Sweden: Investing

FDI in Figures

According to UNCTAD's World Investment Report 2022, FDI inflows to Sweden increased 43.4% in 2021, reaching USD 27 billion, up from USD 18.8 billion one year earlier. In the same year, Sweden was in 14th place among the world's most attractive countries for investments. The stock of FDI stood at USD 386.5 billion in 2021, around 61.6% of the country’s GDP. Sweden is also a big investor, with an outward FDI stock of USD 447.5 billion (71.3% of GDP). In terms of FDI stocks, the UK, Luxembourg, the Netherlands, Germany, the U.S., and Norway are the main investing countries in Sweden. The largest foreign assets are held in the financial and insurance activities sector, manufacture of petroleum, chemical products, rubber and plastic products. In 2021, the largest increase was recorded in the information and communication sector (data Statistics Sweden). According to the latest figures from OECD, in the first semester of 2022, FDI inflows to Sweden reached USD 22.6 billion, up by more than 40% compared to the same period one year earlier.

Despite the unfavourable international situation, the country maintains a high level of appeal to foreign investors, because of its multilingual and qualified workforce, very high per capita purchasing power, an economy at the forefront of new technologies and innovation, as well as its advantageous tax regime. The Swedish government has undertaken measures to develop support for investment, focusing on key sectors (biotechnologies and food processing), as well as rapidly growing markets (Baltic countries, India, Brazil, etc.). There are gaps in the food-processing field, as well as in the housing and interior design sectors. The government assigned the Inspectorate of Strategic Products (ISP) and the Swedish Defence Research Agency (FOI) the monitoring of FDI in sensitive areas. Sweden is one of the few EU Member States that did not yet introduce FDI screening rules. However, proposed legislation was presented, which is expected to enter into force in 2023. As evidence of the quality of the Swedish business climate, the country ranks high on most international investment lists, including the Economist Business Environment ranking (7th out of 82 countries), the AT Kearney 2022 Foreign Direct Investment Confidence Index (13th worldwide), and the Global Innovation Index 2022 (3rd worldwide, the country has been in the top 3 for over a decade).

Foreign Direct Investment	2020	2021	2022
FDI Inward Flow (million USD)	21,514	21,133	45,963
FDI Stock (million USD)	395,715	387,483	353,791
Number of Greenfield Investments*	93	95	125
Value of Greenfield Investments (million USD)	2,332	2,858	2,616

Source: UNCTAD, Latest data available.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

FDI STOCKS BY COUNTRY AND INDUSTRY

Main Investing Countries	2019, in %
Netherlands	15.2
United Kingdom	14.1
Luxembourg	13.4
Germany	8.9
Norway	8.5
Finland	7.9
Denmark	7.4
USA	6.7

Main Invested Sectors	2019, in %
Manufacturing	38.1
Financial and insurance activities	17.2
Wholesale and retail trade	11.5
Energy and recycling	6.7
Real estate	5.9
Legal, professional, scientific and technical activities	4.9
Information and communication	3.4

Source: Statistics Sweden, Latest data available.

Form of Company Preferred By Foreign Investors: The limited liability company is the simplest and most preferred structure, especially for foreign companies (SMEs wishing to set up in Sweden).
Form of Establishment Preferred By Foreign Investors: A subsidiary or a representative office.
Main Foreign Companies: Over 11,000 foreign companies from the EU, U.S., South Africa, Malta, Saudi Arabia, India and Bahrain are set in Sweden.
Sources of Statistics: Statistics Sweden
Business Sweden

What to consider if you invest in Sweden

Strong Points

Advantages for FDI in Sweden:

The political and economic situation is very favourable and creates a good quality business environment.
According to the World Bank, Sweden is the 10th country in terms of ease of doing business (Doing Business 2020).
Corporates taxes are among the lowest in Europe: The country applies participation exemption, authorises a total tax deduction for interest and has no strict capitalisation rules.
The economy is open, diversified (specialised in high-potential sectors such as high-tech products and sustainable economy) and extremely competitive.
Demographics are becoming increasingly dynamic and are fuelling a highly qualified workforce adapted to export trades.
The judicial system is balanced and allows for safe, transparent and reliable decisions.
The quality of management and advisory services is very high, and the business procedures are simple to undertake.
The potential of the domestic market is often underestimated, as Swedish consumers have one of the highest levels of purchasing power in Europe and a growing propensity to consume.

For more information, visit the Business Sweden website.

Weak Points

Disadvantages for FDI include:

High labour costs
Rigid labour legislation giving priority to worker protection
High household debt (201% of net disposable income)
Tensions in the housing market

Government Measures to Motivate or Restrict FDI

Since entering the European Union, the Swedish government has put in place a number of reforms to improve the legal business environment. This allowed the country to attract foreign investors and increase its competitiveness.
There are a number of incentives available to both Swedish and foreign owned companies, including:

Financial incentives (such as loans and grants).
Favourable tax regimes (such as tax relief for foreign experts and key personnel).

