Sole trader or limited company in Sweden 2026: tax, liability, cost
A Swedish limited company (aktiebolag) pays 20.6% corporate tax, its dividends are taxed at 20% within the allowance, and your private money is not at risk. In a sole trader business (enskild firma) the whole profit is your income, with 28.97% self-employed contributions. Compared, with a worked example.
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In Sweden a limited company (aktiebolag, AB) pays 20.6% corporate tax on its profit, and the dividend you take out is taxed at 20% as long as it stays within the dividend allowance (gränsbelopp; at least SEK 322,400 for 2026 under the new 3:12 rules). In a sole trader business (enskild firma) the whole profit is your own income: you pay self-employed contributions (egenavgifter) of 28.97% plus ordinary income tax, and you are personally liable for the business's debts.
Legal position on 11 November 2026
An aktiebolag is a legal person of its own: shareholders are not personally liable for the company's obligations (chapter 1, section 3 of the Swedish Companies Act, aktiebolagslagen, ABL). An enskild firma (enskild näringsverksamhet) is you: sole traders are personally liable for the business's debts (Skatteverket, the Swedish Tax Agency). The new 3:12 dividend rules are law (SFS 2025:1361) and apply from income year 2026.
Sole trader and limited company in one table
| Enskild firma (sole trader) | Aktiebolag (AB, limited company) | |
|---|---|---|
| Legal person | No, it is you | Yes |
| Liability for debts | Personal, with everything you own | The company; shareholders are not personally liable (ch. 1 s. 3 ABL) |
| Capital to start | None required | At least SEK 25,000 share capital (ch. 1 s. 5 ABL) |
| Registration | F-skatt (business tax approval) with Skatteverket via verksamt.se; the business name with Bolagsverket only if you want | Bolagsverket (Companies Registration Office): SEK 2,400 online, SEK 2,700 on paper; then F-skatt |
| Tax on the profit | Business income: egenavgifter 28.97%, municipal tax 32.38% on average, state tax 20% above SEK 643,000 | Corporate tax (bolagsskatt) 20.6% (ch. 65 s. 10 of the Income Tax Act, inkomstskattelagen, IL) |
| Money to you | Private withdrawal (eget uttag), no extra tax (the profit is taxed) | Salary (employer contributions of 31.42% plus income tax) or dividend (20% within the allowance) |
| Keeping profit in the business | Tax-allocation reserve (periodiseringsfond) up to 30%, expansion reserve (expansionsfond, 20.6% tax) | Profit kept in the company: 20.6%; periodiseringsfond up to 25% |
| Year-end accounts | Simplified year-end accounts (förenklat årsbokslut) with net turnover normally up to SEK 3 million | Annual report (årsredovisning) every year, filed with Bolagsverket |
| Auditor | No | Not for small private ABs if the articles of association say so (ch. 9 s. 1 ABL) |
| Tax return | NE appendix (NE-bilaga) to income tax return 1, in May | Income tax return 2 (INK2) for the company, plus your own |
Amounts for income year 2026. Sources: inkomstskattelagen (1999:1229), socialavgiftslagen (2000:980), the General Payroll Tax Act (1994:1920), aktiebolagslagen (2005:551), aktiebolagsförordningen (2005:559), bokföringslagen (1999:1078), Skatteverket and Statistics Sweden (SCB).
Tax for a sole trader
The whole surplus of the business is your business income, however much you take out. Money you move to your private account is a private withdrawal and is not taxed again.
- Egenavgifter (self-employed contributions). 28.97% for 2026 if you are under 67 on 1 January (ch. 3 s. 13 of the Social Contributions Act and s. 3 of the General Payroll Tax Act). In the return you take a flat deduction (schablonavdrag) of up to 25% of the surplus for next year's contributions (ch. 16 s. 29 IL), which is reversed the year after.
- Municipal tax (kommunalskatt). 32.38% on average in 2026 (SCB), from 28.93% in Österåker to 35.65% in Dorotea.
- State income tax. 20% on taxable income above the threshold (skiktgräns) of SEK 643,000 (ch. 65 s. 5 IL). The break-even point (brytpunkt) is SEK 660,400 before the basic allowance if you are under 66.
- Deductions that cut the tax. The basic allowance (grundavdrag) and the earned-income tax credit (jobbskatteavdrag) also apply to profit from an active business (ch. 63 and ch. 67 IL).
To keep profit in the business you may set aside up to 30% to a periodiseringsfond (ch. 30 s. 5 IL), which must be reversed by the sixth year at the latest. An expansionsfond is taxed at 20.6% when you set the money aside, the same level as corporate tax (ch. 34 IL, ch. 65 s. 8 IL).
Tax in a limited company
The company pays 20.6% corporate tax on its profit. Money reaches you as salary or dividend.
- Salary. The company pays employer contributions (arbetsgivaravgifter) of 31.42% on top of the gross salary (Skatteverket, 2026), and you pay ordinary income tax. The salary is a cost for the company.
- Dividend (utdelning). Within the allowance a dividend is taxed at 20% (two thirds are taxed as capital income at 30%, ch. 57 s. 20 IL). Anything above the allowance is taxed as employment income.
- The allowance from 2026. One basic amount (grundbelopp) per person: 4 income base amounts of the previous year, SEK 322,400 for 2026 and SEK 333,600 for 2027. The 4% ownership requirement and the minimum-salary requirement are gone. If the company paid cash salary the year before, a salary-based allowance comes on top (ch. 57 s. 9–17 IL).
The simplification rule (förenklingsregeln) many guides still use no longer exists: dividends received in 2026 already follow the new rules.
