Learn about what you need to work as a sole trader in Sweden.
One of the historic great powers of Europe, Sweden ranks among the top ten global countries in the human development index. Citizens there enjoy an advanced healthcare system, a top-ranking educational system, and historic storybook towns.
Are you a citizen or visitor to Sweden looking to establish yourself as a sole trader and work in Sweden? Then you’re in the right place! As we continue, please keep in mind that the contents of this article should not be used in place of legal counsel.
What is a sole trader in Sweden?
A sole trader (Einzelunternehmer) in Austria is a self-employed individual who is personally liable for any activities they perform in the course of their business. However, the benefit to becoming a sole trader is the ability to quickly and easily begin setting up your business.
How do I become a sole trader in Sweden?
For Swedish Citizens
Using your personal identification number, you should apply for an F-tax card and value-added tax (VAT) with the Swedish Tax Agency (Skatteverket). You can optionally also choose to register your business name with the Swedish Companies Registration Office (Bolagsverket), which will give you exclusive rights to the use of your company name. You can also apply to the Bolagsverket by mail using Form 903 e.
If you decide to register your business with the Bolagsverket, you can also apply for your F-tax card and VAT through them.
For other citizens of the EU
If you live in the EU, but do not live in Sweden or have a Swedish personal identification number, then you’ll be assigned a coordination number (samordningsnummer) from the Skatteverket by filling out a Tax Application for Foreign Entrepreneurs (Form 4632B02).
Once you have your coordination number, then you can proceed with the other steps listed above for Swedish citizens.
For non-EU citizens
If you are not a citizen of the EU, you’ll have a little more work ahead of you. First, you’ll need to apply for a permit from the Swedish Migration Agency (Migrationsverket) to allow your business to operate. You’ll also need to appoint a manager for your company, who is required to live in Sweden and register that manager with the Bolagsverket. The Skatteverket first requires companies registering in Sweden to determine whether they have a permanent establishment in Sweden or not. As a sole trader who likely lives in Sweden, you’ll likely qualify as a permanent establishment, which will obligate you to pay certain taxes.
Now you’re prepared to register your sole trader business with the Swedish Tax Agency’s Foreign Company Registration. You’ll need the following documents:
A document confirming your right to stay in Sweden
Proof that you are debt-free in the country in which you’ve resided for the past two years
After that, you’ll be responsible for registering for VAT.
What kind of taxes will I need to pay as a sole trader?
While Sweden is associated with a high quality of life, that privilege doesn’t come cheaply. You’ll be required to pay the F-Tax, which indicates you will pay your own social security contributions and corporate tax. You’ll also be required to pay VAT for the services you provide.
As a permanent establishment, you’ll also pay a corporate income tax on the income you generate from your business. At the beginning of each year, you will submit a preliminary tax return that estimates your profits. You’ll then be required to pay a monthly tax based on that preliminary return. At the end of the year, you’ll submit a year-end account summary to Skatterverket. From that summary, you’ll receive a final tax notice to resolve any discrepancies with the monthly taxes you’ve already paid.
Receiving payments in Sweden via Liquid
Liquid is the easy, seamless way to receive payments in Sweden and 175+ countries worldwide. Liquid supports USD and select foreign currencies, including EUR. Payments arrive in 2-5 business days via wire transfer, whether the invoice was sent to an existing client using Liquid or a client who is new to Liquid.
Invoices in Liquid are in USD by default but can also be sent in Euros and other select foreign currencies, allowing vendors to receive payment in their local currencies instead of USD. In addition, Work Orders / Project Proposals can also be agreed to in Euros and other select foreign currencies in Liquid.
Liquid charges clients who initiate payments $3 per US invoice paid and $8 per international invoice paid.
Liquid never charges Vendors to receive payments, even when Vendors are requesting payments from Clients who are not current users of Liquid.
Now you’re ready to start working
for yourself in Sweden!
Now that you’re set up as a sole trader, you’re ready to work on projects you care about for companies across the world. Be sure to stay on top of your monthly income tax payments and enjoy living in one of the happiest countries in the world.
Advice for clients hiring freelancers in Sweden.
Tax authorities in Sweden are cautious that people who should be classified as employees aren’t hired as freelance sole traders. Therefore, if a freelancer has only one client, it may look to the Skatteverket like a client trying to avoid hiring an employee.
Ready to invoice your United States-based clients? Try Liquid today.