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How to set up a Business in Sweden?

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IndiBoy
post 29.Apr.2012, 11:46 AM
Post #1
Joined: 16.Nov.2010

Hay,

I'm from India and I want to start a business in Sweden.How difficult is it for a foreign national to set up a business in Sweden? Is it good to start a business from a scratch or to buy a ready made company?I have been in Sweden for my masters's in 2009 but my visa extension is rejected I appealed against the decision before the result I left sweden voluntarily in 2011.I'm planning to open an IT consultant company or an web services providers company.Which is the best option for me LLC or A sole Trader?I'm planning to invest anywhere from 7k$-20K$. I also have some unpaid bills in Sweden which I'm gonna payoff.What is the capital amount to start a company 50000kr or 200,000 kr?

Which is the best law firm to contact for the paperwork? I want to start a fresh life as I love Sweden Very much.I have other options also to start a company in cezch or slovakia but I love Sweden as I know how it works.I'm thinking of to pose as a Sole Trader instead of LLC coz of Heavy Taxation.What are my chances in getting approved?How much time it takes for processing?
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redblue
post 29.Apr.2012, 12:32 PM
Post #2
Joined: 27.Jul.2007

This topic has been covered extensively on this forum Link.
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Yorkshireman
post 29.Apr.2012, 12:33 PM
Post #3
Joined: 22.Nov.2011

Before we even talk about business, the basic requirement to support yourself applies.
Let's assume You are single, then You need to prove to Migrationsverket that You have 200.000 SEK to support yourself during the probationary 2 year period. This is exclusive to any income from the proposed business. ie. You cannot count any future salary from the new company. If family member are included also, the amount needed to support during 2 years increases, +100.000 for partner, +50.000 per child.

Now to business ... You also need to prove to Migrastionverket that, and I quote you are able to demonstrate that you have solid experience in the sector and you should also have previous experience running your own business

You also need to provide:
- detailed account of your business plans.
Which includes:
- business plan
- market survey
- contracts with customers/suppliers
- contract for business premises
- business permits (if required)
- investment budget,
- liquidity budget
- profit/loss budget
- budgeted balance sheet.

If they decide the business plan is not realistic, and the business will not reach the required profitability in 2 years, they will refuse the application.

If successful:
You would be on a initial 2 year probationary period, during which Your new company must reach satisfactory profits to support You (and any family members that may also come)

As a Sole Trader, expect to pay between 50-60% in total taxes on income, as an LLC, the amount once factoring in your own income tax, is roughly similar. (However, there are tax benefits that an LLC can take advantage of that a Sole Trader cannot, to minimise tax liabilities.). Though in most cases for small companies, taxation is very similar level.

If the current proposal from the Government goes through during the next year or two, it will create a very good climate for Businesses, since it includes a reduction of Corporate Tax from approx 26% to 15% smile.gif ...but there is a degree of opposition to this proposal sad.gif

LLC's have a share capital requirement though, and regardless of whether bought ready made or not will set-you back a minimum of 50.000:- (and that is not working capital)

So, Your initial budget of 20.000 USD is broken just by the initial requirement to be able to support Yourself for 2 years. (at todays exchange rate You need approx $29800)
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Divan
post 13.May.2012, 04:05 PM
Post #4
Joined: 23.Jan.2012

I am trying to see what it takes for a non EU person to apply for self employment permit, registered as a sole trader.
1) The 200,000 SEK requirement, is that for 2 years or per year? Does this apply to both Enskild Firma and AB?

2) It is new? When was it a new requirement, implemented January 01, 2012? I suppose one must show this minimum amount of 200,000 SEK in the bank account throughout, from the date the business was set up till it is approved?

