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Sweden slammed for foreign company hurdles

Sweden has been warned by the European Commission that it is putting too many bureaucratic hurdles in the way of foreign companies that want to set up subsidiaries here.

Michel Barnier, the European Commissioner responsible for the EU’s internal market, has told the Swedish government that laws that require some European service-sector companies to formally establish branches in Sweden before doing business here, forcing them to file separate accounts, was a breach of the EU’s services directive.

In a statement delivered to the Swedish government last month, Barnier also criticized Sweden for requiring foreign service sector companies without a managing director in the country to appoint a Swedish resident as an official representative.

The document also gives Sweden a rap over the knuckles for taking up to four months to process the paperwork of foreign companies applying to set up Swedish branch or subsidiary. The Commission argued that two weeks should be ample in most cases.

“The Commission is of the opinion that the registration of a foreign branch should be a simple and automatic process that does not require such a long waiting time, particularly now that electronic processes make it possible to send applications, decisions and documents quickly,” Barnier wrote.

The criticism marks the latest stage in a long-running disagreement between Sweden and the Commission over the way Sweden regulates the establishment of foreign companies.

Sweden was first warned in 2008 that its legislation violated EU law. It has now been given two months to take the necessary steps to comply with the Commission’s demands.

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ABB

Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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