KNOWLEDGE BASE

EUROPEAN HOLDING COMPANIES

The Swedish Holding Company

Overview Related Resources Sweden Key Elements

HOW TO PROCEED

OVERVIEW

Definition

The Swedish Holding Company is a regular company which falls within the scope of general tax law and therefore benefits from the double taxation treaties and the European tax directives.

Legal Form

A Swedish company can be constituted as an “aktiebolag” (public limited company- AB).

Formation

The minimum share capital for incorporation of a Swedish company is SEK100.000 which must be fully paid up.

A company incorporated as an “AB” may have bearer shares.

Taxation

A Swedish company is fully subject to tax on its worldwide income at a normal rate of 26.3%.

Income

Corporate income tax is charged on the taxable business income computed according to the accrual method of accounting. Generally such includes the worldwide income from the company.

Dividends Exemption

Dividends from shares held as business assets are exempt from tax in Sweden.

Shares are deemed to be held as business assets if they are not held as current assets and if the recipient owns at least 25% of the voting power or the shares are held for organizational purposes. The foreign company must be subject to tax at a rate comparable to the Swedish tax.

Listed shares are deemed to be held as business assets if the Swedish holding company owns more than 10% of the voting rights or share capital for a minimum period of 1 year.

Capital Gains Exemption

Capital gains from the sale of shares are exempt from tax if the same conditions that apply to dividends are met.

Interest and Royalties

See income above.

Some Advantages of the Swedish Holding Company

Besides the common advantages of a holding company, the Swedish Holding Company may also enjoy from the following:

Exemption from Withholding Tax on Payment of Dividends

Dividends distributed by a Swedish holding company are exempt from withholding tax if all the following conditions are met:

  • The shares are held as business assets.
  • The recipient is subject to income tax at a tax rate of at least 15,4%.
  • The recipient owns at least 25% of the share capital of the Swedish company.

If the recipient is resident in a country listed in the “White List”, the previous conditions are deemed to be met.

Exemption from Withholding Tax on Payment of Interest

Interest paid by a Swedish company is exempt from withholding tax.

Exemption from Withholding Tax on Payment of Royalties

No withholding tax is levied on payments of royalties made by a Swedish company to foreign companies.

Back to top

RELATED RESOURCES

Double Tax Treaties

Back to top

SWEDEN KEY ELEMENTS

Formation
Legal Form: Public limited company (AB)
Minimum Subscribed Capital: SEK100.000
Minimum Paid-Up Capital: SEK100.000
Number of Shareholders: 1
Type of Shares: Registered or bearer
Substance Requirements: Nil
Taxation
Capital Duty: 1%
Net Worth Tax: 0%
Corporate Income Tax: 26.3%
Double Tax Treaties: 78
Dividends Exemption: 100%
Holding Requirements: 25%
Capital Gains Exemption: Yes
Holding Requirements: 25%
Tax Credit: Yes
Relief of Losses: Carry forward indefinitely
CFC Rules: Yes
Debt-to-Equity Ratio: No
Withholding Taxes
Dividends: EU Parent Co-
Treaty Countries- 0%-30%
Others- 30%
Interest: 0%
Royalties: 0%
Liquidation: Nil

Back to top
FREE INITIAL CONSULTATION

A bespoke 'offshore' solution can be complex and requires careful planning and execution. We therefore encourage our clients to contact us directly, without obligation.

All of our consultants in our offices provide a Free Initial Consultation and will gladly assist with advice on how to approach your particular challenge.

To call a consultant, please click on the button below for a full listing of our office contact details. Should you prefer to request a callback, arrange a meeting please select one of the options above.

Legal Warnings | Privacy Policy | Feedback     OCRA Worldwide 1995 -
Disclaimer: Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other
professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission.