HomeReportsBureau of Economic and Business Affairs2019 Investment Climate Statements...Sweden

# 					2019 Investment Climate Statements: Sweden			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Sweden is generally considered a highly-favorable investment destination.  Sweden offers an extremely competitive, open economy with access to new products, technologies, skills, and innovations.  Sweden also has a well-educated labor force, outstanding communication infrastructure, and a stable political environment, which makes it a choice destination for U.S. and foreign companies.  Low levels of corporate tax, the absence of withholding tax on dividends, and a favorable holding company regime are additional incentives for doing business in Sweden. 

Sweden’s attractiveness as an investment destination is tempered by a few structural, business challenges.  These include high personal and VAT tax regimes. In addition, the high cost of labor, rigid labor laws and regulations, a persistent housing shortage, and the general high cost of living in Sweden can present challenges to attracting, hiring, and maintaining talent for new firms entering Sweden.  Historically, the telecommunications, information technology, healthcare, energy, and public transport sectors have attracted the most foreign investment. However, manufacturing, wholesale, and retail trade have also recently attracted increased foreign funds. 

Overall, investment conditions remain largely favorable.  Forbes Magazine ranked Sweden second in “The Best Countries for Business for 2019,” a ranking that takes into account factors such as property rights, innovation, taxes, technology, corruption, freedom, red tape, and investor protection.  In the World Economic Forum’s 2017-2018 Competitiveness Report Sweden was ranked twelfth out of 138 countries in overall competiveness and productivity.  Also in 2018, Transparency International ranked Sweden as one of the most corruption-free countries in the world –third out of 180. 

In addition, Sweden is well equipped to embrace the Fourth Industrial Revolution, with a superior IT infrastructure.  Bloomberg’s 2019 Innovation Index ranked Sweden in seventh place among the most innovative nations on earth. Sweden is a global leader in adopting new technologies and setting new consumer trends.  U.S. and other exporters can take advantage of a test market full of demanding, highly sophisticated customers. 

*Table 1: Key Metrics and Rankings*

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Towards Foreign Direct Investment**

There are no laws or practices that discriminate or are alleged to discriminate against foreign investors, including and especially U.S. investors, by prohibiting, limiting or conditioning foreign investment in a sector of the economy [either at the pre-establishment (market access) or post-establishment phase of investment].  Until the mid-1980s, Sweden’s approach to direct investment from abroad was quite restrictive and governed by a complex system of laws and regulations. Sweden’s entry into the European Union (EU) in 1995 largely eliminated all restrictions. National security restrictions to investment remain in the defense and other sensitive sectors, as addressed in the next section “Limits on Foreign Control and Right to Private Ownership and Establishment.”

The Swedish Government recognizes the need to further improve the business climate for entrepreneurs, education, and the flow of research from lab to market.  Swedish authorities have implemented a number of reforms to improve the business regulatory environment and to attract more foreign investment. 

**Limits on Foreign Control and Right to Private Ownership and Establishment**

There are very few restrictions on where and how foreign enterprises can invest, and there are no equity caps, mandatory joint-venture requirements, or other measures designed to limit foreign ownership or market access.  However, Sweden does maintain some limitations in a select number of situations:

- Accountancy:  Investment in the accountancy sector by non-EU-residents cannot exceed 25 percent.
- Legal services:  Investment in a corporation or partnership carrying out the activities of an “advokat,” or lawyer, cannot be done by non-EU residents.
- Air transport:  Foreign enterprises may be restricted from access to international air routes unless bilateral intergovernmental agreements provide otherwise.
- Air transport:  Cabotage is reserved to national airlines.
- Maritime transport:  Cabotage is reserved to vessels flying the national flag.
- Defense:  Restrictions apply to foreign ownership of companies involved in the defense industry and other sensitive areas.

Swedish company law provides various ways a business can be organized.  The main difference between these forms is whether the founder must own capital and to what extent the founder is personally liable for the company’s debt.  The Swedish Act (1992:160) on Foreign Branches applies to foreign companies operating through a branch and also to people residing abroad who run a business in Sweden.  A branch must have a president who resides within the European Economic Area (EEA). All business enterprises in Sweden (including branches) are required to register at the Swedish Companies Registration Office, Bolagsverket.  An invention or trademark must be registered in Sweden in order to obtain legal protection. A bank from a non-EEA country needs special permission from the Financial Supervision Authority (Finansinspektionen) to establish a branch in Sweden. 

Sweden does not maintain a national security screening mechanism for inbound foreign investment.  However, the government is currently considering how to implement the EU Commission’s recently approved investment screening framework, as well as tightening national investment policies.  Suggested regulations would not likely be in place until 2021 at the earliest. U.S. investors are treated equally relative to other foreign investors in terms of ownership and scrutiny of investments.

