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How this Brazilian business owner began importing goods to sell in Sweden

Setting up your own business can be both financially and professionally rewarding. But it can also be confusing if you’re not living in your home country. Business owner Anna Xavier shares her top tips for importing goods to Sweden from outside the EU.

How this Brazilian business owner began importing goods to sell in Sweden
Photo: Anna Xavier in Stockholm

When Brazilian native Anna Xavier moved to Sweden several years ago it didn’t take her long to find full-time work. She was soon hired as a product developer for Swedish cosmetics company Oriflame, helping to develop around 400 cosmetics and 350 products each year.

Despite her extremely busy day job, Anna decided to start her own business on the side.

“It was a crazy idea to be honest, but I really fell in love with the idea of having my own business and brand,” says Anna.

Anna’s initial plan was to launch her own line of breastfeeding clothes, an idea she had after the birth of her daughter in 2014. She consulted a local startup advisory centre to start gathering information about how to set up her business.

Setting up a Swedish business

Setting up my business was relatively easy. I just filled in a form on the Swedish Tax Agency (Skatteverket) website and payed a fee,” recalls Anna.

Click here to register your company on verksamt.se

She advises budding business owners to make sure they choose the correct commodity code (varukoder) that describes the nature of the goods that are being imported. It’s a crucial step as this code is linked to the rate of duty applicable for different products as well as any other charges that must be paid on import.

“You need to be clear what your business sets out to sell, for example, cotton clothes or women’s leather clothes. It’s very detailed and there is an extensive list you have to go through and make sure you don’t miss something you might need later.”

Once Anna’s business was up and running, she set up her website and a business email address so that when she communicated with suppliers everything looked legitimate.

“I registered the business before I started importing. I wanted to show I had an established business before I started contacting suppliers.”

It was while in the process of contacting suppliers that she got the idea to start importing children’s socks from Brazil. Fortunately, the products came under the same commodity code that she had listed when she set up her company so she didn’t have to establish an entirely new business. She just needed to get the socks from Brazil to Sweden, which she realised may not have been as easy as it seemed. Luckily, the business she was dealing with was highly experienced in exporting goods.

Importing goods from outside the EU? Get expert advice from verksamt.se

“I contacted the company and they were very straightforward. They are an established brand in Brazil so they really knew what they were talking about.”

Regulatory requirements

The problem came when she realised she was unsure of the regulatory requirements surrounding importing. Once again, she struggled to find the information in English so decided to do a trial run to figure it out herself.

“I didn’t know if there would be restrictions on materials or anything. I ordered a test shipment and was quite nervous but the benefit was that the company was experienced so they did everything correctly on their side.”

Everything went according to plan and it wasn’t long before Anna’s samples were delivered.

Importing goods from outside the EU? Get expert advice from verksamt.se

“There were no issues with customs. The transportation company called me when the goods arrived in Sweden and asked me to pay their service as well as the customs fee altogether, which I did. And then they did all the customs clearance and delivered the goods to my door.”

In part, this was due to the fact Anna used a shipping company rather than the postal service.

“Generally it’s best to use a shipping company when you have a certain quantity. It’s more traceable and a lot more of a reliable and faster service than by regular post.”

She explains that the shipping company ensures everything is done correctly, something which is in their interest too as otherwise they will responsible for returning the goods.

Since that first shipment of samples, it’s been fairly smooth sailing for Anna’s business. She does recommend that non-Swedish speakers hire an accountant who speaks the language to help with the tax forms as the Swedish Tax Agency (Skatteverket) can be strict when it comes to even minor errors.

'Calculate your costs'

For business owners planning to import products, Anna has one final piece of advice when it comes to ordering goods from outside the EU.

“Calculate your costs so that you actually make money. You have to add the cost of transporting the goods which can be expensive, add the Swedish customs duty (Tullverket) which is the importation cost, and then add the cost of VAT, which in Sweden is referred to as ‘moms’, for all of that, and pay it in advance.”

Importing from outside the EU? Get expert advice from Verksamt

She adds that you may get a later discount on the moms if you don’t sell as much as you have imported, but you need to have the money to pay for your estimated sales upfront.

“You have to take this into consideration when you’re planning your cash flow or you could get into trouble.”

This article was produced by The Local Creative Studio and sponsored by verksamt.se.

 
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PROPERTY

EXPLAINED: Will Swedish housing prices plummet as interest rates rise?

The Swedish financial supervisory authority warned on Wednesday that rising interest rates could lead to house prices falling "quite sharply". How likely is it that this will happen?

EXPLAINED: Will Swedish housing prices plummet as interest rates rise?

What financial circumstances might make it difficult for borrowers to repay loans?

