Starting a business in Sweden

2. Get your network going

One of the keys to success is to make your network work for you, regardless of what country you’re in. Besides friends, colleagues and relatives you might have in Sweden, how and where do you find people with ideas similar to yours?

You could contact your local branch of the Swedish Jobs and Society Foundation (Nyföretagarcentrum, link in Swedish). They provide advice to new businesses and holds regular events around the country. The half-state-owned organisation Business Sweden can help you connect with other companies.

3. Check if you need a permit to start a business in Sweden

Certain types of business in Sweden require a permit to operate. Verksamt.se has a handy list of the various trades, professions and businesses that require permits, as well as contact details for the bodies that issue them.

4. Register your business for tax

As a sole trader, your business will be identified by your personal identity number (personnummer) which is allocated to you by the Swedish Tax Agency (Skatteverket).

The key step in starting as a sole trader is registering for F-skatt – ‘F tax’ (the ‘F’ stands for företagare – entrepreneur). F-skatt basically means that you undertake work as an entrepreneur and not as an employee. You are responsible for administering your tax or social security payments – not those contracting you.

The Tax Agency offers a starting point on its F-tax approval web page. It includes information on how to apply. The Tax Agency also offers free webinars in both Swedish and English giving step-by-step help about how to start up a business.

Please note that Sweden has different rules and regulations about residence requirements for those moving to Sweden to start a company, depending on their citizenship. Verksamt.se has more.

5. Protect your business name by registering it

This is not an obligatory step, but still a wise move. It will ensure that no-one else is allowed to operate under the same business name in your country.

To register your business name, visit the Swedish Companies Registration Office website (Bolagsverket). They will process your registration for a fee.

6. Make your business plan

When you have decided on what goods or services you want to sell and looked into whether there’s a market for your business, it’s time to start getting your dream down on paper. A good business plan is essential in getting others to listen, whether they are banks, investors or potential customers.

Your business plan doesn’t have to be long and complex. It is simply a statement of what you plan to do and how you plan to do it.

As with a CV, the format of a business plan can vary from country to country. In certain countries, the idea is everything, whereas in others a sound financial footing is the key. Verksamt.se offers an excellent guide to what Swedish bankers, investors and authorities look for in a business plan.

7. Hire staff, and do it legally

Fast-forward a little and you might find yourself in the happy position of being able to offer work to others. Then it’s good to know the basic tenets of Swedish employment law.

Employment conditions in Sweden are regulated by the Employment Protection Act (Lagen om Anställningsskydd, or LAS, link in Swedish). This act states that employment contracts are for an indefinite term unless otherwise explicitly stated in the employment contract. The law also contains a description of different types of fixed-term employment contracts.

Swedish employment law has wide-ranging provisions for parental leave, holiday and pension entitlements. It’s a good idea to familiarise yourself with the legislation before making the decision to hire. You can also choose to sub-contract to other sole traders who have registered for F-tax.

Translations of the relevant labour laws and acts can be found on the Swedish government’s website.

8. Get your bookkeeping right

Unless you’re setting up an accountancy business, get an accountant. The whole point of setting up your own business is to get the most out of your talents. If you don’t have a head for figures and tax and regulations, it’s worth paying someone else to do it.

There are plenty of qualified firms out there that specialise in helping small firms like yours. An easy way to find a good, trustworthy accountant is to ask other entrepreneurs in the same field who they use.

You can also contact the Association of Swedish Accounting Consultants and they can help you find a suitable firm in your area. An accounting consultant can also teach you how to write invoices properly according to Swedish regulations and laws.

Remember that hiring an accountant doesn’t absolve you from the responsibility of understanding basic bookkeeping. So if you haven’t already done so, take some time to learn the basics.

9. Finance your venture

Stating the obvious – make a plan for how to pay your regular household bills as you get your venture off the ground. Assignments may not pour in from the beginning. Maybe you’ll use your savings to finance your first few months? Or you might build up your business slowly alongside a full- or part-time job.

Of course you can also apply for a business loan, but the bank will require you to put up some sort of security, as most businesses are not profitable in the beginning.

An alternative for financing is Almi Företagspartner (Almi), a state-owned company that helps businesses with capital and advice. Though their interest rates are often higher than the banks, they usually require less security. You can read more about what they provide here.

10. Create routines for your business

On a more general note – organise yourself. Most entrepreneurs will be eager to work very hard on the sales side to begin with, but make sure you find time over for administration too. This tip applies to any budding entrepreneur, regardless of where you are in the world.

Make sure to review your progress on a monthly basis and talk to your financial advisors about what taxes or other charges you need to pay. This will help you compare your progress to your business plan and allow you to make adjustments. Also, it will keep you on the right side of the authorities.