Limited Company (AB)
Aktiebolag
Company formation in Sweden
The AB is best suited for: Tech startups leveraging Stockholm's deep venture capital and talent ecosystem, Companies targeting the Nordic and Scandinavian market from a trusted base, Founders who want a jurisdiction with world-class startup infrastructure, SaaS and digital businesses accessing the Nordic region, Companies where Scandinavian brand credibility and regulatory trust are commercially valuable. An AB pays corporate income tax (bolagsskatt) at a flat rate of 20.6% on taxable profits. Sweden applies a participation exemption on dividends and capital gains from qualifying shareholdings (business-related shares held for at least one year in companies where the holding represents at least 10% of voting rights). The exemption applies to both Swedish and foreign subsidiaries. VAT (moms) is charged at 25% standard rate, with reduced rates of 12% (food, hotel accommodation, restaurant services) and 6% (newspapers, books, public transport, cultural events). Losses can be carried forward indefinitely with no time limit. Sweden has no thin capitalisation rules but applies general interest deduction limitation rules aligned with the EU Anti-Tax Avoidance Directive (ATAD). Withholding tax on dividends to non-resident shareholders is 30%, reduced under double tax treaties (typically 5โ15% for substantial holdings).
- Tech startups leveraging Stockholm's deep venture capital and talent ecosystem
- Companies targeting the Nordic and Scandinavian market from a trusted base
- Founders who want a jurisdiction with world-class startup infrastructure
- SaaS and digital businesses accessing the Nordic region
- Companies where Scandinavian brand credibility and regulatory trust are commercially valuable
Key Facts
Step-by-Step Formation Process
Register the company with Bolagsverket
Submit the registration application to Bolagsverket (the Swedish Companies Registration Office). This can be done online via verksamt.se. You will need to provide the company name, registered office address, articles of association (bolagsordning), details of the board of directors, and the managing director (if applicable). The minimum share capital of SEK 25,000 must be paid in before registration.
Deposit share capital
Open a bank account or use a designated account to deposit the minimum SEK 25,000 share capital. A bank certificate or auditor's statement confirming the deposit is required as part of the registration filing. Since January 2020, the minimum capital was reduced from SEK 50,000 to SEK 25,000.
Receive the certificate of registration
Bolagsverket reviews the application and, if approved, issues a certificate of registration (registreringsbevis) with the company's organisation number (organisationsnummer). This number is used for all tax, banking, and government interactions.
Register for tax with Skatteverket
Apply to Skatteverket (the Swedish Tax Agency) for F-tax (corporate tax registration), VAT registration, and employer registration if you will have employees. This can be done online via verksamt.se simultaneously with company registration.
Open a corporate bank account
Open a business bank account with a Swedish bank (SEB, Handelsbanken, Nordea, Swedbank). The bank will require the registration certificate, articles of association, board members' identification, and information about beneficial owners. In-person identification of at least one signatory is typically required.
Required Documents
- Articles of association (bolagsordning)
- Registration application to Bolagsverket
- Bank certificate or auditor's statement confirming share capital deposit
- Passport or national ID for all board members and signatories
- Proof of registered office address in Sweden
- Details of beneficial owners for anti-money-laundering registration
Cost Overview
Tax Treatment
An AB pays corporate income tax (bolagsskatt) at a flat rate of 20.6% on taxable profits. Sweden applies a participation exemption on dividends and capital gains from qualifying shareholdings (business-related shares held for at least one year in companies where the holding represents at least 10% of voting rights). The exemption applies to both Swedish and foreign subsidiaries. VAT (moms) is charged at 25% standard rate, with reduced rates of 12% (food, hotel accommodation, restaurant services) and 6% (newspapers, books, public transport, cultural events). Losses can be carried forward indefinitely with no time limit. Sweden has no thin capitalisation rules but applies general interest deduction limitation rules aligned with the EU Anti-Tax Avoidance Directive (ATAD). Withholding tax on dividends to non-resident shareholders is 30%, reduced under double tax treaties (typically 5โ15% for substantial holdings).
Pros & Cons
- Sweden is one of Europe's top innovation economies โ Stockholm has produced more billion-dollar tech companies per capita than any city outside Silicon Valley
- Corporate tax rate of 20.6% is below the EU average and competitive for a high-income economy
- Fully online registration through verksamt.se โ one of Europe's most efficient digital government systems
- Low minimum share capital of SEK 25,000 (approximately โฌ2,200) makes formation accessible
- Extensive double tax treaty network with 94 treaties
- Strong rule of law, low corruption, and transparent regulatory environment
- Deep venture capital ecosystem with experienced Nordic investors
- English is widely spoken in the business world โ virtually all professional interactions can be conducted in English
- Employer social contributions are approximately 31.42% on top of gross salary โ among the highest in Europe
- Progressive personal income tax with marginal rates up to 57% makes Sweden expensive for high earners
- VAT at 25% is among the highest in the EU
- Cost of living and office space in Stockholm are high by European standards
- Annual financial statements must be filed with Bolagsverket and are publicly available
- Statutory audit is required for companies exceeding two of three thresholds: 3 employees, SEK 3 million in assets, or SEK 3 million in revenue
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.