With an increase in the cost of living, including rising interest rates and rising electricity prices, there are plenty of circumstances that may make it difficult for borrowers – especially those holding large debts in relation to their income – to repay their mortgages.

Households with large debts are therefore more sensitive to an increase in interest rates, according to the Swedish financial supervisory authority, known in Swedish as Finansinspektionen (FI).

The agency published its annual Swedish Mortgage Market report on Wednesday.

“Large debts also mean a higher sensitivity if you were to suffer unemployment during an extensive recession,” said Henrik Braconier, the authority’s chief economist.

Other factors that could stretch borrowers’ finances include rising energy prices, higher food prices, and growing inflation.

“Apples, oranges, tomatoes have gone up by 30 percent,” said Américo Fernández, a household economist at SEB. “Wheat is coming from Ukraine and it’s getting harder and harder to get hold of.”

READ ALSO: 

Will homeowners become unable to repay their mortgage loans?

Not according to Fernández.

“One of the last things Swedish households will fail to make their payments on is their mortgage and their houses,” he said. “They would rather decrease their spending on vacations abroad, or restaurants.”

The FI report noted that most new mortgages include margins that allow for fluctuations in the borrower’s finances. This means that mortgage holders have a cushion that allows them to handle financial changes.

“Our stress test shows that they can handle increases in the interest rate and also loss of income,” said Magnus Karlsson, FI’s director of macroanalysis. “New mortgages have margins in them calculating discretionary income, and will be able to absorb increases in interest rates and loss of income.”

SEB foresees an interest rise of up to three percent over the next two years, Fernández said,an increase that can be absorbed by most households.

Both Fernández and Karlsson agreed that if homeowners have to cut back on spending, those cuts will not come from debt repayment, but from their disposable income – the money they might ordinarily spend on entertainment, eating out, or travelling.

So while household spending may have to change, financial stability is not at stake for most households.

What’s going on with the housing market?

Right now, a record number of mortgage-holders have loans that are worth more than 4.5 times their income. This year, more than 14 percent of new mortgagors took on such large loans, compared to 6.3 percent last year.

A “low interest rate, increase in housing prices, increase in disposable real income and a housing market that is not functioning well” are all factors in the large debts that homeowners have incurred today, Karlsson argued.

Fernández noted that there is an imbalance between the low supply of housing and the high demand for housing, which is in part responsible for the high housing prices we see today.

He said a decrease in price of a few percentage points would not be surprising: “We’re coming from two years of exaggerated prices.”

Will housing prices begin to decrease after two years of increasing prices?

Calculations for three different scenarios tested by FI show that housing prices will decrease, Karlsson said.

While the agency does not predict housing prices, its report shows that under three different scenarios – the first an increase in mortgage interest rate, the second an increase in energy prices, and the third a combination of the first two with a reversal to pre-pandemic housing preferences – prices will decrease.

The Local Sweden reported last year about increasing housing costs in Sweden, spurred on in part by a desire for bigger homes further away from urban areas during the COVID-19 pandemic.

Fernández called the two years of increasing housing costs “surprising.”

“10-12 percent two years in a row, that’s historical in these uncertain times,” he said, noting that prices were still increasing in figures for March this year.

What sorts of housing will see the largest price decrease?

The FI report also included various scenarios of how the price of different types of housing may fluctuate based on changes in the interest rate.

One scenario assumed a 1 percent increase in interest rates this year and a 0.5 percent increase next year, and predicted that while the price of apartments owned in a cooperative – called bostadsrätter – would fall only slightly, the price of detached houses would fall by 10 percent.

Another calculation that accounted for rising electricity prices and a decline in new housing purchases found that the price of bostadsrätter and detached houses risked falling by an average of 30 percent.

Is there a plan to let borrowers end their mortgage terms early?

“We believe it needs to be simpler and more inexpensive for households to repay their mortgages early,” FI Director General Erik Thedéen is quoted as saying in a press release published by the agency on Wednesday.

To that end, Thedéen said at a press conference that the agency had sent a request to the government to change the calculation model for how banks are compensated when mortgages are terminated early.

“When you terminate a loan agreement and the bank incurs costs, it must be reimbursed,” Thedéen said. “But at present the banks are overcompensated, that is what our calculations show. If the government follows our line and changes the model and follows our line, then the banks must simply adapt.”

When asked about the likelihood of this request being granted, FI recommended reaching out to the Ministry of Justice for comment.

What does this mean for foreigners in Sweden?

If you’re already a mortgage holder, then as Karlsson and Fernández assured, mortgage calculations include a cushion that allow for changes in your financial circumstances.

If homeownership is in your future, housing prices may begin to decrease in the near future, so it’s worth keeping an eye on your local real estate listings.

By Shandana Mufti

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