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International Company Relocation Opportunities: Sweden
Known as a good country for investments, Sweden has a very competitive, free of corruption economy, with innovations, new skills, technologies, and products. Because of such factors, as well as the powerful telecommunications network, stable environment in politics, and educated labor community, Sweden is preferred by foreign companies, including American ones, for settling in Northern Europe.
Having a population of just 10 million, the country relies on exports, encourages free trade, and opens the way to the Baltic Sear and Northern Europe. Sweden is especially good for business due to its regime for holding companies, no dividend withholding taxes and low corporate taxation. The counterbalance to this is the high VAT and personal taxes.
In the past few years, investors which conducted surveys into the country, have come up with the following conclusions:
- Great infrastructure,
- Sub-average corporate taxation,
- Educated and well trained workforce,
- Decent capital access.
On the other hand, we name the following disadvantages:
- Rigid legislation regarding labor,
- Overall high costs,
- Long time for processing,
- High tax rates for the individual,
- High labor costs.
These factors are mentioned in reports, such as the late 2016’s Best Business Countries by Forbes Magazine, which raked it first while checking factors like taxes, innovation, investor protection, freedom, corruption, red tape, technology, and property rights. According to Forbes, a big contributor to the country’s ranking was the last 2 decade’s restraint on budget and deregulation.
Out of the 144 participating countries, Sweden came 6th in the Competitiveness Report of 2015-2016 of the World Economic Forum. Productivity and competitiveness was compared, Sweden placing among the first 10 for over a decade. It moved 3 steps up compared to last year, due to its developments in the macroeconomic area.
Though flexibility in the labor market can still be improved upon, it still works well. The 2nd most troublesome factor to conducting business is considered the labor regulations which can be restrictive. The country’s housing market is also quite difficult.
One the other hand, Sweden came out as the 4th least corrupt country in Transparency International’s 2016 report. Global competition being driven by technology shows great potential to improve its economy. Sweden’s economy is already very well integrated into the international environment. Investors have always been attracted to its public transportation, energy, telecommunications, healthcare, and information technology sectors.
The country is constantly setting trends and using new technologies as its own. Exporters from the United States may benefit from a test market with demanding clients with technical sophistication of a high level.
Foreign Investments: Restrictions and Openness
In Sweden, direct investments used to follow many regulations and laws, making them quite restrictive. This was the case until the 1980s. In 1995, the country entered the EU, which led to its investment climate improving significantly and many people choosing to invest in it.
From the 1990s, foreign subsidiaries grew in number from 3000 to more than 10000 in just 10 years. However, Swedish assets abroad outweigh foreign assets within the country, despite inflows of FDI.
The government wishes to improve the economic climate for education, entrepreneurs, and technology. To attract foreign investors and obtain a superior company regulatory environment, several reforms have been implemented by authorities.
Foreign investments are facilitated by Business Sweden, a promotion agency for investments. It gives access to networks and contacts at every level and is under the ownership of the Swedish industry and the Government. It’s also responsible for giving support and strategic advice.
Sweden doesn’t differentiate between maintaining communication with investors and retaining investments. It considers both to be just as important.
Establishment and Private Ownership Rights, as well as Foreign Control Limits
Although such laws are not in writing, the system does protect Swedish companies and individuals. Markets are accessible in equal measure to both public and private enterprises, so they may conduct their operations. However, there are some exceptions to this rule, in certain circumstances:
- Legal services,
- Air transport: National airlines reserve the right to cabotage,
- Air transport: If bilateral agreements between governments are not present, foreign enterprises cannot use certain international routes,
- Maritime transport: Only ships with a national flag have the right to cabotage.
Company regulations in Sweden permit companies to organize themselves in various ways. They differ based on whether or not capital must be owned by the founder and based on the level of liability he has in case the company goes into debt.
The Foreign Branches Swedish Act is applicable to companies from abroad doing business within Sweden using a branch, as well as to individuals living abroad who have operations in Sweden. The branch’s president must live within the EEA.