3) For sole trader, the business name has to be the sole trader's legal name, the same as the one registered with Migrationsverket?? What if the sole trader wants a name that is other than his first and last name, does he have to do a name search first ? Does it cost extra? Example : John Smith wants to start a sole trader business, he registers it as John Smith (under personummer) does he have legal right to use another name for his business such as Peoplelink Consultancy on his business cards? Can he bill (faktura) under John Smith or Peoplelink?
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Yorkshireman
post 13.May.2012, 04:50 PM
Post #5
Joined: 22.Nov.2011

Here is info about setting up as self-employed in Sweden, and the requirements etc...
http://www.investsweden.se/Global/Global/D...lf-employed.pdf
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Divan
post 13.May.2012, 06:25 PM
Post #6
Joined: 23.Jan.2012

Thanks Yorkshireman.

However, some of the questions i had previously aren't in that link. Non EU people who applied in 2011 didn't have that 200,000 sek requirement.These people are still waiting for their self employed permits to be approved, since the minimum wait is 10 to 11 months. That was why i wondered WHEN the 200,000 SEK came into effect and if those who filed their applications last year or before that new 200,000 sek requirement , should they be having that amount in their bank accounts ?

4 of us ( EU) including myself have recently started an AB. We are doing very well in our IT company. A friend of one co founder was trying to provide consultancy for one of our projects. He can fill a needed competence. However, I am suspicious of this person and whether he is a legal resident of Sweden(non EU) He gave his business card with a business name "(I used this as an example) but when I checked allabolag.se that name was not registered . Instead it was under a name that was very similar to his own name with a similar spelling. (say we know him as John Smith, yet in allabolag.se it came up as Johan Smith) The enskild firma was started in mid January 2012.

I suspect that this person has not applied for his self employment permit and is desperately trying to get contracts and the money (towards the 200, 000 SEK) from as many companies and people as he can. This person was previously on a 10 month visa for a 1 year master program which ended June 2011. He claims that he has his visa extended till Dec 2011 and is now waiting for his self employment permit to be approved. I seriously doubt that but how can i check whether he is telling the truth. I doubt he even applied for his self employment visa BEFORE his student visa expired, which is a requirement for Migrationsverket .

At any rate, I am against doing business with a person that may not even be a legal resident in sweden. Once we pay him what he wants what recourse do we have if his self employment permit does not get approved?? He can just disappear back to his country and we will be in hot soup and we cannot even sue him .My partner (the one who is the friend ) thinks I am being paranoid.

Can i check with Skatteverket or Bolagsverket or Migrationsverket to see if this guy is legit? Can i call Skatteverket and ask for his personummer and then call Migrationsverket to see if he has applied for the self employment permit ?

I seem to have read somewhere in the Local that there are bogus companies being set up by crooked swedish lawyers who boguscompanies simply to issue work permits for foreign workers just so they can get to live and work in Sweden. Can anyone find that article??

What do you think?
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Kibiri
post 13.May.2012, 07:29 PM
Post #7
Joined: 1.Jun.2008

Enskild firma do not need to register with bolagsverket. He can, but not needed. You can call skatteverket and ask if he has F-skatt.

If that guy is legal resident, he can still run away to his home country. Even a Swedish person may run away to a non-EU country. There are quite a few Swede's that went to USA and somehow forgot to pay their CNS debt.
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Yorkshireman
post 13.May.2012, 08:08 PM
Post #8
Joined: 22.Nov.2011

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
However, some of the questions i had previously aren't in that link. Non EU people who applied in 2011 didn't have that 200,000 sek requirement.These people are still ... (show full quote)

In 2011, if I remember correctly the requirement was 1 year to support yourself, ie. 100.000, however that was changed since there was too high incidents of companies going belly-up!. So the requirement was extended so that one needs sufficient funds to cover yourself for 2 years.

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
However, I am suspicious of this person and whether he is a legal resident of Sweden(non EU) He gave his business card with a business name "(I used this as an example) b ... (show full quote)

That proves nothing. Allabolag is often behind in updates, and not every type of business (self-employed) has to be registered. You only need to register when sole-trader if you want to protect the trading name you choose to use.

The one thing here though, is that if it is self-employed and not trading as one of the other forms of companies, then just simply ask for his company registration number ... THAT should be His own personnummer smile.gif

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
I suspect that this person has not applied for his self employment permit and is desperately trying to get contracts and the money (towards the 200, 000 SEK) from as many comp ... (show full quote)

It doesn't work like that with the permit. You must prove that You have the funds ... regardless of what revenue and/or salary you expect to draw from the company.

