Starting Your Own Business in SwedenMay 2, 2019
Deregulations and various market reforms in the Swedish economy undertaken by the government in the 1990s, helped encourage entrepreneurship and incentivized small collectives as well as individuals to start their own companies. Over time, these endeavours gradually spawned a flourishing culture of start-ups in Sweden which has now grown to an enviable list of successful companies such as Spotify, iZettle, Truecaller, Tictail, Northvolt, Klarna, Lifesum, only to name a few.
The socio-economic policies of the welfare state have been instrumental in creating and sustaining an ecosystem of entrepreneurship and innovation in Sweden. For instance, if an employee wants to start their own organization, the employer is mandated by law to grant the employee a leave period of six months. Even if the start-up does not bear fruit, the employee can always rejoin the employer after the leave period is over. Moreover, the social security net created by the government – education is free in Sweden, bank loans with low interest rates are easily available, healthcare is free, childcare is heavily subsidized – also makes it relatively easier for people to take risks and have a go at establishing their own businesses.
All these measures along with an absence of corruption, lesser bureaucratic bottlenecks, equal representation of all genders, non-hierarchical organizational structures, information-sharing and collaboration between companies have resulted in Sweden ranking right at the top of the Innovation Union Scoreboard index (published by the European Commission).
Support offered: Governmental, private and academic
The Swedish government undertakes a lot of endeavours either directly or in collaboration with other organizations to support and fund business initiatives. These are a few resources every entrepreneur should be aware of:
- Verksamt: This is where you should start your research. This is a government website (a collaborative effort of four agencies – the Swedish Companies Registration Office, the Swedish Tax Agency, the Swedish Agency for Economic and Regional Growth and the Swedish Public Employment Agency) which provides a lot of useful information about your rights and responsibilities as an entrepreneur in Sweden, and how to go about the requisite procedures in order to start your own business. There is a host of tips and advice as well, along with a ready list of investors who fund or guide start-ups.
- Almi: Almi Företagspartner AB is owned by the Swedish government and is the parent company of a group consisting of 16 regional subsidiaries and the Almi Invest AB subgroup. It has offices in every part of Sweden. Almi offers loans to companies with growth potential and helps in their business development. This applies to start-up businesses as well as established companies. Almi often provides the first initial loan which does not need to be repaid if it is used properly for the right purpose.
- Vinnova: Vinnova is Sweden’s government agency for innovation. This organisation contributes to sustainable growth by long and short-term funding of innovative projects and research efforts needed to develop new solutions. They also facilitate collaborations between companies, universities and other higher education institutions, public services and civil society. Each year, Vinnova invests around SEK 3 billion to encourage innovation.
- Tillväxtverket: This is the website of the Swedish Agency for Economic and Regional Growth, which is a government agency under the Ministry of Enterprise and Innovation. It promotes economic growth in Sweden by increasing the competitiveness of companies. They also work to strengthen the competitiveness by facilitating entrepreneurship and creating attractive environments for companies in the regions.
- Industrifonden: This is an independent venture capital investor which invests in technology, innovation and research that has the potential to create a meaningful change.
- Venture Cup: This is a competition where entrepreneurs submit innovative ideas, which if selected will win them a prize of SEK 500,000 apart from access to a dynamic network, and publicizing opportunities. Since 1998, this competition has funded about 15000 start-ups.
- There is a wide network of angel investors in Sweden as well, such as Connect, Coach&Capital, Framtidslyftet, SeedfundIt, Partner Invest Norr, Roslagens Affärsänglar, Spiltan, Stockholms Affärsänglar etc. Angel investors are very approachable in Sweden and can be contacted via mail or social networks. It is advisable to do some background research on an angel investor before getting in touch with them to find out their background and the specific domain they usually invest in.
- There is also a network of organizations who usually do not invest huge capitals, but they provide budding entrepreneurs with useful advice, opportunities to network, important contacts and some grants. There are a few such organizations: Nyforetagrcentrumsyd, SVCA, Teknikdalen, Swedish Incubators and Science Parks, SeedfundIt, Business Region Göteborg, Minc Malmö, Ideon Innovation, Arctic Business Incubator, Invest in Skåne, Foo Cafe, Startup People of Sweden etc.
- Apart from the organizations mentioned above, funding opportunities can also be found at local municipalities and industry-specific trade unions.
To strengthen Sweden’s competitiveness and encourage innovation, the Knowledge Foundation funds research and competence development at Sweden’s university colleges and new universities. If you are so inclined, there are various courses on entrepreneurship on offer at several universities in Sweden. Before taking the plunge into starting your own business, you can enroll at any of these courses and study entrepreneurship, strategy and innovation to get to know the business landscape of your choice a little better.
Universities often provide participants in these courses with initial funding opportunities for nascent business ideas or put students in touch with a broad network base of experts/investors.
How to go about it
Starting up a company in Sweden is relatively bereft of bureaucratic hassles, compared to most other countries. You should start out by ascertaining the nature of your enterprise. The different options to choose from are: a) a limited liability company (aktielbolag), b) a sole trader (Enskild Näringsidkare), c) a trading partnership (Handelsbolag), d) limited partnership (Kommanditbolag) or e) a branch (filia) of a foreign-based company.
To start up a company in Sweden you need to follow these steps:
- You need to obtain a written statement from the bank declaring that the initial amount for the shares has been paid into an account (for a limited liability company).
- Next, you have to submit an application to the Swedish Companies Registration office (Bolagsverket). It usually takes around two weeks to obtain a registration certificate. There is a fee to be paid.
- Lastly, you have to register with the Swedish Tax Agency (Skatteverket).
As can be seen, the various measures effectively implemented by the government ensures that Sweden sustains the vibrancy of its start-up culture, where it is easy to set-up a business, obtain capitals for its operations, and facilitate its growth by earnest endeavour and innovation.