All enterprises, branches included, operating in Sweden must register their activity at Bolagsverket, the Registration Office for Companies in the country. To get legal protection for your trademark or invention, you must register it as well. For a bank to start a Swedish branch, if it comes from a country outside the EEA, it must first obtain approval from the Authority in charge of Financial Supervision. Foreign inbound investments do not benefit from a Swedish approval and investment screening mechanism.
Tasked to facilitate business is the Swedish Investment and Trade Council, Business Sweden, an agency meant to promote investments. Its services can be used by everyone.
With the exception of sole traders, all other enterprise forms must be registered at Bolagsverket, so they may begin operations. To obtain exclusive name rights in their respective counties, sole traders must register as well.
You can register your enterprise online even if you are a foreign company. The process is usually complete and clear. You are given updated relevant information regarding the permits you need and the processing time. To register a company takes between a couple days and some weeks, according to its form and complexity.
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Sole traders and all other enterprises must also register themselves with Skatteverket, the Tax Agency of Sweden, so they may begin operations. You may find guides and information on their website.
Registering with Naturvardsverket, the Agency designated with the protection of the environment may also be necessary depending on what business you plan on conducting. If your enterprise involves real estate, you’ll need to contact county authorities as well.
For a non EEA / EU citizen to run or even start a company, he needs to contacts Migrationsverket, the Board of Migration of Sweden to obtain a residence permit. Relevant services and guides for registering, running, starting, closing, and/or expanding a company are found at http://www.verksamt.se.
Enterprises are classified as such:
- Micro enterprises have 10 employees or less,
- Small enterprises have 50 employees or less,
- Medium enterprises have 250 employees or less.
Sweden’s Government asked the EKN to internationalize Swedish enterprises and promote exports. It helps expand operations and reduce risk by insuring banks and companies in case of non-payment.
In 2015, the Government initiated Team Sweden, for its export strategy, to promote investments and exports. Team Sweden’s responsibility is to make entering the export market simple and clear for native enterprises. It’s made out of a giant network meant for public initiatives that wish to support internationalization and exports. Business Sweden also gives advice on exports and internationalization.
Domestic investors are encouraged to invest abroad by the Government. Restrictions and exceptions are made only when national defense and security is involved. The ISP takes care of the compliance and control of dual use items and defense equipment exports. It’s also in charge of targeted sanctions cases.
Taxation Treaties and Investment Bilateral Agreements
Countries with agreements to protect investments signed with Sweden are as follows: Algeria, Armenia, Albania, Argentina, Chile, Bulgaria, Belarus, Chile, Czech Republic, China, Cote d’lvoire, Ecuador, Croatia, Estonia, Georgia, Egypt, Guatemala, India, Hong Kong, Iran, Hungary, Kuwait, Kazakhstan, Latvia, Laos, Kyrgyzstan, Lebanon, Macedonia, Lithuania, Malaysia, Madagascar, Mauritius, Malta, Morocco, Mexico, Mozambique, Mongolia, Nigeria, Nicaragua, Philippines, Oman, Peru, Panama, Pakistan, Poland, Romania, Korea, Russia, Senegal, Saudi Arabia, Slovakia, Serbia, Sri Lanka, South Africa, Turkey, Thailand, Tanzania, Tunisia, United Arab Emirates, Ukraine, Uzbekistan, Uruguay, Zimbabwe, Vietnam, Venezuela, and Yemen. It doesn’t have such an agreement with the U.S.
Treaties for bilateral taxation: In 1994, the U.S. and Sweden signed a treaty for bilateral taxation. In 2005, it was amended.
The law system’s transparency: Being a member of the EU, Sweden changed its regulations, so they match the European Union’s competition rules. Its laws were changed extensively, so they match EU standards, while trying to avoid impediments or distortions to the allocation and mobilization of investments.
The EU’s institutions make public their desire for regulatory processes that are transparent. The EU Commission is the only one that can take initiative regarding EU laws, publishing descriptive and extensive information about its actions.
