If you are looking for new work, want to try a new project with no big commitments, or you have employment but seek to earn some money on the side, there are some alternatives to setting up your own business. Of course, you want to still be able to invoice for your services, charge the statutory taxes, and pay taxes on your income. So for those looking to work freelance as e.g. consultants (e.g. to your former employer abroad), advisors, DJs, programmers, writers, designers, artists, media creators, bloggers, vloggers, journalists, personal trainers, business coaches, freelance teachers, translators, interpreters, etc. you have the alternative path of working through an umbrella company, called Egenanställning in Swedish.

How it works

Umbrella companies are a means of having your own company without having to have your own company, it’s basically “Company as a Service”. For a fee, of course. This is the way it works: you create an account with an umbrella company, then you create projects in your account, and create an address book of your clients. For the duration of any project (i.e. the time you are invoicing your client for) you become a temporary project employee of that umbrella company.

When you then write invoices to your clients, you can specify the terms and currency you expect payment in (for clients abroad), and you can put your logo on your invoice. The umbrella company then handles the administration and accounting in the background:

Invoices and value-added taxes are checked by the umbrella company, invoices emailed out to your clients, the umbrella receives your client’s payment, they deduct statutory appropriate taxes (corporate, income, and employer part!), they pay your state pension contributions, and they deduct their fee for these activities. Then they pay you the remainder as your project income to your bank account. They also keep an accounting book for your activities, and they report all of this to the tax administration (Skatteverket) as required. The fee they charge for this service is typically a percentage of every invoice you issue.

What are advantages and disadvantages?

The advantages of umbrella services are that you are not faced with the immediate paperwork and red tape requirements that you are faced with when starting your own company. You can also start faster, you do not need a tax consultant, it can thus be more accessible to newcomers from abroad, and it is less of a commitment in general.

As for disadvantages, you pay a percentage of your fees for the umbrella’s services (although bear in mind that accounting software and tax consultants also cost money), you lack the ability to write off certain investments you make to enable your activities. E.g. your mobile phone or the laptop you have/buy for doing your fashion design work must be set-off against your income tax (every year in May, if they exceed SEK 5,000). Of course, you can charge your customers for any direct project-related costs such as prints, travels, etc. Here you can find an overview of advantages/disadvantages and a financial example.

Certainly, if your business is taking off well or becomes stable, we would encourage you to start your own business, since it offers the benefits of the slightly higher income, the ability to set-off your investments against company incomes, you have the social security advantage of being a full-time employee, you have the immediate relationship with your clients for invoice handling, and lastly, banks you may ask for a credit to buy a flat/house consider steady incomes from employment (even if you own the firm) better than project-based employment etc. But as a start, Egenanställning can work quite well, too.

Which umbrella services can I use?

Several of these services exist in Sweden, and company as a service can even be considered a booming sector. Their services vary by the the features they offer to their clients, i.e. you as a freelancer. Some firms have English user interfaces, some have lower service fees than others, some offer special insurance packages, some work only for certain industries, some allow different currencies, some offer legal advice, etc. Contracts with these umbrella firms are typically on a per-project base, so you do not enter any long-term commitments. We cannot give you a recommendation for THE service to use and we certainly do not suggest to only look at your bottom line. For your orientation we created a brief overview below covering some umbrella services, but there are several more.

Bolagskraft
Website: https://bolagskraft.se/en/
English: Yes
Offers additional advice: finance, legal, insurance, consulting

Convoy
Website: https://www.convoy.se/
English: No

Cool Company
Website: https://coolcompany.com/se/en/
English: Yes
All round service provider

F-bolaget
Website: http://www.f-bolaget.se/
English: No

Frilans Finans
Website: https://www.frilansfinans.se/en/
English: No
Offers hotline in Arabic, discounts for Sats, SJ trains, offers extra insurances

Frilansjobbarna
Website: http://www.frilansjobbarna.se/
English: No

JBG Gruppen
Website: http://www.jbggruppen.se/
English: No

Kinta Ekonomi
Website: http://www.kintaekonomi.se/
English: No

NBC
Website: https://nbc.nu/egenanstallning/
English: No

Payout
Website: https://payout.se/
English: No

 

This information was compiled by volunteer members of SDCN to help expat partners kick-start their life in Stockholm. We welcome your comments at info@sdcn.se.

Last updated 2019/06/11