The Swedish government offers certain incentives to set up a business in targeted depressed areas. A range of regional support programs, including location and employment grants, low rent industrial parks, and economic free zones are available.

Sweden does not have a national security screening mechanism for inbound foreign investment. However, the government is considering how to implement the EU Commission’s investment screening framework.

Business Sweden is the investment promotion agency tasked with facilitating business.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Sweden: Sweden has signed over 70 bilateral agreements. To see the list of conventions and countries, click here.
International Controversies Registered By UNCTAD: The ISDS Navigator contains information about known international arbitration cases initiated by investors against States pursuant to international investment agreements. Sweden is involved in 10 cases as Home State of claimant.
Organizations Offering Their Assistance in Case of Disagreement: ICCWBO , International Court of Arbitration, International Chamber of Commerce
ICSID , International Center for Settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency: Sweden is a signatory to the MIGA Convention.

Country Comparison For the Protection of Investors	Sweden	OECD	United States	Germany
Index of Transaction Transparency*	8.0	6.5	7.0	5.0
Index of Manager’s Responsibility**	4.0	5.3	9.0	5.0
Index of Shareholders’ Power***	7.0	7.3	9.0	5.0

Source: The World Bank - Doing Business, Latest data available.

Procedures Relative to Foreign Investment

Freedom of Establishment

In general, Sweden imposes no restrictions on foreign investments or foreign shareholders. However, in certain sectors, conditions aimed at limiting foreign ownership can be imposed as a requirement for obtaining the necessary permits. Confirmation usually takes two to three weeks once the Swedish Company Registration Bureau has received the written application.

Acquisition of Holdings

Taking a majority holding in the capital of a Swedish company is allowed. For more information on mergers and acquisitions please visit Bolagsverket.

Obligation to Declare

The Swedish Act (1992:160) on Foreign Branches applies to foreign companies operating through a branch and also to people residing abroad who run a business in Sweden.

The investment promotion agency in the country gives information about the authorisations necessary for establishing a business.

Competent Organisation For the Declaration

The Swedish Companies Registration Office (Bolagsverket)

Requests For Specific Authorisations

Sweden does maintain some limitations in a select number of situations:

Accountancy: Investment in the accountancy sector by non-EU-residents cannot exceed 25 percent.
Legal services: Investment in a corporation or partnership carrying out the activities of an “advokat,” or lawyer, cannot be done by non-EU residents.
Air transport: Foreign enterprises may be restricted from access to international air routes unless bilateral intergovernmental agreements provide otherwise.
Air transport: Cabotage is reserved to national airlines.
Maritime transport: Cabotage is reserved to vessels flying the national flag.
Defense: Restrictions apply to foreign ownership of companies involved in the defense industry and other sensitive areas.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Temporary office solutions: Regus
The Possibility of Buying Land and Industrial and Commercial Buildings: There are generally no restrictions on overseas companies entering into acquisition agreements or lease agreements.
Risk of Expropriation: Expropriation is possible for public aims. It is not discriminatory. There is reasonable compensation in conformity with established principles of international law.

Investment Aid

Forms of Aid

There are a number of incentives available to both Swedish and foreign owned companies, including:

Financial incentives (such as loans and grants).
Favourable tax regimes (such as tax relief for foreign experts and key personnel).

Privileged Domains

The Swedish government offers certain incentives to set up a business in targeted depressed areas develop innovation and R&D.

Privileged Geographical Zones

Sweden has foreign trade zones with bonded warehouses in the ports of Stockholm, Gothenburg, Malmö, and Jönköping. Goods may be stored indefinitely in these zones without customs clearance, but they may not be consumed or sold on a retail basis. Permission may be granted to use these goods as materials for industrial operations within a free trade zone.

Free-trade zones

Sweden has foreign trade zones with bonded warehouses in the ports of Stockholm, Goteborg, Malmo, and Jonkoping.

Public aid and funding organisations

Ministry of Finance

Investment Opportunities

The Key Sectors of the National Economy: Automotive, businesses, cleaning, natural resources (including the mining industry), packaging, mechanical industry, ICT.
High Potential Sectors: Automotive, retail, cleaning, real estate, natural resources, packaging, information and communication technologies, life sciences, transport, renewable energies (wind, biofuels and geothermal), eco-construction.
Privatization Programmes: Privatisation policies are debated in Sweden. Some measures concerning the privatisation of education and health divide opinion. The government has a mandate to divest or liquidate its holdings in various companies in the vehicle inspection, automotive and export credit sectors.
Tenders, Projects and Public Procurement: Tenders Info, Tenders in Sweden
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Post, delivery

Finding Assistance For Further Information

Investment Aid Agency: Business Sweden Agency: The Swedish Trade and Invest Council
Almi Foretagspartner
Other Useful Resources: Invest in Stockholm
How to start and run a business in Sweden - Invest in Skane
Doing Business Guides: KPMG country report on Sweden
How to invest in Sweden - The Balance
Deloitte Tax Guide - Sweden
Doing Business in Sweden - UHY

Any Comment About This Content? Report It to Us.