Worked example: SEK 400,000 profit in a limited company
You own all the shares in your AB. The company has a profit before tax of SEK 400,000 and you take no salary.
| Step | Amount |
|---|---|
| Profit before tax | SEK 400,000 |
| Corporate tax 20.6% | −SEK 82,400 |
| Left in the company, paid out | SEK 317,600 |
| Tax on the dividend 20% (within the SEK 322,400 basic amount) | −SEK 63,520 |
| Left for you | SEK 254,080 |
| Total tax | SEK 146,920, 36.7% of the profit |
The whole dividend fits within the basic amount for 2026 (SEK 322,400) and for 2027 (SEK 333,600). If you keep the profit in the company instead, the tax stops at the SEK 82,400 corporate tax.
In an enskild firma the same SEK 400,000 becomes your business income. You pay egenavgifter and income tax on it, and Skatteverket works out the exact amount in your final tax statement, after the basic allowance and the earned-income tax credit.
Cost and work every year
- Starting. An aktiebolag needs SEK 25,000 of share capital. The money belongs to the company and may be used in the business. Registration with Bolagsverket costs SEK 2,400 online (ch. 3 s. 1 of the Companies Ordinance). The company must be registered within six months of signing the founding document (ch. 2 s. 22 ABL). A board with fewer than three members needs at least one deputy (ch. 8 s. 3 ABL).
- Bookkeeping. Both must keep books (ch. 2 of the Bookkeeping Act, bokföringslagen). With net turnover normally up to SEK 3 million you may use the cash method (kontantmetoden) (ch. 5 s. 2 of the Bookkeeping Act).
- Year-end accounts. A sole trader with net turnover normally up to SEK 3 million may prepare simplified year-end accounts (ch. 6 s. 3 of the Bookkeeping Act). An aktiebolag prepares an annual report every year. If it has not reached Bolagsverket within seven months of the year end, a late fee of SEK 7,500 follows (ch. 8 s. 6 of the Annual Accounts Act, årsredovisningslagen).
- Auditor. A private aktiebolag needs no auditor if its articles of association say so and it does not meet more than one of these conditions in each of the last two financial years: more than 3 employees, a balance sheet total above SEK 1.5 million, net turnover above SEK 3 million (ch. 9 s. 1 ABL).
- Tax return. Enskild firma: the NE appendix with your income tax return 1, for income year 2025 by 4 May 2026. Aktiebolag with a calendar year: income tax return 2 for 2026, filed digitally, by 2 August 2027 according to Skatteverket.
Liability: what you risk privately
In an enskild firma you and the business are the same person. If a deal goes wrong, you answer for the business's debts with your private assets.
In an aktiebolag the company answers. Two exceptions matter to you as a board member: you become personally liable for the company's unpaid taxes and fees if you intentionally or through gross negligence did not pay them (representative liability, ch. 59 s. 13 of the Tax Procedure Act, skatteförfarandelagen), and the board becomes jointly liable for new debts if the annual report has not reached Bolagsverket within 15 months (ch. 8 s. 12 of the Annual Accounts Act).
How to choose
- Start with the profit you expect. If you need to take out nearly everything to live on, an enskild firma is simple and cheap. If money is left over that can stay in the business, an aktiebolag taxes it at 20.6%.
- Weigh the risk. Large contracts, agreements with warranties, employees or loans point to an aktiebolag.
- Count the work. An aktiebolag needs an annual report, a board and a general meeting within six months of the year end (ch. 7 s. 10 ABL).
If you already have a job, you can run an enskild firma on the side with FA-skatt: your employer withholds tax from your salary and the business pays its own preliminary tax (ch. 9 s. 2 of the Tax Procedure Act).
Differences from Germany
If you come from Germany: a Swedish aktiebolag needs SEK 25,000 of share capital, not €25,000 like a GmbH. Sweden has no trade tax (Gewerbesteuer) and no trade registration (Gewerbeanmeldung): you register with Skatteverket for F-skatt. Just like a German sole trader (Einzelunternehmer), a Swedish sole trader is personally liable.
Norman in Sweden
Norman is an AI bookkeeping app for the self-employed and small companies: bookkeeping, invoicing and taxes in one app. You review and approve. Norman is live in Germany and Poland today. For Sweden, Norman is in preparation. Until then, you find free guides and tools for businesses in Sweden here on norman.finance/se.
Frequently asked questions
When does a sole trader business make sense in Sweden?
When the profit is small enough that you take out nearly all of it to live on, and the risk is low. You avoid share capital, an annual report and a general meeting, and simplified year-end accounts are enough up to net turnover of normally SEK 3 million.
What is the downside of an enskild firma?
You are personally liable for the business's debts with everything you own. And the whole profit is taxed as your income with egenavgifter and income tax, even the part you leave in the business, unless you set money aside to a periodiseringsfond or expansionsfond.
How much does it cost to start an aktiebolag?
The share capital is at least SEK 25,000, and the money stays in the company. Registration with Bolagsverket costs SEK 2,400 online and SEK 2,700 on paper.
Does a Swedish aktiebolag need an auditor?
No, not a small private one. The articles of association only need to say that the company has no auditor, as long as the company does not meet more than one of these conditions two years in a row: more than 3 employees, a balance sheet total above SEK 1.5 million, or net turnover above SEK 3 million.
How much tax do I pay on dividends from my aktiebolag?
20% within the allowance. From 2026 every person gets a basic amount of SEK 322,400 (SEK 333,600 for 2027), plus a salary-based allowance if the company paid cash salary the year before. Dividends above the allowance are taxed as employment income.