Associations from the private sector and nongovernmental organizations manage some regulatory processes. However, these are informal. They may also comment on draft bills from the government. These comments appear in the process of consulting the public.
The regulatory authority and rule making at the national level is present at the Riksdag, the legislative branch, though only formally. Being a EU member, a large part of Sweden’s regulations and legislation come from the European Union.
Such laws are applied directly or go through the Riksdag before being accepted as law. Sweden’s Government and several other agencies are responsible for making regulations and laws to be presented to the Riksdag, before being accepted by the nation. If it’s within their competence sphere, municipalities may also create regulations. These apply only to the municipality in which they were drafter, so from one to another, they may vary.
Similar to the United States’ federal comment and notice procedures, Swedish regulations and draft bills, including laws on investments, can be viewed by the public with the help of a consultation process. Newly adopted and current legislation may be viewed on the homepage of the Parliament, as well as on websites of various agencies to which such information applies.
Lagrummet is where important actions pertaining laws get published. It’s the official website for legislation in Sweden, offering information on currently used statutes, impeding legislation, and laws relevant to the public domain.
Enforcing and overseeing regulations is the job of several agencies as well as of the judicial branch. Data driven and/or scientific assessments are used to review regulations. Thanks to Sweden’s principle of making official documents public, studies’ results made by entities of the government are available, and the public is free to comment on the government’s actions. As mentioned in the Act for the Press’ Freedom, the public is entitled to reading public documents.
Considerations regarding international regulations: When creating its national legislation, Sweden makes sure it respects EU regulations. If a standard, norm, or law does not conform to the European Union’s regulations, it is modified, so it complies. Due to the trade policy common to all EU countries, Sweden respects the WTO’s practices and coordinates itself with other countries from the EU for this purpose.
Independence of the Judicial Sector and the Legal System
Awards received abroad are recognized by Sweden regardless of the country in which these awards were given. The arbitration law is respected through the Arbitration act of Sweden, with both substantive and procedural regulations.
Participating at the Brussels and Lugano Conventions, as well as a member of the EU, the country follows Brussels Regulation regarding enforcement and recognition in commercial and civil matters, including jurisdiction.
Swedish courts may not review an arbitral award, as it is deemed final. This being said, such awards can be challenged due to one of the motives mentioned in the Arbitration Act. For example, if procedural errors occurred which likely affected the outcome, the award may be revoked.
Courts in Sweden are classified as such:
- General jurisdiction courts (the Supreme Court, Appeal courts, and courts of each district). Such courts have jurisdiction over criminal and civil cases;
- Administration courts. Their jurisdiction include taxes and public law;
- Specialist courts used for issues regarding market laws, environmental regulations, and laws concerning labor.
Swedish agencies and the legislation offers guidance on whether enforcement and regulation actions should be adjudicated and appealable in the court system of the nation.
Direct Foreign Investments: Regulations and Laws
Sweden deregulated its markets in the 1990s. It targeted telecommunications, electricity, and other key areas, leading the way to lower costs and better sectors.
However, there are still several problems facing direct investments. Among these, we number a non-discriminatory extensive system of authorizations and permits required for engaging in certain enterprises, as well as the overwhelming power of some players in particular sectors, like wholesale food and construction.
Laws on financial services ownership by foreigners is now liberal. Foreign mortgage institutions, brokerage firms, insurance companies and banks are allowed to create Swedish branches with the same rights as domestic companies, given they receive a permit. If an enterprise is placed on the NASDAQ OMX, anybody, citizen or otherwise, may purchase shares in it.
Tax levels for corporations are low in Sweden, and it has a simple taxation structure. Starting with 2013, the country has been lowering its tax on corporations by 4.3%. The rate may be lowered further if you make a deductible appropriation annually to a reserve for allocating taxes. This can be done for a maximum of 25% of your profit prior to taxes.
Companies may allocate funds to reserves which aren’t taxed, so they’ll pay taxes only when using them. Untaxed reserves, up to a certain extent, can be utilized for covering losses.
