Sweden: Investing

FDI in Figures

FDI flow to Sweden slowed down in 2009/2010, due to the global recession, then recovered in 2011 and this trend should continue. Despite the unfavorable international situation, the country maintains a high level of appeal to foreign investors because of its multilingual and qualified workforce, its very high per capita purchasing power, its economy at the forefront of new technologies and innovation and its advantageous tax regime. The country figures among the largest FDI receivers in the world. The government has undertaken to develop support for investments through expanding important sectors (biotechnologies and food processing), as well as on 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.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	33,704	10,322	5,328
FDI Stock (million USD)	272,146	331,974	348,667
Performance Index*, Ranking on 141 Economies	39	64	-
Potential Index**, Ranking on 141 Economies	10	-	-
Number of Greenfield Investments***	86	98	-
FDI Inwards (in % of GFCF****)	34.4	18.9	-
FDI Stock (in % of GDP)	55.8	75.0	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field 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. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2010, in %
The Netherlands	15.7
Luxembourg	13.5
UK	12.9
Finland	9.1
Belgium	7.7
Denmark	7.6
USA	6.3
Norway	6.2
Germany	6.1

Main Invested Sectors	2010, in %
Pharmaceutical & Chemical Industry	17.6
Engineering	10.0
Electricity, gas, heating, water	9.9
Food industry	8.1
Financial Services (except Banking)	7.9
Trade in goods	7.7

Source: Swedish Statistics Bureau - Last 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: Invest in Sweden Agency (ISA)

Why You Should Choose to Invest in Sweden

Strong Points: The political and economic situation is very favorable and the quality of the business environment is good. This environment favorably influences the way companies behave in making payments. The average probability of defaulting is very low.
According to the World Bank, Sweden is amongst the world's first 10 economies in terms of facility of business undertakings. The survey takes into account the following indicators: the formation of one's own company, hiring and dismissing employees, executing contracts, loan availability, registering one's capital and investor security.
The Swedish tax system is direct and corporate tax is amongst the lowest in Europe. The country applies contribution exemptions, authorizes total tax deductions on interest, and does not have strict capitalization rules.
The legal system is balanced and ensures sound, transparent and reliable hearings. Contracts are standardized and documents are often used for simple procedures, especially for mortgages.
The quality of management and consultancy services is very high, and commercial formalities and procedures are easy to undertake.
For further information, consult the ISA website.
Weak Points: The country's only weak point is the high cost of manpower.
Government Measures to Motivate or Restrict FDI: Since it joined the European Union, the Swedish government has established a number of reforms to improve the business legal environment. This has enabled it to attract foreign investors and increase competitiveness.
Sweden is ranked n° 1 by the OECD in terms of public spending, especially in promoting investment.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Sweden: To see the list of countries, click here.
To see the conventions, click here.
International Controversies Registered By UNCTAD: There have been no controversies registered by UNCTAD.
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	الولايات المتحدة	Germany
Index of Transaction Transparency*	8.0	6.0	7.0	5.0
Index of Manager’s Responsibility**	4.0	5.2	9.0	5.0
Index of Shareholders’ Power***	7.0	6.8	9.0	5.0
Index of Investor Protection****	6.3	6.0	8.3	5.0

Source: Doing Business - Last 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. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Yes.
It 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. Click here.
Obligation to Declare: The investment promotion agency in the country gives information about the authorizations necessary for setting up.
Competent Organization For the Declaration: The Swedish Company Registration Bureau (Bolagsverket)

Office Real Estate and Land Ownership

The Possibility of Buying Land and Industrial and Commercial Buildings: Possible.
Very simple and taxes are not high.
Risk of Expropriation: Expropriation is possible for public aims; it is not discriminatory, and there is reasonable compensation in conformity with the established principles of international law.

Investment Aid

Forms of Aid: Financing of investments, subsidies, loans, guarantees, few professional taxes, no with-holding tax on dividends, favorable regime for holding companies.
Privileged Domains: Sectors of construction, electricity and the wholesale foodstuff market.
Privileged Geographical Zones: Concerning regional incentives, subsidies are allocated according to the region where the company has set up. Sweden is divided into two zones (1 and 2). In zone 1, subsidies are capped at 35%, whereas in zone 2, they are capped at 20%.
Free Zones: The country is a zone with Customs duty exemption for holdings. For further information, click here.

Investment Opportunities

The Key Sectors of the National Economy: Automobile, shops, cleaning, natural resources, packaging.
High Potential Sectors: Automobile, shops, cleaning, natural resources, packaging, life sciences.
Privatization Programs: Banking sector, telecommunications.
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
Sectors in Decline: Real estate.

Finding Assistance For Further Information

Investment Aid Agency: Invest in Sweden Agency (ISA)
Almi Foretagspartner
NUTEK
Other Useful Resources
Doing Business Guides: The Lexmundi "Doing Business" guide to Sweden
The Deloitte "International Tax and Business Guide" to Sweden
Sweden Commercial Guide 2010 - Buy USA

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