The global marketplace is more accessible to entrepreneurs and their startups than ever before. This doesn’t just mean you’re limited to just gaining customers from different countries. It is also more practical to run your business in another country entirely.
Sweden is among the most popular geographical targets for startups at the moment. Scandinavia may not have been at the forefront of your mind when considering locations. But placing your focus here can help inform the success of your burgeoning company.
There are several elements to consider when deciding to take your startup abroad. Let’s run through why Sweden can be a positive choice alongside the practical actions you need to take to make the idea a reality.
Why Choose Sweden?
With a global marketplace to choose from, why is it a good idea to choose Sweden?
Among the key incentives are:
An Entrepreneurial Environment
There have been changes in the country’s business infrastructure over the last few decades. This has created an environment that empowers startups to thrive. A process of deregulation following the financial crisis in the 1990s brought in a series of measures designed to encourage private competition. Sweden has a low corporation tax rate of 22%. There is also legislation to block mergers of large corporations. This makes for a landscape in which small enterprises can not just function but have a good chance of growth.
A Thriving Tech Scene
Sweden has gained a reputation as the Silicon Valley of Europe. This is the result of a tech-positive approach within the culture. A government initiative in the 1990s committed to putting a computer in every Swedish home. There has also been a consistent focus on building fast and stable networks and encouraging citizens to learn to code. As such, this is a country of tech innovations. Skype, Minecraft, SoundCloud, and Spotify were all founded in Sweden. If yours is a tech startup, you’ll find a professional community that pushes one another to thrive.
Prepare the Basics
In some ways, forming a startup in Sweden is much the same as anywhere else in the world. There are basic steps for getting your small business up and running and to lay solid foundations for growth. These include formulating a well-researched business plan, securing funding, and outlining the resources you need in your first years. However, you may find some difficulties in how to adjust some details of these basics to be relevant in Sweden.
As part of your business plan, it’s always important to gain perspectives on the markets and where you fit into them. While Sweden may be considered generally one of the best places in the world to form a startup, it’s still subject to market variances. You can certainly perform some of your research online. But you can get high-quality up-to-date data by contacting the local “branschorganisation” (trade association) for your industry.
Finances may also be problematic. Lenders in your home country are likely to be reluctant to provide funding for a venture abroad. The good news is if you’re choosing to move to Sweden to run your startup there are sources you may be able to utilize. Almi Företagspartner AB is a state-operated organization that provides small to mid-sized company loans and microloans.
Consider Remote Operations
Even before COVID-19, remote operations were popular in Sweden. In 2019, 30% of employees worked from home. This has risen in light of the pandemic and is expected to continue beyond it. As such, it’s worth considering how to make your startup fit for remote working processes.
This approach can present various points of security vulnerability. You may find your small business is at risk of severe negative consequences if you overlook strict cybersecurity measures. Make certain there is an information technology (IT) professional on your staff. They must have experience in designing and implementing network security. Implement safe online behavior training for your remote staff through elearning modules. Even access to virtual private networks (VPNs) to keep your staff’s home networks secure can be effective.
Adhere to Local Regulations
Some of the most challenging aspects of starting any business are the legislative and regulatory aspects. This begins with some key legal documents most companies need to possess whether you’re a small or global enterprise. A memorandum of association (known as a stiftelseurkund in Sweden) is one of the first you’ll have to draw up if your startup is a new limited company. Alongside ensuring these documents are legally compliant, you should make certain they are available in both your native language and translated accurately to Swedish.
Sweden also requires business owners to possess certain permits. Some of these will be familiar safety inspections and certifications. Others are more unusual. For instance, in retail, you have to use a legally-compliant cash register. Some of these will be specific to the industry or profession you’re entering, so it’s important to do your research on which permits you’ll need.
It’s also vital to remember Sweden takes its employee rights very seriously. The Employment Protection Act outlines regulations for the 4 acceptable types of fixed contract employment. This includes one about handling employees that are over the age of 67. Swedish employees have rights to parental leave, holiday, and pension contributions from their employers too. You need to familiarize yourself with these so you don’t inadvertently fall afoul of regulations. It’s worth checking out the Swedish government’s translations of employment law to make a positive start here.
How & Why to Startup a Business in Sweden – Conclusion
Sweden is considered one of the best places in the world to create a startup, particularly in tech fields. However, it’s important to understand how your basic planning needs to be adjusted to meet Swedish standards. With a growing demand for remote work, it’s worth adopting tools and professionals to make sure your business is fit for purpose. There are some complex local regulations to follow. But these are designed to ensure a positive experience for everyone involved. With some preparation and commitment, you can join the thriving culture of successful small entrepreneurs in Sweden.
How & Why to Startup a Business in Sweden, written exclusively for Daily Scandinavian by Ainsley Lawrence. Ainsley is a freelance writer from the Pacific Northwest. She is interested in better living through technology and education. She is frequently lost in a good book.
Other articles by Ainsley Lawrence:
Swedish Weddings: Traditions and Trends
Why More People Should Be Eating the Nordic Diet
Is Dual Citizenship in Scandinavia Right for You? The Challenges of Being Multinational