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Five ways Sweden should help foreign small business owners

Many businesses across Sweden, as is the case across the world, have been severely affected by the consequences of the coronavirus pandemic. It's often small businesses, without cash reserves or large buffers, that bear the brunt of crises, so what do they need to survive?

Five ways Sweden should help foreign small business owners
What do small businesses run by international residents need from Sweden? Photo: Jonas Ekströmer/TT

Business owners in Sweden have had access to a range of packages, including temporarily reduced or deferred taxes, rent reductions for certain businesses, and loan guarantees.

But with an unclear outlook and many business owners having to rethink their whole business model, what do they need to be able to survive long-term?

These five ideas come from The Local readers who own small businesses. When we asked how they had been affected by the pandemic, some said they had lost the majority of their income while others had been less affected and some won't know the true extent of the impact for some time to come.

1. Advertise help available clearly

Several business owners have told The Local they have struggled to work out what support they are eligible for, and how to apply, without strong Swedish language skills.

“I believe that the information out there needs to be advertised better. The financial help at the beginning was woolly, but now once you find it it is clearer. I applied for a loan from the bank and Almi, but I have received no answer from them, and this was over a month ago,” said one business owner in Jämtland.

A business owner in Västra Götaland described English language support as “terrible”, and said that due to the pandemic they had stopped using an accountant and begun doing this themselves, “which again is not easy in English”.  

You can find English-language information for businesses on Verksamt and from the Swedish government.

2. Think long-term

Many businesses work several months in advance, meaning they won't see the real effects of the pandemic until later in 2020 or even next year.

For others, the long-term consequences of the situation, such as global travel restrictions or changes to how large events are run, may change how businesses can run in the future.

A lot of the support available in Sweden has been time-limited, out of necessity, for example support packages based on income levels between March and May of 2020. But this won't cover all the companies who feel the effects of the pandemic. 

“The support in place is helpful but uncertain if it will carry me through in a worse case or even a bad scenario. I'm not there currently but the future doesn't look encouraging, and in my business the effects won't be realised until later,” American business owner Jim Osmundsen in Trelleborg told The Local.

One business owner in northern Sweden had been forced to let employees go after losing 70 percent of their business income, but the only benefit they had been eligible for was tax referral.


An empty square in the tourist town of Visby this June. Photo: Fredrik Sandberg/TT

3. Stimulate spending

The crisis has changed people's behaviour deeply and dramatically. The uncertainty of the economic situation has curbed spending in retail even despite the lack of lockdown, for example, while people may be more cautious in their spending for years to come.

One way Sweden could help encourage spending, suggested by a reader running a small business in the Stockholm area, is through tax deductions, similar to the existing ROT & RUT deductions which subsidise work carried out by tradespeople such as mechanics, electricians and cleaners. Reducing the cost for the end consumer encourages them to go ahead with spending and gives a boost to these professions, and an expansion of these deductions could give small businesses a boost, the reader argued.

4. More support for sole traders

Self-employed people or sole proprietors (enskilda firmor in Swedish) are not eligible for some of the support measures offered, including state subsidised reduced working hours, or the state covering the cost of sick pay. 

“If I want unemployment benefits from my union, I have to close my business completely, which means losing all remaining income I do have. It's senseless,” said an American business owner who had lost 70 percent of her business during the pandemic.

5. Ensure support is applied equally to those affected

It's necessary that the government has limits on who is eligible for the support. But in some cases, business owners said more flexibility was warranted.

For example, rent reductions were made available for businesses in especially vulnerable industries like restaurants and tourism companies, but this had to be applied for by landlords.

Because many of the eligibility criteria were based on a percentage of income lost year-on-year, newly started companies which began operations after spring 2019, or had a low income in spring 2019 due to starting up, are not eligible for the adjustment support. Businesses with significant seasonal variation in income would also be affected.

Member comments

  1. The system here is extremely bureaucratic, and as an English speaker who has limited knowledge in Swedish (I’m just lacking general language skills) it becomes traumatically difficult to seek government help. After four months I’ve given up waiting for any reply and found myself an angel investor from Greece instead.

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For members

WORK PERMITS

How foreigners can get on the fast track for a work permit in Sweden

It can now take about six months to get a work permit in Sweden, and a year for an extension. Here's how you can get on the fast track.

How foreigners can get on the fast track for a work permit in Sweden

How long does it normally take to get a permit to work in Sweden? 

According to the calculator on the Migration Agency’s website, 75 percent of first work permit applications are completed within three months, and 75 percent of work permit extensions are completed within 14 months. 

These numbers, though, are only for people in non-risk industries. If you are applying for a job in the cleaning, building, hotel and restaurant, or car repair industries — all of which are seen as high risk by the agency — applications can take much longer to be approved. 

For these industries, the calculator suggests a long 12-month wait for a first application and a 17-month wait for an extension. 

This is because of the higher number of unscrupulous employers in these industries who do not pay foreign workers their promised salaries, or do not fulfil other requirements in their work permit applications, such as offering adequate insurance and other benefits. 