**Other Investment Policy Reviews**

The Organization for Economic Cooperation and Development (OECD) published an economic snapshot for Sweden in March 2019:  https://www.oecd.org/economy/surveys/OECD-economic-survey-Sweden-2019-executive-summary-brochure.pdf 

**Business Facilitation**

Business Sweden’s Swedish Trade and Investment Council is the investment promotion agency tasked with facilitating business.  The services of the agency are available to all investors. 

At http://www.verksamt.se , a collaboration of several Swedish government agencies have posted relevant guides and services pertaining to registering, starting, running, expanding and/or closing a business.  Sweden defines a micro enterprise as one with less than 10 employees, a small enterprise with less than 50 employees, and a medium enterprise with less than 250 employees.  All forms of business enterprise, except for sole traders, must register with the Swedish Companies Registration Office, Bolagsverket, before starting operations. Sole traders may apply for registration in order to be given exclusive rights to the name in the county where they will be operating. Online applications to register an enterprise can be made at http://www.bolagsverket.se/en .  The process of registering an enterprise can take a few days or up to a few weeks, depending on the complexity and form of the business enterprise.  All business enterprises, including sole traders, must also register with the Swedish Tax Agency, Skatteverket, before starting operations. Relevant information and guides can be found at http://www.skatteverket.se .  Depending on the nature of business, companies may also need to register with the Environmental Protection Agency, Naturvårdsverket, or, if real estate is involved, the county authorities.  Non EU/EEA citizens need a residence permit, obtained from the Swedish Board of Migration, Migrationsverket, in order to start up and/or run a business.

**Outward Investment**

The Government of Sweden has commissioned the Swedish Exports Credit Guarantee Board (EKN) to promote Swedish exports and the internationalization of Swedish companies.  EKN insures exporting companies and banks against non-payment in export transactions, thereby reducing risk and encouraging expanding operations. As part of its export strategy presented in 2015, the Swedish Government has also launched Team Sweden to promote Swedish exports and investment.  Team Sweden is tasked with making export market entry clear and simple for Swedish companies and consists of a common network for all public initiatives to support exports and internationalization.

The Government does not generally restrict domestic investors from investing abroad.  The only exceptions are related to matters of national security and national defense; the Inspectorate of Strategic Products (ISP) is tasked with control and compliance regarding the sale and exports of defense equipment and dual-use products. ISP is also the National Authority for the Chemical Weapons Convention and handles cases concerning targeted sanctions.

							2. Bilateral Investment Agreements and Taxation Treaties					

Sweden has concluded bilateral investment treaties (BITs) with the following countries:

Albania, Algeria, Argentina, Armenia, Belarus, Bulgaria, Chile, China, Cote d’Ivoire, Croatia, Czech Republic, Ecuador, Egypt, Estonia, Ethiopia, Georgia, Guatemala, Hong Kong, Hungary, India, Indonesia, Iran, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Macedonia, Madagascar, Malaysia, Malta, Mauritius, Mexico, Mongolia, Morocco, Mozambique, Nicaragua (signed but not in force), Nigeria, Oman, Pakistan, Panama, Peru, Philippines, Poland, Republic of Korea, Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Slovakia, South Africa, Sri Lanka, Tanzania, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Venezuela, Vietnam, Yemen, and Zimbabwe (signed but not in force). Sweden does not have a BIT with the United States.  Since the Lisbon Treaty took effect in December 2009, the EU has managed investment negotiations with third countries on behalf of its member states. The EU is conducting the following ongoing negotiations: 

- MERCOSUR (Argentina, Brazil, Paraguay, Uruguay) – part of a new Association Agreement
- Mexico – modernization of the existing Global Agreement
- Chile – an update to the current Association Agreement
- Australia and New Zealand – negotiations for Free Trade Agreements with both countries.

A full list of investment agreements for Sweden is available at the following link: http://investmentpolicyhub.unctad.org/IIA/IiasByCountry#iiaInnerMenu 

Sweden and the United States signed a bilateral taxation treaty in 1994, which was amended in 2005.  More information is available at https://www.irs.gov/businesses/international-businesses/sweden-tax-treaty-documents 

Sweden has concluded treaties of double taxation avoidance with the following countries:  Albania, Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Belarus, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Faeroe Islands, Finland, France, Gambia, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kenya, Korea, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mauritius, Mexico, Montenegro, Namibia, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Switzerland, Taiwan, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, United States, Venezuela, Vietnam, Zambia, and Zimbabwe.   

