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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

WORKING IN SWEDEN

CHECKLIST: Here’s what you need to do if you move away from Sweden

What authorities do you need to inform before you leave, are you liable to Swedish tax and how can you access your Swedish pension? Here's a checklist.

CHECKLIST: Here's what you need to do if you move away from Sweden

Tell the relevant authorities if you’re leaving for more than a year

If you’re planning on leaving Sweden for more than a year, you will have to let the authorities know. The main authorities in question are Skatteverket (the Tax Agency) and Försäkringskassan (the Social Insurance Agency).

Försäkringskassan

You have to tell Försäkringskassan when you leave so they can assess whether or not you still qualify for Swedish social insurance. As a general rule, you aren’t eligible for Swedish social insurance if you move away from Sweden, but there are exceptions, such as maternity or paternity benefits if you’re moving to another EU country.

This also applies to any family members who move with you – any over-18’s should send in their own documentation to Försäkingskassan about their move abroad. If you’re moving abroad with anyone under 18, you can include them in your own report to Försäkringskassan.

If both legal guardians are moving abroad together, both need to include any children in their application. If one legal guardian is moving abroad and the other is staying in Sweden, you need the guardian staying in Sweden to co-sign your application. If you are the sole legal guardian of any under-18’s travelling with you, you don’t need any documentation from the other parent.

You can register a move abroad with Försäkringskassan on the Mina sidor service on their website, here (log in with BankID).

Skatteverket

If you are moving abroad for a year or longer, you also need to tell the Tax Agency. This also applies if you were planning on moving abroad for less than a year but ended up staying for longer.

If you move to another Nordic country, you will also need to register your move with that country’s authorities if you will be there for six months or more. You’ll be deregistered from the Swedish population register the same day you become registered in another Nordic country’s register.

This doesn’t mean that you’ll lose your personnummer – you’ll still be able to use it if you ever move back to Sweden – but you will no longer be registered as resident in Sweden.

Similarly to Försäkringskassan, you will also need to report any children you are bringing with you, and both legal guardians must sign the form, whether or not both guardians are moving abroad or not.

In some cases, you may still be liable to pay tax in Sweden even if you live abroad – particularly if you are a Swedish citizen or have lived in Sweden for at least ten years. This could be due to owning or renting out property in Sweden, having family in Sweden, or owning a business in Sweden.

You can tell the tax agency of your plans to move abroad here.

Contact your a-kassa, if relevant

If you are member of a Swedish a-kassa (unemployment insurance), make sure you tell them that you’re leaving the country. As a general rule, you have unemployment insurance in the country you work in, so you will most likely have to cancel your a-kassa subscription.

If you are moving to another country with the a-kassa system, such as Denmark or Finland, it may pay to wait until you have joined a new a-kassa in that country before you cancel your membership in Sweden.

This is due to the fact, in some countries, you only qualify for benefits once you fulfil a membership and employment requirement. In Sweden and Denmark, you must have been a member for 12 months before you qualify. In Finland, the membership requirement is 26 weeks.

If you qualify for a-kassa in Sweden before you leave the country, you may be able to transfer your a-kassa membership period over to your new a-kassa abroad and qualify there straight away, but this usually only applies if your period of a-kassa membership is unbroken.

Check what applies in your new country before you cancel your membership in Sweden – your a-kassa should be able to help you with this.

Contact your union, if relevant

Similarly, if you are a member of a Swedish union or fackförbund, let them know you’re moving abroad.

If you’re moving to another Nordic country, they might be able to point you in the direction of the relevant union in that country, if you want to remain a member of a union in your new country.

If you’re moving to another EU country, you may be able to remain a member of your Swedish union as a foreign worker with the status utlandsvistelse.

If you chose to do this, you will usually pay a lower monthly fee than you do in Sweden, and they can still provide assistance with work related issues – although it may make more sense to join a local union in your field with more knowledge of the labout market.

If you don’t want to be a member of a union in your new country and don’t want to be a member of a Swedish union, you should contact your  union and ask them to cancel your membership.

Collect relevant documents regarding your Swedish pension

If you have worked in Sweden and paid tax for any length of time, you will have paid in to a Swedish pension. You retain this pension wherever you move, but you must apply for it yourself.

To do so, you will need to give details of when you lived and worked in Sweden, as well as providing copies of work contracts, if you have them. If you have these documents before you leave Sweden, make copies so that you can provide them when asked.

If you move to the EU/EES or Switzerland, you may also have the right to other, non-work based pensions, such as guarantee pension for low- or no-income earners, or the income pension complement (inkomstpensionstillägg).

Currently, you can receive your Swedish pension once you turn 62 – although there is a proposal in parliament due to raise pension age to 63 for those born after 1961 from 2023, so this may change.

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