fact sheet
starting a business – legal frameworks
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Photo: www.imagebank.sweden.se © Henrik Trygg
A representative office A representative office is the most limited presence a foreign-based business can have in Sweden and is little used. Representative offices lack company status and cannot enter into commercial agreements.
Representative offices – the basics
A representative office (representationskontor) performs a very limited range of functions. It cannot engage in any commercial activity other than pure marketing. Neither can it issue its own invoices for services rendered. Hence, a representative office cannot act on its own behalf by using its employees or offices for any kind of trading or business. Limited scope of activities
A representative office cannot accept orders on behalf of the foreign-based company or engage in any activity which could be regarded as tacit acceptance of orders. The foreign-based company must accept all orders and send all invoices. The scope of a representative office’s activities is limited to providing information to customers on behalf of the foreignbased company, and to forwarding offers, bid acceptances, inquiries and so on from customers to the foreign-based company. Thus, the status of a representative office is akin to that of a showroom.
in brief
• No legal entity • Limited scope for activities • No solution for permanent place of business
should apply to the Swedish Financial Supervisory Authority (Finansinspektionen). A bank representative office may only represent the bank and act as an agent for banking and financial services. Registering for tax
A foreign-based company with a representative office in Sweden is not liable to pay tax in Sweden so long as the company does not conduct business from the representative office or other permanent establishment in Sweden. For Swedish tax purposes, conducting business is defined as commercial operations carried on independently, with a degree of continuity and with the objective of making a profit. Since a representative office may not engage in any commercial activity or make a profit, it is exempt from Swedish corporate tax. If the representative office needs to conduct business it should seek to register a branch or limited liability company in Sweden. Registration as an employer
REGISTRATION REQUIREMENTS
A registration is not required for a representative office. However, a bank wishing to start a representative office
Published in January 2010
A foreign entity with a representative office in Sweden that employs staff should register as an employer with the Swedish Tax Agency (Skatteverket). For further information, please
fact sheet
starting a business – legal frameworks
see the Invest Sweden fact sheet “Guide to foreign-based employers with no permanent place of business in Sweden”. Points to remember
The following points are, amongst others, useful to bear in mind when seeking to preserve the status of a representative office: • All agreements are entered into between the Swedish buyer/ seller and the representative office’s foreign-based company. • All invoicing is carried out directly by the foreign-based
company, with no involvement from the representative office. • The representative office cannot act on its own behalf by using its employees or representative office for any kind of trading or business. • The representative office cannot act as a dependent representative of the foreign-based company as it is not a legal entity. Please note that a limited liability company or a branch offers much more commercial flexibility.
useful contacts
Government agencies Swedish Companies Registration Office (Bolagsverket) SE-851 81 Sundsvall +46 60 18 40 00 www.bolagsverket.se The Swedish Companies Registration Office is the government agency that registers new companies as well as changes in established companies and receives annual accounts, etc.
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further information Swedish Financial Supervisory Authority (Finansinspektionen) Brunnsgatan 3 Box 7821, SE-103 97 Stockholm +46 8 787 80 00 www.fi.se The Swedish Financial Supervisory Authority supervises and monitors companies operating in financial markets.
Swedish Tax Agency (Skatteverket) SE-171 94 Solna 0771 778 778 (from Sweden) +46 8 764 86 20 (from abroad) www.skatteverket.se The Swedish Tax Agency is the government agency for taxation, tax collection and national registration of residents.
External experts have reviewed this fact sheet. However, the contents should not be viewed as legal or financial advice but only as an overview of current conditions in Sweden. These may change and thereby render descriptions of laws and other frameworks inaccurate. In all individual cases we equest that advice always be sought with relevant organizations and businesses on specific issues.
at www.investsweden.se Starting a business in Sweden – an introduction Running a business in Sweden – an introduction Corporate taxes in Sweden Guide for foreign-based employers with no permanent place of business in Sweden Business costs and prices of key services Useful information sources