							3. Legal Regime					

**Transparency of the Regulatory System**

As an EU member, Sweden has altered its legislation to comply with the EU’s competition rules.  The country has made extensive changes to its laws and regulations to harmonize with EU practices, all to avoid distortions in, or impediments to the efficient mobilization and allocation of investment.  EU institutions are publicly committed to transparent regulatory processes. The European Commission has the sole right of initiative for EU regulations and publishes extensive, descriptive information on many of its activities.  More information can be found at: http://ec.europa.eu/atwork/decision-making/index_en.htm ; http://ec.europa.eu/smart-regulation/index_en.htm .

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations.  Nongovernmental organizations and private sector associations may submit comments to government draft bills. The submitted comments are made public in the public consultation process.

Rule-making and regulatory authority on a national level exists formally in the legislative branch, the Riksdag.  As a member of the EU, a growing proportion of legislation and regulation stem from the EU. These laws apply in some case directly as national law, or are put before the Riksdag to be enacted as national law.  The executive branch, the Government of Sweden, and its various agencies draft laws and regulations that are put before the Riksdag and are adopted on a national level when they enter into force. Municipalities may draft regulations that are within their spheres of competence.  These regulations apply at the respective municipality only and may vary between municipalities.

Draft bills and regulations, which include investment laws, are made available for public comment through a public consultation process, along the lines of U.S. federal notice and comment procedures.  Current and newly adopted legislation can be found at the Swedish Parliament’s homepage and in the various government agencies dealing with the relevant regulation:http://www.riksdagen.se/sv/dokument-lagar/ .  Key regulatory actions are published at Lagrummet: https://lagrummet.se/ .  Lagrummet serves as the official site for information on Swedish legislation and provides information on legislation in the public domain, all statutes currently in force, and information on impending legislation.  “Post och Inrikes Tidningar” serves in certain aspects a similar role as the Federal Register in the U.S., through which public notifications are published. The proclamations of “Post och Inrikes Tidningar” can be found at the Swedish Companies Registration Office (Bolagsverket): https://poit.bolagsverket.se/poit/PublikPoitIn.do .

The judicial branch and various agencies are tasked with regulation oversight and/or regulation enforcement.  The Swedish Parliamentary Ombudsmen, known as the Justitieombuds-männen (JO), are tasked to make sure that public authority complies with the law and follows administrative processes.  They also investigate complaints from the general public.

Regulations are reviewed on the basis of scientific and/or data-driven assessments.  The principle of public access to official documents, offentlighetsprincipen, governs the availability of the results of studies that are conducted by government entities and furthermore to comments made by government entities.  The principle provides the Swedish public with the right to study public documents as specified in the Freedom of the Press Act.

The status of Sweden’s public finances is available at Statistics Sweden, Sweden official statistics agency: https://www.scb.se/en/finding-statistics/statistics-by-subject-area/public-finances/ .

The status of Sweden’s national debt is available at the Swedish National Debt Office: https://www.riksgalden.se/en/aboutsndo/Central-government-debt-and-finances/Debt_facts/ .

**International Regulatory Considerations**

As an EU-member, Sweden complies with EU legislation in shaping its national regulations. 

If a national law, norm, or standard is found to be in conflict with EU-law, then the national law is altered to be in compliance with EU-law.  Sweden adheres to the practices of WTO and coordinates its actions in regards to WTO with other EU-member countries as the EU-countries have a common trade policy. 

**Legal System and Judicial Independence**

Sweden’s legal system is based on the civil law tradition, common to Europe, and founded on classical Roman law, but has been further influenced by the German interpretation of this tradition.  Swedish legislation and Swedish agencies provide guidance on if regulations or enforcement actions are appealable and adjudicated in the national court system.  Swedish courts are independent and free of influence from other branches of government, including the executive. Sweden has a written commercial law and contractual law and there are specialized courts, such as commercial and civil courts.  The Swedish courts are divided into:

- Courts of general jurisdiction (the District Courts, the Courts of Appeal, and the Supreme Court) which has jurisdiction with respect to civil and criminal cases;
- Administrative courts (County Administrative Courts, Administrative Courts of Appeal, and the Supreme Administrative Court) with jurisdiction with respect to issues of public law, including taxation;
- Specialist courts for disputes within certain legal areas such as labor law, environmental law and market regulation.

Sweden is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Law; foreign awards may be enforced in Sweden regardless of which foreign country the arbitral proceedings took place.  The main source of arbitration law in Sweden is the Swedish Arbitration Act, which contains both procedural and substantive regulations. Sweden is a party to the Lugano and the Brussels Conventions and by its membership of the EU; Sweden is also bound by the Brussels Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.  An arbitral award is considered final and is not subject to substantive review by Swedish courts. However, arbitral awards may be challenged for reasons set out in the Arbitration Act. An award may, for example, be set aside after a challenge because of procedural errors, which are likely to have had an effect on the outcome.

**Laws and Regulations on Foreign Direct Investment**

During the 1990s, Sweden undertook significant deregulation of its markets.  In a number of areas, including the electricity and telecommunication markets, Sweden has been on the leading edge of reform, resulting in more efficient sectors and lower prices.  Nevertheless, a number of practical impediments to direct investments remain. These include a fairly extensive, though non-discriminatory, system of permits and authorizations needed to engage in many activities and the dominance of a few very large players in certain sectors, such as construction and food wholesaling.  Foreign banks, insurance companies, brokerage firms, and cooperative mortgage institutions are permitted to establish branches in Sweden on equal terms with domestic firms, although a permit is required. Swedes and foreigners alike may acquire shares in any company listed on NASDAQ OMX.

Sweden’s taxation structure is straightforward and corporate tax levels are low.  In 2013, Sweden lowered its corporate tax from 26.3 percent to 22 percent in nominal terms.  The effective rate can be even lower as companies have the option of making deductible annual appropriations to a tax allocation reserve of up to 25 percent of their pretax profit for the year.  Companies can make pre-tax allocations to untaxed reserves, which are subject to tax only when utilized. Certain amounts of untaxed reserves may be used to cover losses. Due to tax exemptions on capital gains and dividends, as well as other competitive tax rules such as low effective corporate tax rates, deductible interest costs for tax purposes, no withholding tax on interest, no stamp duty or capital duties on share capital, and an extensive double tax treaty network, Sweden is among Europe’s most favorable jurisdictions for holding companies.  Unlisted shares are always tax-exempt, meaning there is no qualification time or minimum holding of votes or capital. Listed shares are exempt if the holding represents at least 10 percent of the voting rights (or is contingent on the holder’s business) and the shares are held for at least one year.

Personal income taxes are among the highest in the world.  Since public finances have improved due to extensive consolidation packages to reduce deficits, the government has been able to reduce the tax pressure as a percentage of GDP: currently it is below 50 percent, for the first time in decades.  One particular focus has been tax reductions to encourage employers to hire the long-term unemployed.

Dividends paid by foreign subsidiaries in Sweden to their parent company are not subject to Swedish taxation.  Dividends distributed to other foreign shareholders are subject to a 30 percent withholding tax under domestic law, unless dividends are exempt or taxed at a lower rate under a tax treaty.  Tax liability may also be eliminated under the EU Parent Subsidiary Directive. Profits of a Swedish branch of a foreign company may be remitted abroad without being subject to any other tax than the regular corporate income tax.  There is no exit taxation and no specific rules regarding taxation of stock options received before a move to Sweden. Instead, cases of double taxation are solved by applying tax treaties and cover not only moves within the EU but all countries, including the United States.

For detailed tax guidance, see the Swedish Tax Administration’s website. 

**Competition and Anti-Trust Laws**

As an EU member, Sweden has altered its legislation to comply with the EU’s competition rules.  The competition rules are contained in the Swedish Competition Act (2008:579), which entered into force in November 2008.  The fundamental antitrust provisions have been the same since 1993. The Swedish Competition Authority (SCA) is the main enforcement authority of the Swedish Competition Act.

**Expropriation and Compensation**

Private property is only expropriated for public purposes, in a non-discriminatory manner, with fair compensation, and in accordance with established principles of international law.

**Dispute Settlement**

*ICSID Convention and New York Convention*

Sweden is a member of the World Bank-based International Center for the Settlement of Investment Disputes (ICSID) and includes ICSID arbitration of investment disputes in many of its bilateral investment treaties (BITs).  Sweden is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Law. 

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) is one of the world’s leading centers for adjudicating investor-State dispute claims. https://sccinstitute.com/dispute-resolution/investment-disputes/   The SCC has administered arbitrations under the UNCITRAL Arbitration Rules for many years, usually acting as the Appointing Authority.  Parties to a dispute may adopt the Procedures by agreement before or after the dispute has arisen. The SCC maintains different versions of the Procedures depending on which version of the UNCITRAL Arbitration Rules applies to the arbitration agreement in question (1976 or 2010 versions).

*Investor-State Dispute Settlement*

There have been no publicly disclosed investment disputes in Sweden in recent memory.  There is no history of extrajudicial action against foreign investors.

*International Commercial Arbitration and Foreign Courts*

Swedish arbitration law is advanced and in line with current best practice of international arbitration.  The main source of arbitration law in Sweden is the Swedish Arbitration Act, which contains both procedural and substantive regulations.

Sweden is a party to the Lugano and the Brussels Conventions and by its membership of the EU Sweden is bound by the Brussels Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.  An arbitral award is considered final and is not subject to substantive review by Swedish courts. However, arbitral awards may be challenged for reasons set out in the Arbitration Act. An award may, for example, be set aside after challenge because of procedural errors, which are likely to have had an effect on the outcome. 

