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Business Environment

Sweden offers a number of regional investment incentives, and an overall favorable financial and business climate.

 

Source: Swedish Agency for Economic and Regional Growth

Investment incentives

REGIONAL DEVELOPMENT AREAS

There are regional development areas A and B, granting investors different levels of financial investment incentives or regional employment grants.

Investments in a regional development area in Sweden can be approved for regional investment grants up to 35% of the investment value, depending on the size of investment, the area where the investment is done and the size of the company investing. Alternatively, companies starting up new operations in a regional development area may seek a regional employment grant to finance recruitment of new staff

Operating guides: Regional Incentives.

Legal and taxes

CORPORATE INCOME TAX

The national corporate income tax is a nominal 22% on the taxable net income. The effective tax rate may be substantially lower due to: accelerated tax depreciation, tax allocation reserves, loss carry forward.

Operating guides: Corporate Tax.

IMPORT DUTIES

There are no import duties on e.g. servers to Sweden from countries outside the European Union.

INCOME TAX RELIEF

Sweden offers a special income tax relief to encourage highly skilled people, such as international executives, experts, researchers and others with special skills, to work in Sweden.

Operating guides: Tax relief for foreign employees

PERSONAL PROPERTY TAX

There is no personal property tax for companies in Sweden.

REAL ESTATE TAX

The owner of property or site leasehold used for a datacenter is liable for real estate tax at a rate of 0.5 – 1% on the tax assessment value. The real estate tax is a national tax and there are no regional or local differences.

REGIONAL OR LOCAL TAXES

All taxes related to a company’s activities are handled on a national level. There are no regional or local taxes for companies in Sweden. Regional differences of national tax levels exist for the electricity tax.

SALES TAX

There is no sales tax in Sweden.

TAX ASSESSMENT VALUE

The tax assessment value is supposed to correspond to 75% of the fair market value of the property, and is set by the Tax Agency. The tax assessment value is the basis for the calculation of the property tax.

TAX TREATIES

Sweden has an extensive network of some 84 unilateral tax treaties which is essential to avoid double taxation for international businesses.

THIN CAP RULES

Sweden is unique through its absence of a thin-cap regime. A Swedish company may be almost fully funded with debt, whereby taxable income can be offset against interest payments to a group financing company.

ESTABLISHMENT GUIDES

The Establishment guides offer information to international companies on how to set up and run a business in Sweden. The guides are tailor-made for the more established international company wishing to invest in Sweden. Read more here.