Thanks to exemptions from taxes on dividends and gains of capital, including several other tax rules like low tax rates on corporate matters, no interest withholding tax, no share capital duties and stamp duty, no deductible costs on interests, and a tax network double treaty, Sweden ranks among the EU’s best holding company jurisdictions. Exempt from taxes are unlisted shares, so capital and votes have no minimum holding, and qualification time is non-existent. If the company holds on to its shares for more than a year and its holding contains at least 10% of votes, the shares which are listed become exempt.
Personal taxes on income rank as some of the highest on the globe. Thanks to the improvement in public finances thanks to consolidation packages meant to cut deficits, Sweden managed to reduce the pressure of taxes as a GDP percentage. At the moment, it dropped below 50%. Reducing taxes has been a point of focus, so employers are encouraged to give jobs to those unemployed for a long time.
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One more reform on taxes meant to encourage the migration of experts and professionals into Sweden was a reduction in the income tax of important foreign employees. According to this reform, you may tax 75% maximum of an employees’ income during the initial 3 years of their stay in Sweden. Also, employers’ payment for the contribution to social security is reduced to 75% of the original.
This reduction in tax is applicable to all benefits and salaries, including stock options and any other forms of compensation given by an employer. It applies to executives, experts working in Sweden temporarily, researchers, and other key personnel. However, it does not apply to those assigned to work in the country by a company from abroad with no Swedish operations.
Citizens of the United States who’re living in Sweden and paying an income tax should know instances where Skatteverket, the tax authority in Sweden, has failed to contact United States citizens when tax overpayment occurred. Recently, 2 people used untrue claims towards 14 foreigners, United States citizens included, to receive their overpayments from Skatteverket. This lead to the enforcement authority of Sweden defrauding Skatteverket. The institution refused to take responsibility and claimed the 14 individuals must recover their funds from the defendants.
Taxes do not apply to dividends from foreign subsidiaries to their company. For those sent to other shareholders from abroad, a 30% tax must be paid according to domestic regulations. However, an exception can be made if the dividends are taxed lower.
Using the European Union’s Subsidiary Parent Directive, liability to taxes can be nullified as well. If a foreign company’s Swedish branch wishes to send its profits abroad, it can do so by paying the normal income tax for corporations.
Before moving to Sweden, there are no rules for taxing stock options, nor is there any exit taxation. On the other hand, double tax situations can be solved using tax treaties. Such situations include moves from all countries, the U.S. included.
On the 1st of July 2014, the country signed FATCA with the United States. Because of this, Swedish financial institutions must send information to the Tax Agency of Sweden, according to FATCA regulations. In the beginning of 2015, the Parliament created new regulations and laws required for introducing FATCA. This decision led to the adoption of the 15:41/2014 Bill, including the following examples:
- A new law was adopted regarding reportable accounts related to FATCA;
- The Act for tax procedures was modified;
- The information exchange legislation was updated;
- The Act on Income Tax, as well as several other laws were amended.
On the 1st of April 2015, these changes were enforced.
Anti-Trust Regulations and Competition
Being a member of the EU, the country has changed its regulations, so they’re in tune with the union’s competition rules. Sweden made many significant changes to regulations and laws for this purpose, to prevent impediments and distortions to the allocation and mobilization of investments. The Competition Act of Sweden contains the rules of the competition law, applicable since 2008.
However, the antitrust legislation hasn’t changed since 1993. The Competition Act of Sweden is enforced by the SCA.
Expropriation: Private property may only be expropriated if it serves a public purpose, if the compensation is fair, there is no discrimination involved, and it’s done while respecting international regulations.
The New York and the ICSID conventions: As an ICSID member, Sweden uses ICSD arbitration for disputes regarding investments in quite a few BITs.
Settling disputes between the state and investors: Recently, no large disputes regarding an investment have occurred in Sweden. Property interests are enforced and recognized, and bankruptcy and commercial laws are consistently written and enforced. Foreign investors have not been subject to extrajudicial actions as far as we can tell.
