreement and World Trade Organization’s GATS Agreement is an important regulatory framework for Swedish service providers who want to sell services outside the EU.
VAT in international trading
When you sell goods to a buyer in an EU country, the main rule is that you will charge VAT on the sale. However, if the buyer is a company that specifies its VAT registration number, you should sell the goods without adding VAT. The buyer will report the VAT in the other country. When selling a service to an entrepreneur in another EU country, you will, under certain conditions, sell the service without VAT. The buyer will report VAT in the other country. When you sell goods to non-EU countries, you will not charge VAT, regardless of whether the buyer is a company or an individual. When selling services to buyers from countries outside the EU, it is in most cases different rules depending on whether you sell to companies or individuals. If you sell to an entrepreneur, you must sell the service without Swedish VAT under certain conditions and if you sell to private individuals, you usually sell the service with Swedish VAT.
Bank loans are the most common type of external financing. This is mainly suitable when it concerns investments in tangible assets that can be sold on a second-hand market.
Venture capital is an investment that you or somebody else makes in your company with their own funds to be able to obtain a return on the investment in the future. Venture capital is suitable for particularly risky enterprises with good profit opportunities.
If you change your business activities – remember to change the industry codes (SNI codes). This is done at verksamt.se.
Venture capital also presupposes that the investor is actively involved in the business, such as through representation on the Board of Directors. The investment is usually limited in time.
Change business form
There may be many reasons you think about continuing with the company in another form. If you are thinking about changing business forms, it might be a good idea to talk to an accounting consultant to find out how it would affect your business and you as an owner. Also, be sure to complete the accounting process correctly.
At some time in the future, you will want to close down, sell or perhaps turn the enterprise over to your children. How you close your business depends on what form your business has.
Make sure you think through the tax implications the closing may cause. It is also important that you conclude your accounts in the right way. If you begin to plan the shutdown in time, you can take control over your shift in ownership. This is true regardless of what form of business enterprise you have.
Closing down your company
At www.skatteverket.se you will find information about what to consider when closing down your business. For example, you need to deregister as an employer and for VAT, as well as closing your accounts.
Selling the business
A shift of ownership is most successful if you have run the business in a manner attractive to an external buyer. It is important that the organisation does not rely entirely on you and that you are early aware of the problems that can arise. You must take into account legal, financial, business, organizational, psychosocial, emotional and tax aspects.
Generational ownership changes
A generation change in ownership entails special challenges both for the person leaving and the one entering. If you remain involved in the business in some capacity, it is important that you can constructively interact with your children in their new roles as owners and/or managers. Your behaviour affects their possibilities of succeeding in the business.
No one wants to end their business by going bankrupt, but if your business cannot pay its debts and will not be able to pay them for a long period of time, bankruptcy cannot be avoided.
During the bankruptcy process, the assets of the enterprise are sold and the proceeds are distributed to the creditors in accordance with a certain system, to the extent possible after payment of bankruptcy costs.
More help available here
A number of authorities and organisations arrange various courses which you may benefit from. “Starting up a business” days are arranged in Stockholm, Gothenburg and Malmö. The lectures are held in Swedish.
Entrepreneur organisations offer training, and sometimes municipal adult education centres or study associations may have what you are looking for.
Growing numbers of libraries offer special service to business operators. This service can include books, periodicals, access to various databases and individual guidance from the staff.
Information services and electronic services
is a website for those who run or are about to start a business where the
Swedish Companies Registration Office, the Swedish Tax Agency and the
Swedish Agency for Economic and Regional Growth have gathered information
and electronic services that are of use to business operators. Do you have
questions about starting and running a business? Are you having trouble to
find the answer to your question on verksamt.se? You are welcome to
call 0771-416 461. The Swedish Public
Employment Service helps you recruit employees. On the website you can
publish job vacancies, and search for candidates. You can chat with a
recruitment expert about your recruitment needs.
Advice and networks
It may also be useful to contact your bank or other advisors, such as accountants, auditors or lawyers. People in your surroundings who have experience of running a business or knowledge of the industry in which you intend to start business are other valuable contacts.