Doing Business in Sweden
Doing Business in Sweden
Tips when Doing Business in Sweden
First of all, Sweden has an excellent relationship with the United States - its single largest foreign investor. In fact, American investments include two of Sweden’s best known international brands, Volvo and SAAB. Secondly, Sweden is home to an unusually large number of multinational corporations, relative to the size of its economy. Its private equity market represents more than 1% of its gross domestic product (GDP), making it the second largest private equity market in Europe. And finally, Sweden is uniquely open to the world hosting one of the largest foreign business communities on the planet - relative to its economy.
Global investors choose Sweden for several reasons. Geographically, it is the gateway to three distinct markets: Scandinavia, the Baltic Sea Region, and the European Union (27 countries, 550 million consumers). For American companies, Sweden is an unexploited opportunity with wealthy consumers and great sales potential. It is also an integral part of the EU marketplace, and by far the largest market in Scandinavia.
In Sweden, investors can launch operations in a world-class science park, or enter the market through joint ventures, strategic alliances or acquisitions. Sweden also offers cost advantages and an attractive corporate tax climate including:
- Competitive corporate tax rates
- Capital gains exemptions on sales of subsidiaries
- Tax-exempt intra-group dividends
- Full tax relief on interest
- Tax relief for key foreign personnel
- Absense of thin capitalization rules
- Comprehensive tax treaties that avoid double taxation (with most countries)
- Lower wages for certain skilled personnel
At a flat 28 percent, Sweden’s corporate tax rate is significantly lower than many other European and OECD countries. In addition, tax deferments can reduce Sweden’s effective corporate tax rate to about 25 percent. Sweden also scores well on business costs. With a transparent market and simple procedures, the Swedish business climate is uncomplicated. There are no restrictions on foreign ownership of companies, and starting a company is a swift and efficient process. Sixty percent of the region’s large multinational companies choose Sweden for their headquarters. And, foreign investors have discovered Sweden’s many business and investment opportunities including access to new products, technologies, skills and innovations.
Over the past decade, Sweden has been one of the top European markets for foreign investment. And Sweden is ranked first in innovation capability. This is because Sweden is endowed with a generous supply of technologies, technically skilled personnel and natural resourses. Swedish-based operations are highly-productive and efficient, and offer value for money! As a result, Sweden is uniquely equipped to meet investor demands for the future.
Sources:
World Investment Report 2005, Unctad
European American Business 2008, Roxby Media Ltd
www.cia.gov?cia?publications/factbook
There are few countries that can match Sweden’s potential to benefit from intensifying, technologically-driven global competition. Sweden already hosts one of the most internationally integrated economies in the world. The country’s competitiveness is manifested in large trade flows and foreign investment. Sweden’s adaptable workforce is key to its ablity to constantly restructure its economy to meet the demands of gloablization. The country’s developed welfare institutions and positive relations between employers and labor unions provide the foundation for the social cohesion that makes this change possible. Sweden also has a long tradition of supporting education. Schools and universities meet high international standards. This is one reason why in Seden there is widespread and ingenious use of information technology.
The country also ranks high on investment in research & development (R&D). At 3.9%, it places 8th place in a world. Due to consistent, long-term investments in R&D, higher education and Information and Communications Technology (ICT), Sweden is recognized as one of the world’s most knowledge-based economies. In fact, Sweden invests more in R&D as a proportion of GDP, than other OECD country, and foreign investors are offered attractive prospects for R&D.
Source: World Investment Report 2005, Unctad
Sweden offers triple-market access: Scandinavia, the Baltic Sea/Northern Europe and the European Union. It is an ideal spot for high value-added operations in goods or services and for establishing competency centers to serve the whole region. Sweden is the main attraction when investing in the Baltic Sea region/Northern Europe. It’s location, proximity to customers, widespread use of advanced technologies, qualified workforce and strong trading tradition, are important factors.
Sweden is often seen as a frontrunner in adopting new technologies and setting consumer trends. In Sweden, products and services can be test marketed to demanding customers with high levels of technical sophistication. Nowhere else is average market take off so rapid. The country ranks third in test marketing new technologies - after Iceland and Japan. With its detailed systems knowledge, Sweden is a leader in the convergence and integration of telecom technologies and services. A strong telecom culture, with 1,200 ICT firms and a number of ICT-intensive multinationals, make Sweden a one-stop-shop for foreign ICT investors.
