Limited Liability Company
A limited liability company in Sweden (also called an “AB”) is one of the most common types of Swedish companies, and an excelent way of establishing a permanent establishment in Sweden. This corporate form is ideal if you plan on conducting business activities in Sweden for a long period of time or if your company will perform work for the Swedish government.
Most larger Swedish enterprises are run in the form of either private or public limited companies, and the company form is therefore often regarded as more trustworthy by the average Swede. Having a Swedish registered AB can also simplify many interactions with the Swedish authorities since the company, unlike a branch or a representation office, will be regarded as a legal entity originating in Sweden. KagNag can help you set up a Swedish limited company and help you keep your enterprise fully compliant with Swedish laws, and administrate the company’s book keeping and payroll. By law a Swedish limited liability company must have a fixed share capital of at least SEK 50,000, which is always to remain in the company in the form of capital or assets. If more than 50% of the share capital in an AB is depleted the company’s shareholders will become directly responsible for its debts.
All Swedish limited companies must, in practice, have a company bank account or similar assets in place in the planned entity’s name before their incorporation so that the Swedish authorities can easily verify the existence and separation of the share capital. The Swedish banks’ customer knowledge and compliance requirements for non-domestic individuals and companies are relatively strict, and we, therefore, recommend our clients to establish a working relationship with the Swedish bank of their choice at an early stage of their planning process if they plan to incorporate a limited company here. Alternatively, a non-Swedish company may choose to initiate their Swedish enterprise as a company branch of their business outside Sweden, since company branches are not required to keep a separate share capital or have a bank account in Sweden.