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
This person was previously on a 10 month visa for a 1 year master program which ended June 2011. He claims that he has his visa extended till Dec 2011 and is now waiting for h ... (show full quote)

Simple. Ask him to prove it! That his company and self are legal. If he is, that should be simple to do, after all You could make that a condition of any contracted work, and He shouldn't be offended by that especially if there is nothing to hide. wink.gif

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
At any rate, I am against doing business with a person that may not even be a legal resident in sweden. Once we pay him what he wants what recourse do we have if his self empl ... (show full quote)

This is why You ask him to prove it. Tell your business partners that it is normal for companies to check exactly who they are dealing with.

As the saying goes Just because your paranoid does not mean there isn't someone out there trying to get you wink.gif

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
Can i check with Skatteverket or Bolagsverket or Migrationsverket to see if this guy is legit? Can i call Skatteverket and ask for his personummer and then call Migrationsverk ... (show full quote)

It is normal business practice in Sweden that when doing business-to-business one exchanges company registration numbers. With that You can check easily with skatteverket, UC, heck even Ratsit (www.ratsit.se) ...though you may have to pay a little.

QUOTE (Divan @ 13.May.2012, 05:25 PM) *
I seem to have read somewhere in the Local that there are bogus companies being set up by crooked swedish lawyers who boguscompanies simply to issue work permits for foreign w ... (show full quote)

It is happening all the time, this is why the rules changed in January so that in certain jobs they will look even more closely at the applications, and special requirements during the 1st 3 months or so. Though it is not normally lawyers!
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Yorkshireman
post 13.May.2012, 08:20 PM
Post #9
Joined: 22.Nov.2011

...however, just to add, a company started in January doesn't have enough trading history to be reliably checked. :S
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Puffin
post 13.May.2012, 09:35 PM
Post #10
Location: Dalarna
Joined: 5.Apr.2006

I am pretty confused

I thought that given OPs previous thread
http://www.thelocal.se/discuss/index.php?s...c=50103&hl=

That OP was appealing a student permit refusal and had a job offer in Canada???
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Divan
post 13.May.2012, 10:23 PM
Post #11
Joined: 23.Jan.2012

The first thing that made me suspicious was that the name given on the guy's business card that he gave out, was not a company registered in Sweden that i could find. Let's just say it was "PeopleLink". i couldn't find it anywhere under a registered company, so I looked up his personal name.. I found it in allabolag.se, with a enskild firma registration offering consultancy. I got the personummer minus the last 4 digits.It says he has an F skatt too but doesn't say what it is.

Can someone register an enskild firma under his own name and then give out a business card with a name like "Peoplelink"?

If I call Skatteverket, can i get the full personummer if I give them his name? Someone told me I can do that.

I also happened to know that this guy had approached another company and gave them another name, same last name but with a slightly different first name. Now that is suspicious too, right? I should check both names with Skatteverket too, but will they even release personummers over the phone?

My business partner says that people use aliases all the time so the slight difference in names do not mean a thing, e.g Jon "Johnny" Persson and that i am prejudiced because I also questioned the guy's credentials. I seem to remember a couple of years ago that Gothenburg Univ or was it Chalmers that have stopped accepting students from Parkistan because of too many fake degrees and credentials. This guy claims he is from the US but from indian(india) background. Well, his name sounds more Muslim and Parkistani.

Kibiri, anyone can run away to another country. My point was that this guy with an enskild firma and no ties to sweden, is assuming full liablities as a sole trader yet, if he is illegally in Sweden, those personal liabilities don't mean shit especially if his self employment visa does not get approved.

I told my team that we should only do business with people who have the Biometric residence card that is good for a few years at least beyond the duration of our projects.

Apparently since April 2012, certain start ups such as service and trading entities would be looked at more closely by Migrationsverket?. I guess consultancy would fall under services? That would mean this guy stands even less of a chance to be approved.
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