International foreign courts and commercial arbitration: Arbitration laws in Sweden are advanced, using up to date international arbitration practices. The SCC’s Arbitration Institute administers arbitrations using the Arbitration Rules of the UNCITRAL, taking the role of an appointing authority in most cases.
The administrative tasks of the SCC are:
- Appointing arbitrators;
- Administering and deciding arbitration costs;
- Ruling over any challenges to an arbitrator’s appointment;
- Before/after the issuing of a dispute, parties can agree to the Procedures;
- The SCC has several versions of these Procedures. Their application depends on the Arbitration Rules of the UNCITRAL.
Regulations on Bankruptcy
Sweden’s bankruptcy regulations come in the form of several laws serving various purposes and enforced at different times. Concerning insolvency, the most important laws are the Act for Reorganizing Companies and the Bankruptcy Act. However, just as important are the Companies, Salary Guarantee, and Creditors’ Preferential Rights Acts.
Starting with 2010, the country improved its system for secured transactions by modifying the Priority Rights Act which give priority to creditors’ claims in situations of debtor default. Doing Business data indicated two years are necessary to fix insolvency, and it takes 9% of one’s estate to do it. Most likely, it will end with the sale of the company.
On average, the recovery rate for each dollar is 78 cents. In the 2017 Doing Business Report, Sweden placed globally on spot 22 out of 189 countries when comparing their ability to fix insolvency.
Incentives for investment: Sweden gives several incentives to those trying to establish a company in depressed areas of the country. You can get favorable loans from the Regional Growth and Economic Agency, as well as from the development funds of each region. Many support programs are available, including employment and location grants, free zones, and industrial parks with low rent. Support for the development of regions in need concentrates on the northern part of Sweden, which is less populated.
Only EU registered companies and nationals have access to subsidy programs and EU grants, normally based on national treatment.
Trade facilitation, free ports, and trade zones: Foreign zones reserved to trade which contain bonded warehouses are the Jonkoping, Malmo, Goteborg, and Stockholm ports.
Requirements of Data Localization and Performance
Being a member of the European Union, Sweden follows its General Directive for Data Protection, which contains regulations regarding personal data. Companies are required by law to inform clients when they’re gathering their data, as well as their intentions with said data, and who will have access to it.
Subjects to data collection must have the chance to object to this process, and to refuse their use for marketing reasons. Opting out of this process must be allowed when the data is collected and at any time afterwards. Although EU institutions consider introducing the GDPR, the old Directive from 1995 is still being used.
Currently, the European Union’s General Directive for Data Protection allows personal data to flow freely within the Union, and it also insures its protection in cases where it leaves its borders. To transfer personal data to a country not belonging to the EU, said country must have a legislation with sufficient data protection in place, or the subject of the data must give his/her clear consent. Countries with the appropriate framework to protect transferred data are decided upon by the European Commission, and the U.S. is not included.
Still, the European Union and the United States are developing a Privacy Shield Network. This is a mechanism used for data transfers meant to replace the old Safe Harbor Framework. When it is approved, transferring data from the European Union to the U.S. will be possible.
The DPA is trying to stop privacy encroachment using information and giving codes and directives of statutes. The institution is also responsible for responding to complaints and making inspections. It examines government bills to make sure new ordinances and laws safeguard personal data adequately.
Companies are not prevented by any measurements from censing business or client related data to another country. There are no performance standards imposed on foreign investors.
Property Rights Protection
Real property: Real estate is well protected under Swedish law. If a property is not occupied for a period of time, it will not be given to others.
Rights on intellectual property: Law in Sweden give sufficient protection for property rights. This includes real and intellectual property. Being a member state of the EU, Sweden conforms to several multilateral conventions on commercial, intellectual, and industrial property.
You can obtain protection in all technology areas for around 20 years.
