The Banking Environment
Economic and political environment
Sweden is a democratic monarchy. It is the largest Scandinavia country with over 9 million inhabitants. Sweden has been known for its neutrality and policy of non-alignment with either NATO or the Warsaw Pact. It is a member of most international organizations (UN, UNESCO, WHO etc).
Sweden has been a member of the European Union since 1995 but decided not to join EMU. A referendum in 2003 rejected the euro by a decisive margin – against the advice of the government and the wishes of business. The Prime Minister stated it was unlikely there would be a new referendum before 2010.
Key economic indicators for 2008 estimates (Source: Central Intelligence Agency Country Profiles)
69.6% of the economy is in the services sector, 28.9% industrial and 1.5% agriculture.
Population: 9,045,389
GDP: USD 358.4 billion
Per capita GDP: USD 39,600
Real GDP growth: 0.9%
Unemployment: 6.2%
Public debt/GDP: 36.5%
Export partners are Germany 10.4%, Norway 9.4%, US 7.6%, Denmark 7.4%, UK 7.1%, Finland 6.4%, Netherlands 5.1%, France 5%, Belgium 4.6% (2006)
Import partners are Germany 18.4%, Denmark 9.2%, Norway 8.3%, UK 6.8%, Finland 6.1%, Netherlands 5.8%, France 5%, China 4.3%, Belgium 4.1% (2006)
Banking in general
The banking industry is very advanced with nearly all types of services offered both to the individual corporate customer and to the individual private consumer. All leading domestic banks are universal banks, offering mortgages and insurance.
There was much consolidation in the 1990s following the secondary banking crash. The market is dominated by a small number of large banks.
The central bank is the Riksbank. It is a member of the European System of Central Banks.
Financial supervision is vested in the “Finansinspektionen”.
Compared to most European countries prices and fees for banking services are quite high in Sweden, although there are no lifting fees for cross-border payments. Sweden has adopted the EU regulation on cross-border payments: an “EU-payment” can cost as little as SEK1,50; prices on higher amounts are always expressed as flat fees..
Both current accounts in SEK and foreign currencies are offered. Interest is applied for credit balances depending on the currency and the balance held.
Overdraft facilities are granted. Terms and conditions are negotiated on a case by case basis.
The “Stockholm Interbank Offered rate” (STIBOR) is the benchmark interest rate in SEK.
All fiscally resident companies are subject to a 28% corporation tax on their profits.
Currency
Swedish krona (SEK)
Tax Considerations
See Tax and Legal template for Sweden.
Central Bank Reporting
All payments between residents and non-residents have to be reported, it used to be to the Riksbank but has now changed into the National Tax Board when the amount exceeds SEK100,000. The banks usually provide the resident with forms pre-filled from the transaction details and ask that the form be returned within 12 working days.
Where residents hold bank accounts outside Sweden and the account turnover in the month exceeds SEK100 million, the transactions and balance on that account must be reported to the National Tax Board.
Foreign Exchange Controls
None.