Sweden is a Scandinavian nation made up of thousands of coastal islands. Bordering Norway and Finland and connected to Denmark via a bridge-tunnel, this is the largest country in Northern Europe, and the third-largest country in the European Union.
Sweden became known to the rest of the world through the Vikings, who began to raid much of northern Europe in the 9th century. In the 17th century, Sweden reached the peak of its power, controlling areas of Denmark, Finland, Russia and northern Germany. During World War I, the Swedish economy picked up and also managed to maintain its status during World War II.
Sweden has a population of 10.3 million (with 2.6 million of those having a foreign background). While Swedish is the official language, there are a number of regional dialects spoken across the country. A large percentage of the population speaks English as a second language.
Despite its high latitude, the country boasts a relatively mild climate, though winters are typically cold and snowy. Sweden attracts thousands of tourists each year to view the famous Northern Lights, sample Swedish chocolate and explore the country’s beautiful landscapes.
Sweden was one of the first countries in the world to pass the Environmental Protection Act. It takes pollution very seriously and the cities pride themselves on their clean air. Sweden’s capital, Stockholm, was declared the European Green Capital in 2010, and maintains this title to this day. The city also intends to be fossil fuel free by 2050, and aims to achieve this goal by increasing biodiversity and introducing changes to public transport and waste disposal.
Sweden joined the European Union in 1995, but continues to use the Swedish krona as its currency. It is considered a fantastic place to work and in 2017 it secured the top spot on Forbes’ list of the best countries for business. It adopts an innovative working environment, and has a growing economy with tech at its heart.
Reputed as one of the world’s most stunning countries, it’s no surprise that many people want to visit the country. But Sweden is also incredibly popular on a professional level, with many freelancers and contractors capitalising on some superb employment opportunities.
EU citizens and citizens of Nordic countries need not apply for a work permit. However, they must register with the Swedish Tax Agency, Skatteverket, in order to gain a Swedish personal identity number. Citizens of Switzerland need a residence permit to work in Sweden for longer than three months, and they can apply for this after entering Sweden. Citizens of non-EU countries must apply for a work permit to work in Sweden, which must be done before entering the country. You can submit your application online or with your closest Swedish embassy or consulate.
While the majority of non-EU citizens must apply for a work permit, there are a few exceptions to the rule. Citizens of Argentina, Australia, Chile, Canada, Hong Kong, New Zealand, South Korea and Uruguay aged 18–30 can apply for a working holiday visa for up to one year.
When you first register with Sweden’s tax agency, Skatteverket, you will be assigned a Swedish tax registration number. Swedish income tax is incredibly stringent and Skatteverket works hard to combat international tax evasion. If you are a contractor currently operating in Sweden, you must ensure your finances are in order otherwise you will face strict penalties.
You can deduct a basic allowance of between SEK 13,700 and SEK 35,900 on taxable earned income (employment and business activity) if you have unlimited tax liability for the entire year.
After the basic deduction, the following taxes apply:
- Approx. 29-34% municipal tax
- Approx. 1-2% church tax
State income is 20% of the part of your taxable earned income that exceeds SEK 509,300 (2019 SEK 490,700).
Expats with a Swedish contractor can potentially benefit from tax relief. That being said, there are a number of criteria that must be met before they can be considered for this rate, including a minimum rate of pay. In 2019, this figure was SEK 89,600 per month, after social security payments.
Contractors working in Sweden who do not fit these criteria can potentially gain tax relief if they are considered specialist or key personnel, including researchers, scientists, technicians or other skilled professionals considered difficult to recruit for in Sweden.
Self-employed individuals working in Sweden must apply for an F-skattsedel tax certificate. This signifies that you are liable for paying your social security contributions each month.
Social security payments in Sweden are calculated on your net income. Self-employed persons pay contributions equivalent to 28.97% of their income. These contributions can be slightly decreased if they accept a longer waiting period for sickness insurance. For people born between 1938 and 1954, the contributions are 10.21%.
That being said, if you pay social security in another country, you do not have to pay any self-employed social security payments in Sweden. A certificate must be presented in order to prove you are covered by national insurance in your native country.
The regulations governing social insurance may vary depending on your country of origin; therefore it is best to contact the social insurance authority of the country where you live for more information. Alternatively, speak with a consultant at Chesterfield for the latest regulations and fees.
It is worth noting that there is a major shortage of qualified specialist workers in Sweden, especially civil engineers, technicians, doctors and nurses. When self-employed professionals register with Skatteverket, they are assigned a Swedish personal identity number and Swedish tax registration number, demonstrating their eligibility to live and work in the country. The Swedish Public Employment Agency offers support for internationals seeking to work in Sweden.
Employment conditions in Sweden are regulated by the Employment Protection Act. Sweden has strict employment legislation and while the country hosts numerous opportunities for contractors, there are legislative changes that professionals need to be aware of, especially when it comes to employment legislation.
With the support of a professional firm such as Chesterfield, we will be able to assist you with the stringent tax rules that apply in order to facilitate the process of Swedish contracting under the country’s self-employed rules.
Sweden is very stringent when it comes to opening a bank account. Opening an account online is highly limited due to anti-terrorism and anti-money laundering policies.
Non-residents must visit a bank in person in order to open a bank account. The most popular Swedish banks are Nordea Bank, SEB and Handelsbanken. With 89% of the population speaking English, there’s no need to worry about language barriers when opening a bank account in Sweden. Many banks offer host interpreters for those who do not speak English. However, Sweden is preparing to become a cashless society, and as such it’s important to open an account as soon as possible once you arrive in the country.
You will only be able to open a Swedish bank account once you have your Swedish ID number, which you must obtain from Skatteverket. You will then need to present your Swedish proof of address, a valid passport and your residence permit.
Working as a contractor in Sweden is certainly possible, and the country is reputed for its communal work environment, competitive salaries and emphasis on innovation. IT contractors in particular are highly welcome, and at Chesterfield, we offer Swedish self-employed services and Swedish payroll services. We also assist with the registration and criteria requirements through our local accountant.
Chesterfield & Contracting in Sweden
Sweden is an attractive location for freelancers and contractors; however there are a number of admin, tax and immigration processes you must correctly complete in order to successfully facilitate your transition into the country. Chesterfield has a great deal of experience working with freelancers and contractors in Sweden, and offers unparalleled Swedish employed solutions and Swedish freelancer services. Our available schemes and structures are designed to make the process of contracting in Sweden as easy and stress-free as possible. This will enable you to focus on your work and comply with all Swedish laws and regulations.