How to Register a Sole Proprietorship (Enskild Firma) in Sweden

Starting as a sole proprietor in Sweden, known as an enskild firma, is appealing because it’s simple, low cost, and offers flexibility. You can run a business under your own name, make your own decisions, and generally manage your operations with relatively little overhead.

While many administrative tasks are streamlined, there are some formalities to meet: tax registration, deciding whether VAT applies, and understanding social security contributions. These can be confusing to navigate if you’re new to Swedish systems or moving from abroad.

The main challenges are estimating profits accurately (so your preliminary tax payments are correct), staying under VAT thresholds (or handling VAT properly if you exceed them), and keeping good records. The benefits include fast setup, no minimum capital requirement, and full control over your business.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Sweden?

In Sweden, a sole proprietorship is called enskild firma (sole trader). It is also sometimes referred to as enskild näringsidkare, which translates to “individual business operator”. It is a business owned and run by one person. You are not a separate legal entity, so you are personally liable for all business debts and obligations.

How does a sole proprietorship (enskild firma) work in Sweden?

Enskild firma vs other business structures in Sweden

Step-by-step guide: How to register a sole proprietorship in Sweden

Step 1: Check eligibility

You must be at least 16 years old (minors need guardian consent), not been declared personally bankrupt, and not been convicted of any business-related crimes. You’ll also need a Swedish personal identity number (personnummer) or a coordination number (samordningsnummer).

Foreign nationals will also need a valid residence permit that allows for self-employment in Sweden.

Step 2: Choose your business name

You may simply use your legal name. If you want a trade name, you can register it, but protection of that name requires registering with Bolagsverket, which includes a fee of SEK 1,800. You must ensure your business name isn’t misleading.

Step 3: Gather required documents

You’ll typically need:

• Valid ID or passport
• Residence and work permit
• Swedish personal identification number (personnummer) or coordination number
• Business address in Sweden
• Business licenses (if necessary)
• Description of your business activities

Step 4: Register with authorities

Register via Verksamt to obtain F-tax (if you’ll be self-employed without other employment) or FA-tax (if you have both self-employment and employment). Register for VAT if needed, and register as an employer if you plan to hire employees in Sweden.

Step 5: Pay fees and contributions

There is generally no fee to open an enskild firma. If you register a trade name or protect a name, there is a registration fee via Bolagsverket. You will begin paying preliminary tax and social contributions once operations begin.

Step 6: Complete post-registration obligations

After registration, you must file a preliminary income tax return (preliminary tax) before or in early stages of operations with an estimate of profit. Your monthly tax payments will be based on this estimated profit.

Maintain business accounting and collect reports. At year-end, file the NE annex (NE-bilaga) together with your personal return. The NE annex is used to report a sole proprietorship’s business activities to the Swedish Tax Agency (Skatteverket). Additionally, file VAT returns as required. Be sure to keep invoices, receipts, SNI codes, etc.

Financial and tax obligations for sole proprietors in Sweden

Income tax & F-tax / FA-tax: You pay personal income tax on your business surplus (profits). You must apply for F-tax if your income will be entirely from self-employed activity. If you also have employment income, you may use FA-tax. Preliminary tax is paid regularly (often monthly) based on expected profit.

Social security contributions: As a self-employed person, you must pay your own social security contributions (to cover things like old-age pension, health insurance, and occupational injury) through Skatteverket and relevant agencies. These are calculated based on your profit.

VAT: VAT registration is required if your turnover exceeds SEK 120,000 per year. If under the threshold, you may be exempt and not charged VAT, but in this case, you cannot reclaim VAT on business expenses. Standard VAT rate is 25%, with reduced rates of 12% or 6% for certain goods and services. Submit VAT returns via Skatteverket.

Recordkeeping and accounting: Keep track of revenues, expenses, and business documents. At year-end, you file the NE-bilaga (annex) with your income declaration. If your annual turnover is less than or equal to SEK 3 million, you may use “simplified annual accounts” (“förenklat årsbokslut”). Accounting records must be stored for at least seven years.

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