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Doing Business in Sweden

Forms of Business Organisation

The joint stock company (aktiebolag – AB) is the organisational form recommended by local banks and government authorities. A new law on Sweden’s joint stock companies took effect on January 1st 2006. Among the key points are the following: restriction on public information about small shareholders; regulations for using new telecommunications techniques and the Internet to facilitate voting and participation in shareholders’ meetings; fewer restrictions on loans from companies to shareholders; greater scope for subscribers to new share issues to sue companies for damages caused by incorrect or incomplete information in prospectuses; and consolidated regulations for dividend payment and sale of shares.

The requirements of a joint stock company (AB):


An AB must have a capital base of at least Skr100,000, and publicly listed ABs must have at least
Skr500,000. Subscribed capital must be fully paid up, and a bank must attest to this fact. If capital is in the form of property, machines, know-how, licences or goodwill, it must be appropriate to the company’s activities, and capital other than cash must be valued by a certified public accountant. There is a legal-reserve requirement of 10% of after-tax profits to be set aside until reserves equal 20% of capital. The legal reserve may be reduced, subject to approval at a general meeting, to cover losses that exceed the company’s free reserves or to increase the share capital through a share dividend.

Founders & Shareholders

Minimum of one founder, who must be a resident of the European Economic Area (EEA – the EU member states plus Iceland, Norway and Liechtenstein), although the National Board of Trade can grant exemptions;
foreign shareholders may acquire founders’ shares up to 100%.

Board of Directors

For companies capitalised at Skr1m or more, the board of directors must comprise at least three
persons. Smaller companies may have one director as long as a deputy director is appointed. One-half of the board of directors must be residents of the EEA, as must the chairman, the managing director and the deputy managing director.


Foreign managing directors and their deputies must have the approval of the National Board of Trade,
and they must reside in Sweden. Employees normally appoint two board members in companies with 25 or more employees, in accordance with Sweden’s co-determination law.

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