So how do you get on the fast track for a permit? 

There are two ways to get your permit more rapidly: the so-called “certified process” and the EU’s Blue Card scheme for highly skilled employees. 

What is the certified process?

The certified process was brought in back in 2011 by the Moderate-led Alliance government to help reduce the then 12-month wait for work permits.

Under the process, bigger, more reputable Swedish companies and trusted intermediaries handling other applications for clients, such as the major international accounting firms, can become so-called “certified operators”, putting the work permit applications they handle for employees on a fast track, with much quicker processing times. 

The certified operator or the certified intermediary is then responsible for making sure applications are ‘ready for decision’, meaning the agency does not need to spend as much time on them. 
You can find answers to the most common questions about the certified process on the Migration Agency’s website

How much quicker can a decision be under the certified process? 
Under the agreement between certified employers and the Migration Agency, it should take just two weeks to process a fresh work permit application, and four weeks to get an extension. 
Unfortunately, the agency is currently taking much longer: between one and three months for a fresh application, and around five to six months for an extension. 
This is still roughly half the time it takes for an employee seeking a permit outside the certified process. 
The Migration Agency told the Dagens Nyheter newspaper in a recent article that in September the average decision had taken 105 days, while over the year as a whole, applications for certified companies had taken 46 days, and those for non-certified companies 120 days. 

How can someone planning to move to Sweden for work take advantage of the certified process? 
Unfortunately, it is very much up to your employer. If you are planning to move to Sweden for work, you should make sure to ask prospective employers if they are certified, or sub-certified through an intermediary firm, and take that into account when deciding which company to take a job with. 
Smaller IT companies are often not certified, as they tend to start off by recruiting from within Sweden or the European Union. 
If you have begun a work permit application with a company that is not certified or sub-certified, then you cannot get onto the fast track even if your employer gets certified while you are waiting for a decision. 
The certified process can also not be used to get a work permit for an employee of a multinational company who is moving to the Swedish office from an office in another country. 
If my employer is certified, what do I need to do?
You will need to sign a document giving power of attorney to the person at your new company who is handling the application, both on behalf of yourself and of any family members you want to bring to Sweden.  
You should also double check the expiry date on your passport and on those of your dependents, and if necessary applying for a new passport before applying, as you can only receive a work permit for the length of time for which you have a valid passport. 

Which companies are certified? 
Initially, only around 20 companies were certified, in recent years the Migration Agency has opened up the scheme to make it easier for companies to get certified, meaning there are now about 100 companies directly certified, and many more sub-certified. 
To get certified, a company needs to have handled at least ten work permit applications for foreign employees over the past 18 months (there are exceptions for startups), and also to have a record of meeting the demands for work and residency permits.  
The company also needs to have a recurring need to hire from outside the EU, with at least ten applications expected a year. 
The Migration Agency is reluctant to certify or sub-certify companies working in industries where it judges there is a high risk of non-compliance with the terms of work permits, such as the building industry, the hotel and restaurant industry, the retail industry, and agriculture and forestry. 
Most of the bigger Swedish firms that rely on foreign expertise, for example Ericsson, are certified. 
The biggest intermediaries through whom companies can become sub-certified are the big four accounting firms, Ernst & Young, Deloitte, KPMG, and Vialto (a spin-off from PwC), and the specialist relocation firms Human Entrance, and Alpha Relocation. Bråthe estimates that these six together control around 60 percent of the market. Other players include K2 Corporate Mobility, Key Relocation, Nordic Relocation, and some of the big corporate law firms operating in Sweden, such as Ving and Bird & Bird. 

What is the EU Blue Card, how can I get one, and how can it help speed up the work permit process? 
Sweden’s relatively liberal system for work permits, together with the certification system, has meant that in recent years there has been scant demand for the EU Blue Card. 
The idea for the Blue Card originally sprung from the Brussels think-tank Bruegel, and was written into EU law in August 2012. The idea was to mimic the US system of granting workers a card giving full employment rights and expedited permanent residency. Unlike with the US Green Card, applicants must earn a salary that is at least 1.5 times as high as the average in the country where they are applying.
Germany is by far the largest granter of EU blue cards, divvying out nearly 90 percent of the coveted cards, followed by France (3.6 percent), Poland (3.2 percent) and Luxembourg (3 percent).

How can I qualify for a Blue Card?

The card is granted to anyone who has an accredited university degree (you need 180 university credits or högskolepoäng in Sweden’s system), and you need to be offered a job paying at least one and a half times the average Swedish salary (about 55,000 kronor a month).

How long does a blue card take to get after application in Sweden? 

According to the Migration Agency, a Blue Card application is always handled within 90 days, with the card then sent to the embassy or consulate named in the application.

In Sweden ,it is only really worth applying for a Blue Card if you are applying to work at a company that is not certified and are facing a long processing time.

EU Blue Cards are issued for a minimum of one year and a maximum of two years. 

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