**Bankruptcy Regulations**

The Swedish legislation on bankruptcy is found in a number of laws that came into force in different periods of time and to serve different purposes.  The main laws on insolvency are the Bankruptcy Act (1987:672) and the Company Reorganization Act (1996:764), but the Preferential Rights of Creditors Act (1970:979), the Salary Guarantee Act (1992:497), and the Companies Act (1975:1385) are equally important.  In 2010, Sweden strengthened its secured transactions system through changes to the Rights of Priority Act that give secured creditors’ claims priority in cases of debtor default outside bankruptcy. According to data collected by the World Bank’s 2019 Doing Business Report, resolving insolvency takes two years on average and costs nine percent of the debtor’s estate, with the most likely outcome being that the company will be sold as a going concern.  The average recovery rate is 78 cents on the dollar. Globally, Sweden ranked 17 of 190 economies on the ease of resolving insolvency in the Doing Business 2019 report. 

							4. Industrial Policies					

**Investment Incentives**

The Swedish government offers certain incentives to set up a business in targeted depressed areas.  Loans are available on favorable terms from the Swedish Agency for Economic and Regional Growth (Tillväxtverket) and from regional development funds.  A range of regional support programs, including location and employment grants, low rent industrial parks, and economic free zones are available. Regional development support is concentrated in the lightly populated northern two-thirds of the country.  In addition, EU grant and subsidy programs are generally available only for nationals and companies registered in the EU, usually on a national treatment basis. For more information, see Chapter 7 “Trade and Project Financing” in Country Commercial Guide for Sweden.  The Swedish government does not have a practice of issuing guarantees or jointly financing direct investment projects. 

**Foreign Trade Zones/Free Ports/Trade Facilitation**

Sweden has foreign trade zones with bonded warehouses in the ports of Stockholm, Gothenburg, Malmö, and Jönköping.  Goods may be stored indefinitely in these zones without customs clearance, but they may not be consumed or sold on a retail basis.  Permission may be granted to use these goods as materials for industrial operations within a free trade zone. The same tax and labor laws apply to foreign trade zones as to other workplaces in Sweden.

**Performance and Data Localization Requirements**

As an EU Member State, Sweden adheres to the EU’s General Data Protection Directive (GDPR) (95/46/EC) which spells out strict rules concerning the processing of personal data.  Businesses must tell consumers that they are collecting data, what they intend to use it for, and to whom it will be disclosed. Data subjects must be given the opportunity to object to the processing of their personal details and to opt-out of having them used for direct marketing purposes.  This opt-out should be available at the time of collection and at any point thereafter. While the EU institutions are considering new legislation, the 1995 Directive remains in force.

The EU-U.S. Privacy Shield Frameworks were designed by the U.S. Department of Commerce and the European Commission to provide companies on both sides of the Atlantic with a mechanism to comply with data protection requirements when transferring personal data from the European Union to the United States in support of transatlantic commerce.  On July 12, 2016, the European Commission deemed the EU-U.S. Privacy Shield Framework adequate to enable data transfers under EU law. For further information and guidance on the Privacy Shield Framework, please see: https://www.commerce.gov/privacyshield .

The Swedish Data Protection Authority, Datainspektionen, works to prevent encroachment upon privacy through information and by issuing directives and codes of statutes.  Datainspektionen also handles complaints and carries out inspections. By examining government bills, the DPA ensures that new laws and ordinances protect personal data in an adequate manner.  Further guidance and information is available in English on their website at www.datainspektionen.se .

There are no measurements that prevent or unduly impede companies from freely transmitting customer or other business-related data outside Sweden’s territory.  Sweden imposes no performance requirements on presumptive foreign investors.

In general, there is no government policy that requires the hiring of nationals.  There are no excessively onerous visa, residence, work permit, or similar requirements inhibiting mobility of foreign investors and their employees.  Sweden does not follow “forced localization,” the policy in which foreign investors must use domestic content in goods or technology and there are no requirements for foreign IT providers to turn over source code and/or provide access to encryption.

							5. Protection of Property Rights					

**Real Property**

Swedish law generally provides for adequate protection of real property.  Mortgages and liens exist and the recording system is reliable. Almost all land has clear title and unoccupied property ownership cannot revert to other owners.  Financial mechanisms are available in Sweden for securitization of properties for lending purposes and have been in use since the early 1990s. Nordic banks account for the vast majority of secured lending transactions.  The Swedish Financial Supervisory Authority, Finansinpektionen, can provide further information regarding the regulations involved with securitization of properties at https://www.fi.se/en/ .

**Intellectual Property Rights**

Swedish law generally provides adequate protection of all property rights, including intellectual property and real property.  As an EU member, Sweden adheres to a series of multilateral conventions on industrial, intellectual, and commercial property.