Copyrights: Sweden signed numerous conventions to protect copyrights. Among these, we number 1961’s Rome Convention, 1971’s Berne Convention, and the TRIPS agreement. The copyright law in Sweden safeguards databases and programs. Recently, the country became notorious as a safe zone for internet piracy, thanks to the slow implementation of the European Union’s directives, fast internet speed, and poor efforts to enforce the law.
However, in 2009, the IPRED was implemented in Sweden, and the country keeps improving its anti-piracy policy. The operators of pirate bay dot org were convicted, and the legal sharing of files increased. After the perpetrators were found guilty in the 2010 trial, Sweden stopped being considered a safe zone for illegal internet activities.
Regulations along with more resources to enforce them and the appearance of good alternatives played a part in the powerful increase in film and music distribution legally starting with 2010. Also, IPR cases can now be solved in a specialized court, so the system is even more efficient. The Market and Patent Court began working on the 1st of September 2016.
In Sweden, trademarks are protected thanks to the trademark act of 1960. The country has also signed the Madrid Protocol in 1989.
The country’s copyright and patent laws protect proprietary information unless it is taken by an authority or ministry of the government. If this happens, your information may be given to the public.
Sweden has participated at the Unregistered and Registered Designs Regulation Council, at the Locarno Agreement, and at the Paris Convention. Copyright protection may last for multiple years, the maximum being 25.
USTR’s 301 report does not have Sweden in it. The Movshare Group, a website engaging in stream ripping, is believed to collaborate with certain countries, including Sweden.
The Financial Area
Portfolio investments and capital markets: Credit is given according to terms dictated by the market, and can be obtained by foreign investors with no discrimination involved. Many credit instruments are available to public. Accounting, regulatory, and legal systems are consistent, as well as transparent, in accordance with international standards. NASDAW-OMX plays the role of an active, open, and modern forum for foreign and domestic portfolio investments. It’s a stock exchange working under good legislation.
Banking and money: The 1990’s banking crisis reshaped the country’s banking system. Many savings banks turned into commercial ones. Citibank and many other foreign banks built branch offices, and a few niche enterprises began competing in the bank retail market.
In 1996, an insurance system for deposits was introduced. Through it, people could get up to $250000 SEK for protection against a bank’s insolvency. In 2008, the guarantee went up to 500000 SEK or 76000 USD as a response to the worldwide financial crisis. It was changed to contain every kind of account, whether funds in said account were available for withdrawal or not. In 2010, after the EC directive’s amendments, the compensation went up once more to around 100000 Euros.
Finansinspektionen, the Authority in charge of Financial Supervision monitors banks’ actions closely, so they meet every standard necessary. The financial statements of Sweden’s banks follow international regulations and get audited only by auditors that are recognized on an international level.
The Association of Swedish Bankers, which collaborates with legislators and regulators in Sweden as well as in Europe, represents Swedish financial entities and banks, promotes public education regarding the financial industry, and creates joint policies concerning bank institutions’ common interest, including security issues and payment systems.
Despite being outside the Eurozone, Sweden’s retail banks offer payment services and euro-denominated bank accounts.
The U.S and Swedish government entered into an agreement on the 8th of August 2014 to develop Compliance to the International Tax and to invoke FATCA , which was later signed into law. Riksbank’s primary function is of the Swedish National Bank Infrastructure.
Sweden’s Finansinpektionen (FI) is the country’s Authority on Financial Supervision. Financial institutions such as multinational banks or their branches that provide financial services are compelled to obtain prior authorization before establishing operations.
The permit application process involves FI conducting a review of the company’s management and owners, business strategies, and capital situation, and possibly its daily operations as well. No correspondent banking partnerships have been reported as lost or compromised within the last three years.
Sweden permits foreign nationals to open bank accounts so long as they are able to provide sufficient identification and submit to an identification check performed by the bank. This check cannot compel the individual to present a Swedish address or private identity number.
Remittances and Foreign Exchange
FOREX: The Swedish government does not restrict payments of license fees, royalty, or profits originating from remittances and investment liquidation. A parent business operating outside Sweden can receive fees transferred by its branch or subsidiary for research expenses, management services, etc. All types of investments and capital are convertible into any global currency.
