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In this page: FDI in Figures | What to consider if you invest in Sweden | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information

 

FDI in Figures

According to UNCTAD's World Investment Report 2021, FDI inflows increased 158% in 2020, reaching USD 26 billion, up from USD 10 billion in 2019, despite the economic crisis triggered by the Covid-19 pandemic that caused a contraction of 42% to global foreign direct investments. This increase is partly the result of U.S. MNEs injecting loans into their affiliates in the country. The stock of FDI was about USD 409 billion in 2020. Sweden is the tenth-largest recipient of FDI but also the eleventh-largest investor worldwide. FDI outflows from the country reached USD 31 billion in 2020, compared to USD 16 billion in 2019. In terms of FDI stocks, the Netherlands, the UK, Luxembourg, Germany and Norway are the largest investors in Sweden. The manufacturing sector maintained its status as the backbone of foreign investment, followed by financial and insurance activities, wholesale and retail trade and the energy sector. According to the latest figures from OECD, in the first semester of 2021 FDI inflows to Sweden reached USD 17.5 billion, down by 22.1% 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) with 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, in November 2021, proposed legislation was presented, which is expected to be approved over the course of 2022. As evidence of the quality of the Swedish business climate, the country ranks high on most international investment lists, including World Bank's latest Doing Business report (10th out of 190, two spots higher on the year), the AT Kearney 2021 Foreign Direct Investment Confidence Index (14th worldwide) and the Global Innovation Index 2021 (2nd worldwide, the country has been in the top 3 for over a decade).

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 9,10818,80326,973
FDI Stock (million USD) 347,405414,519386,569
Number of Greenfield Investments* 859294
Value of Greenfield Investments (million USD) 1,8372,1742,814

Source: UNCTAD, Latest available data.

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 available data.

 
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

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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.

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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: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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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.

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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.

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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
 
 

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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

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Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
Post, delivery

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Latest Update: November 2022