SWEDEN Law and Practice Contributed by: Niklas Sinander, Elin Carlsson, Axel Schelén and Björn Wendleby, Harvest Advokatbyrå
3.9 Recent Legal and Commercial Developments
and housing loans) generally relate to consumer con- sumption. 3.11 Disclosure Requirements There is no specific Swedish regulation regarding dis- closure of certain financial contracts.
The increasing number of sanctions imposed on Rus- sia, Belarus and entities established and/or connected thereto have caused changes in legal documentation in relation to borrowers with some kind of Russian or Belarusian connection. Lenders tend to be even stricter and pay more attention to sanction provisions as a result of the war in Ukraine. Commercially, activ- ity remains strong in renewable energy, etc, and ESG considerations continue to be integrated across bank and bond products, with sustainability-linked features being increasingly standard. 3.10 Usury Laws Usury is considered a criminal offence under the Swedish Criminal Code (SFS 1962:700). Where a person exploits someone else (eg, due to distress, lack of understanding or similar) when enter- ing into an agreement or some other action with legal consequences with the purpose of benefitting there- from, and the benefit is clearly disproportionate to the consideration or for which no consideration is to be paid, it is considered usury. Usury also arises where a person, in the course of business or other large-scale activities, provides credit and obtains interest or another financial benefit that is clearly disproportionate to the consideration. In respect of commercial transactions, there are no clear limits on what interest rates would be consid- ered usury. Such limits are therefore determined on a case-by-case basis. It may also be noted that an interest rate provision can be modified or set aside if considered to be unfair or unreasonable pursuant to the Swedish Contracts Act (SFS 1915:218). However, the threshold for a contrac- tual provision to be considered unfair or unreasonable in a commercial relationship is rather high. Further, there is an interest rate cap, calculated as the reference rate plus 20%, in respect of certain high- cost credits provided to consumers pursuant to the Swedish Consumer Credit Act (SFS 2010:1846). Such high-cost credits (excluding certain credit purchases
4. Tax 4.1 Withholding Tax
Payments of principal or interest to foreign lenders are generally not subject to withholding tax under Swed- ish law, provided that such lenders are entities not organised under Swedish law and that do not con- duct business activities from a Swedish permanent establishment. 4.2 Other Taxes, Duties, Charges or Tax Considerations There are no other specific major restrictions, consents required for approval, or significant costs associated with granting security or guarantees under Swedish law. However, the issuance of new business mort- gage certificates and property mortgage certificates will require a stamp duty to be paid in connection with the issuance. Such stamp duty is a one-time cost, and such certificates may, after issuance, be reused without additional stamp duty being paid. Business Mortgage Certificates The stamp duty for the issuance of a new business mortgage certificate is currently 1% of the face value of the business mortgage certificate. Property Mortgage Certificates The stamp duty for the issuance of a new property mortgage certificate is currently 2% of the face value of the business mortgage certificate. Other Assets Security over ships and aircraft are also subject to stamp duty. Fees Minor application fees will be payable in addition to the payments of stamp duty as described above.
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