Generally, it is possible to transfer profits coming from interest receipts, dividends, or investment funds freely. Foreign-owned businesses are permitted to increase loans from foreign currency both from credit institutions overseas and from their parent corporations.
On a national level, Sweden has a fluctuating currency rate and follows a floating exchange rate system.
Remittance guidelines: Remittances are not subjected to time restrictions, and any modifications or attempts to alter current investment remittance regulations do not exist.
Sovereign wealth capital: Sweden does not have Sovereign Wealth Funds.
The Swedish government is the country’s biggest employer and business owner. Government Offices manage forty-nine companies, for which forty-one are completely owned by the state and eight businesses are partially government-owned. They employ roughly 163,000 individuals, including associate entities. Sectors that feature SOEs include forestry, finance, power/energy generation, mining, postal services, telecommunications, liquor sales, and gambling.
State-owned companies are subject to the same regulations as private entities, but the state designates board members which mirror government ownership. SOEs have a designated board of directors similar to private corporations. The constitution restricts the state from being directly involved in the entity’s operations.
SOEs are permitted to release yearly reports subject to autonomous review. With respect to credit, market access, and other corporate operations, public companies can compete with private ones subject to the same terms and conditions. The Swedish state is a constituent of the GPA (General Procurement Agreement) which operates within the WTO system.
State-owned Entities in Sweden comply with the regulations set forth by the OECD on Business Governance for SOEs.
Initiative on Privatization
Sweden’s Alliance Government, moderate and centre-right led by the previous coalition government, came into power on September of 2006. Its aim was selling state assets worth approximately 31 billion USD for the next three years (2007-2010), in order to promote economic growth, increase government revenue and inevitably reduce the country’s debt. Sweden sold the liquor entity Vin and Sprit AB (V&S) for 8.3 million USD to the French corporation Pernod Richard, as well as Sweden’s OMX Stock Exchange for 318 million USD to NASDAQ.
The former state-run and government-owned pharmaceutical business Apoteket was divided into public and private parts, as subsequent deregulation advancement was enforced at the start of 2010. Private Corporations have purchased roughly six hundred pharmacies.
During the same year, testing centres for vehicle emissions were split into 3 categories, for which two later became autonomous subsidiaries. This occurred after the formerly monopolized automotive emissions testing industry became accessible to authorized private entities.
In March of 2011, a single parliamentary vote from the Socialist Democratic party had reversed this trend in privatization, which delayed the projected sale of Sweden’s postal office Posten, the telecom company TeliaSonera, SBAB’s bank stakes, and the power utility company Vattenfall.
The imminence of privatization proves challenging to predict as it seems to serve a political function, as indicated by consolidated opposition.
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However, Sweden dismantled its remaining stakes in Vectura Consulting and Nordea Bank in 2013, as well as its auxiliary Forsakringsaktiebolaget Bostadsgaranti and AB Bostadsgaranti in 2014. These dispossessions are part of a continuous redundancy of the entire Bostadsgaranti Company, and its remaining business processes were set to be discontinued by 2016.
In September 2014, Sweden’s centre-left parliamentary was elected into office and acquired legal powers to liquidate or dismantle stakes in Sweden’s motor-vehicle auditing company, Bilprovningen, Lernia, SEK (SAS & Svensk Exportkredit. Bostadsgaranti, previously named Saab Auto Parts Orio.
The incumbent government expresses no indication of any plans to execute such legal authority. However in 2016, it nevertheless allowed Vattenfall to terminate its lignite operations in Germany in favour of the Czech company EPH and its investment collaborator PPF Investments. The purchase was conducted to adapt Vattenfall’s portfolio in order to finalize the shift toward a carbon-neutral system.
Currently, Sweden does not show any plans to utilize this mandate, but should the Swedish government want to terminate or discontinue the aforementioned resources, the privatization project will be accessible to international investors, and the state will possibly initiate a bidding process.