Patents:  Protection in all areas of technology last for 20 years.  Sweden is a party to the Patent Cooperation Treaty and the European Patent Convention of 1973; both entered into force in 1978.

Copyrights:  Sweden is a signatory to various multilateral conventions on the protection of copyrights, including the Berne Convention of 1971, the Rome Convention of 1961, and the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  Swedish copyright law protects computer programs and databases. More recently, Sweden gained notoriety as a safe haven for internet piracy, due to rapid internet connection speeds, a lag in implementing EU Directives, and weak enforcement efforts. In 2009, however, Sweden implemented the EU’s Intellectual Property Rights Enforcement Directive (IPRED) 2004/48/EC, and continued to step up its enforcement against internet piracy.  The last few years also saw the conviction of the operators behind the Pirate Bay.org, a notorious BitTorrent tracker for illegal file sharing, and an increase in legal file sharing. Legislative measures, combined with added resources on the enforcement side and the emergence of successful legal alternatives all contributed to a substantial increase for music and film distribution using legal means since 2010. Sweden has a Specialist Court for IPR-related cases, which will further increase efficiency by pooling specialist competence.  The IP Court, the so-called Patent and Market Court, started operations on September 1, 2016. Stream-ripping, the unauthorized converting of a file from a licensed streaming site into an unauthorized copy, is now a dominant method of music piracy, and is reportedly popular in Sweden.

Trademarks:  Sweden protects trademarks under a specific trademark act (1960:644) and is a signatory to the 1989 Madrid Protocol.

Trade secrets:  Sweden’s patent and copyright laws protect proprietary information unless said information is acquired by a government ministry or authority, in which case it may be made available to the public on demand.

Designs:  Sweden is a party to the Paris Convention and the Locarno Agreement. Designs are also protected by the Swedish Design Protection Act and the Council Regulation on Registered and Unregistered Designs.  Protection under the act lasts for renewable terms of one- or five-year periods with a maximum protection of 25 years.

Sweden is not listed in the United States Trade Representative (USTR) Special 301 Report.  For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en 

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

Credit is allocated on market terms and is made available to foreign investors in a non-discriminatory fashion.  The private sector has access to a variety of credit instruments. Legal, regulatory, and accounting systems are transparent and consistent with international norms.  NASDAQ-OMX is a modern, open, and active forum for domestic and foreign portfolio investment. It is Sweden’s official stock exchange and operates under specific legislation.  Furthermore, the Swedish government is neutral toward portfolio investment and Sweden has a fully capable regulatory system that encourages and facilitates portfolio investments.

**Money and Banking System**

Several foreign banks, including Citibank, have established branch offices in Sweden, and several niche banks have started to compete in the retail bank market.  The three largest Swedish banks are Skandinaviska Enskilda Banken (SEB), Svenska Handelsbanken, and Swedbank. Nordea is the largest foreign bank and largest bank in Sweden, while Danske Bank is the second largest foreign bank and the fifth largest bank in Sweden.  A deposit insurance system was introduced in 1996, whereby individuals received protection of up to SEK 250,000 (USD 38,285) of their deposits in case of bank insolvency. On December 31, 2010, the maximum compensation was raised to the SEK equivalent of 100,000 euro.

The banks’ activities are supervised by the Swedish Financial Supervisory Authority, Finansinspektionen, http://www.fi.se, to ensure that standards are met.  Swedish banks’ financial statements meet international standards and are audited by internationally-recognized auditors only.  The Swedish Bankers’ Association, http://www.bankforeningen.se , represents banks and financial institutions in Sweden.  The association works closely with regulators and policy makers in Sweden and Europe.  Sweden is not part of the Eurozone; however, Swedish commercial banks offer euro-denominated accounts and payment services.

In 2014 Sweden signed the Foreign Account Tax Compliance Act (FATCA) agreement with the United States to counter tax evasion and fraud.  Financial institutions in Sweden are now obligated to submit information on American citizen account holders to the Swedish Tax Agency, which relays this to the U.S. Internal Revenue Service (IRS).  In 2015 the Swedish Parliament passed new laws and regulations associated with FATCA implemention: 

- a new law on the identification of reportable accounts with respect to FATCA;
- changes to tax procedure act;
- new legislation on the exchange of information with respect to the agreement; and
- consequential amendments to the Income Tax Act and other laws.

For full text of Bill 2014/15:41, please see http://www.regeringen.se/contentassets/bd8cf7f897364944b35f5f30c099bc0c/genomforande-av-avtal-mellan-sveriges-regering-och-amerikas-forenta-staters-regering-for-att-forbattra-internationell-efterlevnad-av-skatteregler-och-for-att-genomfora-fatca-prop.-20141541> .