Sweden’s biotechnology industry offers a wide range of investment opportunities, including in-licensing, collaboration and direct investment. With more than 40,000 employees and over 800 companies, Sweden’s life science industry is one of Europe’s finest. The country is home to the Karolinska Institutet and two of Europe’s most distinguished biotech cluster - the Stockholm Uppsala Bioregion and Medicon Valley in Malmö/Lund/Copenhagen.
With its advanced infrastructure, progressive mindset and ambitious capacity expansion plans, Sweden offers major investment opportunities in combined heat and power plants that use different types of biofuels and waste combustion. There are also exciting opportunities in cellulose-based biofuels and scores of innovative cleantech companies. Swedish firms are well known in United States as a source of innovation in alternative fuel technologies.
Swedish businesses are among the most prolific in the world in the development of cooperative U.S. and Swedish R&D projects including: bio-energy (e.g. biogas, biodiesel, ethanol), waste and wood for energy generation; solar power for cooling/heating and electricity generation including wind power, alternative lighting and energy conservation and building technologies. Minister for Sustainable Development, Mona Sahlin, declared that Sweden will become the first country in the world to break its dependence on fossil energy. Sweden plans to stop using oil completely by 2020 totally replacing it with renewable energy. The goal is to gradually rid the country of gasoline powered cars and oil heated homes. This sector offers many opportunities for successful collaboration between American and Swedish companies and researchers.
Sweden has the fourth best logistics industry in the world, according to a report by the World Bank on logistics performance and competitiveness. And, Sweden is home to a large number of international export companies that depend on highly efficient logistics. Thanks to its strategical location, extensive road and rail networks, big airports and busy harbors, the Öresund region is Scandinavia’s most important transport and logistics centre. A market of 20 million people is reachable within a single day – without the use of express transport. Today, the Öresund region is the biggest freight handling center in Scandinavia. Several international companies have located their Scandinavian central warehouses in the region, while others are in the process of doing so.
Sources:
Unctad 2007
ISA, report 2008/2009
http://www.treehugger.com
http://www.easyfairs.com
Living and Working in Sweden
Living and working in Sweden means being a part of a transparent society within a dynamic international environment. Legendary Swedish openness to new ways of thinking is a source of inspiration and a driver of innovation. Few other nations can match Sweden’s healthy balance between basic security and action-orientation. Quality of life is highly valued as evidenced by superior education, healthcare, housing and cultural institutions, and the abundance of opportunities for personal fulfillment.
Sweden’s scientific infrastructure is world-class. High investment in higher education has resulted in high levels of of university enrollment, workforce skills and R&D. This emphasis on education and training – including widespread proficiency in English – plus cultural factors, such as openness to new products, services and behavioral patterns, has led to a high level of connectivity in Swedish society.
Source: European American Business 2008, Roxby Media Ltd
Tips when Doing Business in Sweden
• Egalitarianism is the most dominant social value in Sweden. Consensus and compromise are ingrained into business and social life. This is manifested in a noticeable lack of of hierarchy when compared with most western countries. • Handshakes are swift and firm. If you are wearing gloves, remove them before shaking hands. • Swedes like to establish relationships on an informal level. Address a person by his/her first name. At the same time, private and business lives are very much segregated, so this informality does not equal intimacy. • Swedes tend to maintain more distance or personal space when interacting than in many other countries. • Swedish communication style is direct and open. This can seem abrupt but it is not meant to be. When conversing, be sure to listen intently to anyone speaking and not to interrupt. Each person takes his turn at offering opinions. • Punctuality is important in business and for social engagements. If you are late, it is crucial to phone and let your host know. • Do not show emotions during negotiations. Always remain cool, calm, collected and controlled when doing business. The Swedes value consensus as the best way to make decisions. Thus, it is a mistake to channel all your energy into endearing yourself to top-level executives. In many cases, middle managers make the decisions, and even they may defer to their subordinates. • Wear formal clothes when doing business in Sweden. Avoid wearing anything flashy. Senior executives do not dress any more elaborately than average employees. Source: © Kwintessential Ltd
Do not backslap or embrace. Avoid speaking with your hands in your pockets as this is considered bad etiquette.