Competency in corporate administration: Swedish consumers and producers are intensely aware of sensible and competent business management. Business entities are obliged to adhere to local rules and regulations, as well as respect international laws and standards concerning human rights, anti-corruption, sustainable progress, and labour protection.
Companies that actively practice a responsible business conduct are often lauded and perceived as agreeable. They frequently advertise their compliance to basic RBC policies as they are stipulated in OECD protocols for Foreign Businesses. For instance, Volvo Trucks and USAID have collaborated in documenting RBC work outside Sweden.
Corruption practices are rarely encountered by businesses in the country. Although local corruption cases were reported, most corporations have set preventive measures to ensure investors will not be involved in bribery to perform their business.
There were reported cases of bribery from Swedish corporations which are doing business overseas. On a positive note, these circumstances happen rarely. The Swedish government has been enforcing comprehensive policies versus corruption and approved the OECD Anti-Bribery Seminar in 1997.
However in June 2012, the Anti-Bribery Group gave opposing reviews of Sweden’s participation in that conference. The working group called the attention of the Swedish government, since it did not release confirmed cases of bribery for 8 years, for not updating legal policies, and since it had low penalties for offenses.
Swedish public officials opposed the feedback and claimed those reviews did not have supporting evidences, that they had missed opportunities, and insisted on having high regard in terms of business practices in Sweden. A controversial case which involved the Telia Company (a major telecom corporation) in Uzbekistan, got everyone’s attention. It caused senior and top management officials to lose their employment.
Telia was on the verge of losing its business in Uzbekistan after an investigation conducted by the Department of Justice relating to illegal business practices. In 2016, Dutch and US authorities agreed to make Telia pay around 1 billion USD as penalty for the offense committed. The penalty was a piece of a settlement arranged by these authorities.
The Swedish government did not form an independent office mandated to monitor corruption practices. Instead, Sweden has a few government agencies working together to spot these illegal business practices.
A detailed list of their policies is available online.
Sweden approved and joined the Convention of UN’s Anti-Corruption. It became a member of the OECD Conference on Fighting Bribery of Foreign Government Officers in the International Business Setting.
Security and political environment: Politics are stable and there have been no reported changes in Sweden.
Labor Practices and Policies
Sweden has around 5 million educated, highly skilled, and disciplined people in advanced technology jobs. Almost 70% of the workforce has unions, but the percentage has been declining in recent times.
Labor unions have greatly contributed in the Sweden business setting to maintain competitiveness. They favored employees’ learning advancement in terms of technical and educational aspects. Sweden has formed a Mediation Office that is solely responsible in handling labor issues. The Office said no reports of industrial conflicts occurred in 2016.
Sweden’s Work Act provides representation over top management officials when a company exceeds 25 workers. This policy gives the union the opportunity to bargain with management if there are major developments in the company. It obliges the business to provide information regarding its current status to the government sector. Management and labor unions agree this policy is beneficial to both parties.
Investment costs in the country are relatively the same compared to OECD member countries. There are just a few advantages in terms of costs, depending on the country.
Generally, the compensation rate has become competitive because of the economic growth which resulted in increased wages in the last few years. This success also benefited researchers and highly skilled workers.
The Swedish government did not set a fixed rate for salaries. They are negotiated by certain sectors.
Low wages have become rampant in the last few years because of the flexibility shown upon negotiation with the company’s officials. Unskilled workers in Sweden are well compensated while high skilled workers are not paid the same compared to countries having the same technical skills.
In terms of wage increases, Sweden has shown a high average of improvement in the last years according to records because of its economic stability. The percentage of increase has been higher compared to other countries, around 3% on a yearly basis.
Companies are required to pay 31% on social security contributions. The fee is required by law related to health care insurance, social benefits, and pensions.
Sweden has adapted principles from the International Labor Organization regarding association freedom, collective bargaining, the rights of workers, and working conditions, as well as health and safety by participating in their conferences.
OPIC and insurance investment projects: There is no existing office of OPIC in the country.