Foreign banks or branches offering financial services must have an authorization from the Swedish Financial Supervisory Authority, Finansinpektionen, to conduct operations.  As part of the authorization application process, FI reviews the firm’s capital situation, business plan, owners, and management.  Parts of the firm’s daily operations may also require authorization from FI. The applicable regulatory code can be found at http://www.fi.se/en/our-registers/search-fffs/2009/20093/ .

There are no reported losses of correspondent banking relationships in the past three years and there are no current correspondent banking relationships that are in jeopardy. Foreigners have the right to open an account in a bank in Sweden provided he/she can identify him/herself and the bank conducts an identity check.  The bank cannot require the person to have a Swedish personal identity number or an address in Sweden.

**Foreign Exchange and Remittances**

*Foreign Exchange*

Sweden adheres to a floating exchange rate regime and the national currency (Swedish Krona) rate fluctuates.

*Remittance Policies*

Sweden does not impose any restrictions on remittances of profits, proceeds from the liquidation of an investment, or royalty and license fee payments.  A subsidiary or branch may transfer fees to a parent company outside of Sweden for management services, research expenditures, etc. Funds associated with any form of investment can be freely converted into any world currency.  In general, yields on invested funds, such as dividends and interest receipts, may be freely transferred. A foreign-owned firm may also raise foreign currency loans both from its parent corporation and credit institutions abroad.  There are no recent changes or plans to change investment remittance policies. There are no time limitations on remittances.

**Sovereign Wealth Funds**

There is no sovereign wealth fund in Sweden.

							7. State-Owned Enterprises					

The Swedish state is Sweden’s largest corporate owner and employer.  Forty-seven companies are entirely or partially state-owned and have government representatives on their boards.  Approximately 135,000 people are employed by these companies, including associated companies. Specific sectors which feature State-Owned Enterprises (SOEs), include energy/power generation, forestry, mining, finance, telecom, postal services, gambling, and retail liquor sales.  These companies operate under the same laws as private companies, although the government appoints board members, reflecting government ownership. Like private companies, SOEs have appointed boards of directors, and the government is constitutionally prevented from direct involvement in the company’s operations.  Like private companies, SOEs publish their annual reports, which are subject to independent audit. Private enterprises compete with public enterprises under the same terms and conditions with respect to access to markets, credit, and other business operations. Moreover, Sweden is party to the General Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO).  Swedish SOEs adhere to the OECD Guidelines on Corporate Governance for SOEs.

Further information regarding the Swedish SOEs can be found here: http://www.regeringen.se/regeringens-politik/bolag-med-statligt-agande/ .

**Privatization Program**

The Swedish center-left Government, voted into office in September 2014, has the mandate to divest or liquidate its holdings in Bilprovningen (Swedish Motor-Vehicle Inspection Company), Bostadsgaranti, Lernia, Orio (formerly Saab Automobile Parts), SAS, and Svensk Exportkredit (SEK).  Although there are no indications that the current Government has immediate plans to execute this mandate, it nonetheless decided in 2016 to let Vattenfall divest its German lignite operations to the Czech energy group EPH and their funding partners PPF Investments. The sale was made to adapt Vattenfall’s portfolio and to complete the transition to a carbon neutral operation.  If the Government of Sweden decides to divest or liquidate holdings, it does so through a public bidding process.

							8. Responsible Business Conduct					

There is widespread awareness of responsible business conduct (RBC) among both producers and consumers in Sweden.  All businesses are expected to comply with local laws and regulations, and to observe the international norms and principles for human rights, labor protection, sustainable development, and anti-corruption.  Firms that pursue RBC are viewed favorably, often publicizing their adherence to generally accepted RBC principles such as those contained in OECD Guidelines for Multinational Enterprises. Volvo Trucks, for example, has collaborated with USAID in pursuing RBC efforts outside of Sweden.  The Swedish National Contact Point for the OECD Guidelines can be found at: https://www.regeringen.se/regeringens-politik/handel-och-investeringsframjande/nationella-kontaktpunkten/ .

Sweden effectively and fairly enforces domestic laws in relation to human rights, labor rights, consumer protection, environmental protections, and other laws/regulations intended to protect individuals from adverse business impacts.  Sweden has put in place corporate governance, accounting, and executive compensation standards to protect shareholders. Sweden is a member of the Extractive Industries Transparency Initiative (EITI). The former prime minister of Sweden, Fredrik Reinfeldt, is the current Chair of EITI.

							9. Corruption					

Investors have an extremely low likelihood of encountering corruption in Sweden.  While there have been cases of domestic corruption at the municipal level, most companies have high anti-corruption standards and an investor would not typically be put in the position of having to pay a bribe to conduct business.

