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The entrepreneur who relocated her company from New York to Malmö

Melanie Aronson’s first taste of Sweden came in 2014, when she moved to Malmö on a Fulbright Scholarship. Armed with a bachelor's degree in Anthropology and a master’s degree in Documentary Film, she set out to make a documentary about immigration and integration in Sweden. It was through this project she first identified a need for her company, friend-finding app Panion.

The entrepreneur who relocated her company from New York to Malmö
Photo: Melanie Aronson

On moving to Sweden, Melanie experienced one of the most common issues faced by expats: meeting new people.

After interviewing asylum seekers at the Center for Middle Eastern Studies at Lund University as part of her documentary, she found that this was a common issue faced by immigrants of all backgrounds.

“It came out of wanting to rebuild your social circle when you move to a new place,” she says.

The opportunities for public funding and startup support in Sweden also appealed to her and she decided to launch her company Panion, an app that allows you to find friends based on common interests with people nearby.

Visit verksamt.se to find out more about opening a Swedish company

“You tag yourself with keywords: interests, values, experiences and things that really define you and you can run searches for people who like certain things and see it all based on location,” Melanie explains.

Using machine learning to analyse user behaviour based on their interaction habits and personality profiling based on what people are choosing for their keywords, Panion aims to be the go-to app to find a friend quickly, wherever you go.

Photo: Syda_Productions/Depositphotos

Melanie, a former Apple employee, had a large tech and investor network in the US and was more comfortable seeking collaborators in her home country. Although she was living in Sweden, she decided to open her company in the US, as she was unsure whether or not she would settle in Sweden permanently.

After looking into Minc (Malmö’s startup hub) and its accelerator program, Fast Track Malmö, Melanie was told she would need to open a Swedish company if she wanted to get into the sought-after program.

“The accelerator could only invest in one or two foreign companies and they said they didn’t have a slot left for another foreign company,” she recalls.

Lost in translation

Just as Melanie had begun to understand how to form a US company, she realised she would have to open a Swedish company as well as navigate a foreign language and a foreign system.

“My father is a lawyer and he’d been helping me with my American company, but he couldn’t really do much for the Swedish company because he didn’t know the laws or understand the language,” she recalls.

In the first four months after she began to transfer her company to Sweden, Melanie went through three accountants until she found one who could clearly explain the process in English as well as personally trawling through all the business resources she could find.

“I actually struggled a lot,” she admits.

Photo: SergPoznanskiy/Depositphotos

However, eventually she opened a Swedish AB company (limited company), which she explains is most appealing to investors in the tech industry. Then she registered at the Swedish Companies Registration Office (Bolagsverket) before getting her F-tax (F-skatt) number from the Swedish Tax Office (Skatteverket), allowing her to make tax contributions as a sole trader.

Read more on verksamt.se about starting a company in Sweden

“I didn’t have to close down my US company to open my Swedish one, but I did have to transfer the intellectual property and trademarks, so I had to buy them from one company to the other which took some legal and accounting advice.”

Make connections: Find information

The best piece of advice Melanie says she can offer to business owners in a similar situation, is to find people who have already been in your shoes.

“At the accelerator I have all these other companies sharing their research with me. A French company sent me all their research on transferring trademarks to new countries. Create alliances with people who are in similar situations so you can share knowledge,” she advises.

Despite all the challenges Melanie has faced while transferring her company she has no regrets. The future of Panion looks bright, with Melanie preparing to leave the accelerator, launch the final product and pitch to investors all within the coming weeks.

“In terms of the opportunities I’ve had so far in Sweden, it’s worth it. I’ve been talking to investors and there’s a lot of public funding here; it’s a great support when you’re trying to build something from scratch.There’s more trust here. I’ve been able to do a lot of things I couldn’t do without a Swedish company.”

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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