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UK company in Sweden

Having Swedish staff for a UK company.

frank.d
post 30.Nov.2012, 10:40 AM
Post #1
Joined: 4.Oct.2011

Hi,
I am starting a company in the UK but would have some staff in Sweden. There would be no operations in Sweden so there would be no profit in Sweden. The employees in Sweden will be mainly web developers and programmers while everything else would be in the UK.

How would the company pay the employees in Sweden? Would the company have to open a filial in Sweden or?
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johnjohn
post 30.Nov.2012, 12:24 PM
Post #2
Joined: 10.Dec.2010

As they are residents of Sweden you will be paying their taxes ans social contributions which amounts to about 50% of their net wages. Their salary 50000sek per month your cost approximately 100000 per month. You hire them as independent contractors and they deal with their own taxes is another option.
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Yorkshireman
post 30.Nov.2012, 12:30 PM
Post #3
Joined: 22.Nov.2011

QUOTE (frank.d @ 30.Nov.2012, 10:40 AM) *
How would the company pay the employees in Sweden? Would the company have to open a filial in Sweden or?

That is one way to go. Are You saying that You cannot find in the UK cheaper web developers and programmers? Why would You want to pay the 31.4% Company Social Taxes here, rather than the cheaper salaries and national insurance in the UK?
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Coolrunnings
post 30.Nov.2012, 12:31 PM
Post #4
Joined: 15.Jun.2012

Independant contractors will be more expensive since these guys would have to charge you VAT as well.
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Pursuivant
post 30.Nov.2012, 02:14 PM
Post #5
Joined: 12.Aug.2008

What exactly do you hope to achieve with that?
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Bender B Rodriquez
post 30.Nov.2012, 02:28 PM
Post #6
Joined: 25.Mar.2006

QUOTE (Coolrunnings @ 30.Nov.2012, 01:31 PM) *
Independant contractors will be more expensive since these guys would have to charge you VAT as well.

No, not when you sell a service to a foreign company: http://www.skatteverket.se/foretagorganisa...9800010696.html

If the majority of the development is located in Sweden it is considered to be a permanent establishment and you thus have to create a subsidiary (i.e. pay Swedish company tax and Swedish NI and income tax for employees): http://www.skatteverket.se/otherlanguages/...b800094764.html

If it is not considered a permanent establishment you can let the employees handle NI and income tax themselves.

If the employees are to work as independent consultants they have to either:
1. Become sole traders with more than one customer (in order to not circumvent employment laws).
2. Form one or several Ltd's and become employees of those.
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frank.d
post 30.Nov.2012, 08:03 PM
Post #7
Joined: 4.Oct.2011

Thanks for all the answers. My interest in getting Swedish employees comes from the fact that I live in Sweden and would like to be able to work with the developers. I am starting a company in the UK rather than Sweden because of the ease of starting a company there and the fact that there is no need for a share capital and.

I guess the best thing would be to consider having the developers in the UK.
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johnjohn
post 30.Nov.2012, 08:41 PM
Post #8
Joined: 10.Dec.2010

You can start a private firm here with no capital in 10 minutes or an AB for 50000 capital. Sounds like you are making things unnecessarily complex.
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Yorkshireman
post 30.Nov.2012, 09:22 PM
Post #9
Joined: 22.Nov.2011

QUOTE (frank.d @ 30.Nov.2012, 08:03 PM) *
I live in Sweden and would like to be able to work with the developers. I am starting a company in the UK rather than Sweden because of the ease of starting a company there an ... (show full quote)

Even though You create the Parent Company in the UK, and a filial in Sweden, because You (I am assuming) would be the main shareholder and decision maker for the Company ... living in Sweden, put the entire Ltd company at the mercy of the Swedish Tax Authorities, within the EU the Member States reserve the right within the legislation to redesignate the Child company as actually the Parent, if it is reasonable to presume that it is a construct for tax avoidance.

You being in Sweden implies the filial is not the filial but actually the Parent... just be careful wink.gif
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frank.d
post 30.Nov.2012, 09:32 PM
Post #10
Joined: 4.Oct.2011

@johnjohn, how do you start a private company here with no share capital? The only way i know that happens is through those companies that register a UK company for you and then register a filial.

@yorkshireman, i didnt think about it that way but i see your point. I wasn't thinking about this to escape tax, i have no problem paying tax anywhere, the only reason was that 50,000 Aktiebolag share capital which doesn't exist in the UK.I don't really have 50,000 for a share capital now and i dont want to start an enskildafirma so i felt the only way of starting a company which would be a separate entity was a UK ltd.
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Yorkshireman
post 30.Nov.2012, 09:57 PM
Post #11
Joined: 22.Nov.2011

There is nothing wrong with doing it the way that You are thinking, much cheaper to incorporate in the UK than Sweden. wink.gif
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