Key takeaways
- The main business forms in Sweden are the limited company (aktiebolag, AB), the sole trader (enskild näringsidkare / enskild firma), the trading partnership (handelsbolag, HB), the limited partnership (kommanditbolag, KB) and the branch of a foreign company (filial).
- A private AB needs a minimum share capital of SEK 25,000 and pays 20.6% corporate income tax; owners of closely held ABs are subject to the special 3:12 rules on dividends and gains, which were simplified from 1 January 2026 (larger base amount, no salary-withdrawal requirement, shorter qualifying periods).
- Sole traders and partners are taxed on profits as personal business income (municipal + state tax) and pay self-employment contributions; registration is done with the Swedish Companies Registration Office (Bolagsverket) and the Tax Agency (Skatteverket).
Last reviewed: October 2026
Choosing the right legal form in Sweden determines your liability, your tax rate and how you can pay yourself. This guide compares the options in 2026 for founders, freelancers and foreign companies entering Sweden.
Swedish business forms compared (2026)
| Form | Liability | Minimum capital | Taxation | Typical use |
|---|---|---|---|---|
| Aktiebolag (AB) – private limited company | Limited to capital | SEK 25,000 | 20.6% corporate tax; 3:12 rules for owners | Startups, consultants, SMEs |
| Publikt aktiebolag (publ) | Limited | SEK 500,000 | 20.6% | Listed or large companies |
| Enskild näringsidkare (sole trader) | Unlimited, personal | None | Personal income tax + self-employment contributions | Freelancers starting out |
| Handelsbolag (HB) – trading partnership | Unlimited, joint | None | Partners taxed individually | Small partnerships |
| Kommanditbolag (KB) – limited partnership | Mixed (≥1 unlimited partner) | None | Partners taxed individually | Investment structures |
| Filial (branch) | Foreign parent liable | None | 20.6% on Swedish profits | Foreign companies entering Sweden |
| Ekonomisk förening (cooperative) | Limited | None | 20.6% | Cooperatives |
The aktiebolag (AB)
The AB is the standard vehicle for anyone building a business:
- Formation: register with Bolagsverket, deposit at least SEK 25,000 share capital, adopt articles and appoint a board (at least one director, plus a deputy if there are fewer than three directors); at least half of the board must normally reside in the EEA unless Bolagsverket grants an exemption.
- Tax: 20.6% on profits; dividends to individuals are normally taxed at 30% as capital income; for owners of closely held companies, the 3:12 rules tax dividends at 20% within the annual dividend limit and as salary (up to about 52%) above it. New, simpler 3:12 rules apply from 1 January 2026.
- Accounting: annual accounts filed with Bolagsverket; auditor required above size thresholds.
Example: A Stockholm developer invoices SEK 1,500,000 a year through her AB. The company pays 20.6% on profits after her salary; she pays herself a salary up to the state-tax threshold and takes additional profit as dividends within the 3:12 limit, reducing her overall tax compared with a sole trader.
Sole trader (enskild firma)
- No capital required; register with Skatteverket for F-tax (F-skatt) and, if needed, VAT.
- Profits are taxed as income from business at municipal rates (around 30%–35%) plus 20% state tax above the threshold, with self-employment contributions (egenavgifter) of roughly 28.97%.
- Tools such as the periodiseringsfond (tax allocation reserve) and expansionsfond help smooth taxation.
- The owner is personally liable for business debts.
Partnerships (HB and KB)
Partnerships are registered with Bolagsverket and are transparent for tax: each partner is taxed on its share of profits. In an HB all partners have unlimited liability; in a KB at least one partner (komplementär) is fully liable while limited partners risk only their contribution.
Foreign companies: branch or subsidiary?
A foreign company can register a filial with Bolagsverket, which needs a managing director resident in the EEA, and is taxed on Swedish profits at 20.6%. A subsidiary AB offers limited liability and is often preferred for credibility with Swedish clients and banks. Employees working in Sweden trigger Swedish payroll and employer contributions either way.
Frequently asked questions
What types of companies exist in Sweden?
The main forms are the private limited company (AB), the public limited company (publ), the sole trader (enskild firma), the trading partnership (HB), the limited partnership (KB), the branch of a foreign company (filial) and the cooperative (ekonomisk förening).
How much capital do you need to start an AB in Sweden?
A private aktiebolag needs at least SEK 25,000 in share capital; a public company needs SEK 500,000.
What is the corporate tax rate in Sweden?
20.6% on taxable profits, for ABs, branches and other taxable entities.
Should a freelancer in Sweden use an AB or a sole trader?
A sole trader is simpler and cheaper to start, but profits are taxed at personal rates with self-employment contributions. An AB adds administration but allows retained profits at 20.6% and dividends under the 3:12 rules, which often pays off at higher profit levels.
Related guides
- Business expenses in Sweden
- Leaving Sweden: ending your tax residency
- How to obtain tax residency in Sweden
Sources
- Swedish Companies Registration Office (bolagsverket.se)
- Swedish Tax Agency (skatteverket.se) – F-tax, 3:12 rules, self-employment contributions
- Swedish Companies Act (Aktiebolagslagen)
This guide is general information, not personalised legal or tax advice.
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