There are cases of Swedish companies operating overseas that have been charged with bribing foreign officials; however, these cases are relatively rare.  Although Sweden has comprehensive laws against corruption, and ratified the 1997 OECD Anti-bribery Convention, in 2012, the OECD Anti-Bribery Working Group has given an unfavorable review of Swedish compliance with that Convention.  The group faulted Sweden for not having a single conviction of a Swedish company for bribery in the last eight years, for having unreasonably low fines, and for not re-framing their legal system so that a corporation could be charged with a crime.  Swedish officials object to the review, claiming that lack of convictions is no proof of prosecutorial indifference, but rather indicative of high standards of ethics in Swedish companies. Over the last four years, a high-profile case involving telecom giant Telia Company’s operations in Uzbekistan has received considerable public attention and cost the CEO and other senior officials their jobs.  Telia Company was in the process of divesting its operations in Uzbekistan following a probe by the U.S. Department of Justice pertaining to illegal payments. In September 2017, Telia Company reached an agreement to pay USD 965.8 million to settle U.S. and European criminal and civil charges that the company had paid bribes to win business in Uzbekistan.

Sweden does not have a specific agency devoted exclusively to anti-corruption but a number of agencies cooperate together.  A list of Sweden’s Public and Private Anti-Corruption Initiatives can be found at http://www.business-anti-corruption.com/country-profiles/europe-central-asia/sweden/initiatives.aspx .

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Sweden has signed and ratified the UN Anticorruption Convention (see list of signatories at http://www.unodc.org/unodc/en/treaties/CAC/signatories.html ).

Sweden is party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (see list of signatories and their implementation reports at http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm ).

*Resources to Report Corruption*

The National Corruption Group at the Swedish Police, Nationella Korruptionsgruppen, handles the investigation of corruption offences and is engaged in preventive efforts.  Corruption claims can be reported to the Group by calling +46 114 14. 

*Watchdog organization:*

Transparency International SwedenTelephone: + 46 (0)8 791 40 40E-mail address: info@transparency-se.orgwww.transparency-se.org/In-English.html 

							10. Political and Security Environment					

Sweden is politically stable and no changes are expected.

							11. Labor Policies and Practices					

Sweden’s labor force of 5.1 million is disciplined, well educated, and highly skilled.  Approximately 68 percent of the Swedish labor force is unionized, although membership is declining.  Swedish unions have helped to implement business restructuring to remain competitive, and strongly favor employee education and technical advancements.  Management labor cooperation is generally excellent and non-confrontational. The National Mediation Office, which mediates in labor disputes in Sweden, reported in its summary for 2018 that not a single working day was lost through strikes or lockouts in the course of central negotiations.

Foreign/migrant workers are covered by Swedish and EU labor laws.  Labor laws are not waived in order to attract or retain investment.  In general, there is no government policy that requires the hiring of nationals.

Sweden has a Co-determination at Work Act, which provides for labor representation on the boards of corporate directors once a company has reached more than 25 employees.  This law also requires management to negotiate with the appropriate union, or unions prior to implementing certain major changes in company activities. It calls for a company to furnish information on many aspects of its economic status to labor representatives.  Labor and management usually find this system works to their mutual benefit. The Co-determination at Work Act and Employment Protection Act sets the rules for the adjustment employment to respond to fluctuating market conditions. Severances and layoffs are based on seniority and are conducted in consultation with unions.  Unemployment insurance and other social safety net programs are available for workers laid off for economic reasons. Government-sponsored training programs to facilitate the transition for unemployed persons into areas reporting labor shortages are available, but their scope is targeted.

The cost of doing business in Sweden is generally comparable to most OECD countries, though some country-specific cost advantages are present.  Overall salary costs have become increasingly competitive due to relatively modest wage increases over the last decade and a favorable exchange rate.  This development is even more pronounced for highly qualified personnel and researchers.

There is no fixed minimum wage by legislation.  Instead, wages are set by collective bargaining by sector.  The traditionally low-wage differential has increased in recent years as a result of increased wage setting flexibility at the company level.  Still, Swedish unskilled employees are relatively well paid, while well-educated Swedish employees are low-paid compared to those in competitor countries.  The average increases in real wages in recent years have been high by historical standards, in large due to price stability. Even so, nominal wages in recent years have been slightly above those in competitor countries, about 3 percent annually.  Employers must pay social security fees of about 31.5 percent. The fee consists of statutory contributions for pensions, health insurance, and other social benefits.

Sweden has ratified most International Labor Organization (ILO) conventions dealing with worker’s rights, freedom of association, collective bargaining, and the major working conditions and occupational safety and health conventions.  More information on Sweden’s labor agreements and legislation in English can be found on the Swedish Trade Union Confederation’s website at http://www.lo.se/english/startpage .  There are no new labor related laws or regulations enacted during the last year, as well as any pending draft bills.

							12. OPIC and Other Investment Insurance Programs					

The Overseas Private Investment Corporation, OPIC, does not operate in Sweden.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

*Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy*