SWEDEN Law and Practice Contributed by: Niklas Sinander, Elin Carlsson, Axel Schelén and Björn Wendleby, Harvest Advokatbyrå
4.3 Foreign Lenders or Non-Money Centre Bank Lenders Foreign lenders, being entities not organised under Swedish law and that do not conduct business activities from a Swedish permanent establishment, are generally not subject to Swedish income tax in respect of payments of principal amounts or interest of loans. However, lenders based in Sweden may be subject to taxation in respect of income that derives from certain capital assets, such as interest. Foreign lenders, including non-money centre bank lenders, should therefore carefully consider their operations and potential permanent establishment in Sweden to have visibility on their situation from a Swedish law tax perspective. Under Swedish law, a security interest can generally be created over any asset as such. The most com- mon types of assets that security is created over are shares, real property, cash deposited in bank accounts, receivables and business mortgages. A binding agreement between the pledgor and the pledgee is required under Swedish law to create a security interest. Such security agreement may be made in oral form or – as is the case in almost all commercial transactions – written form. Due perfection of the most commonly used assets that security is created over is made as follows. Shares Security can be taken over shares in a limited liabil- ity company, and such security interest is commonly created by way of a pledge. Perfection of the secu- rity interest created over the shares – represented by physical share certificates issued by that company – requires that the physical share certificates repre- senting the pledged shares be handed over to the pledgee. 5. Guarantees and Security 5.1 Assets and Forms of Security In relation to companies whose shares are electroni- cally registered with the Central Securities Depository, perfection of the security interest is made by way of:
• registration if the shares are held in the owner’s name; and • notice to the relevant custodian if the shares are being held by a custodian. Real Property Security over real property is created by way of pledg- ing mortgage certificates representing a certain sum and a certain ranking in relation to the real property. Perfection of a pledge of physical mortgage certifi- cates is perfected by way of handing over the physical mortgage certificates to the pledgee. In relation to a pledge over electronic mortgage certificates, perfec- tion is made by way of registration with the Swedish Land Registration Authority ( Lantmäteriet ). Business Mortgage (Floating Charge) Security can be taken over business mortgages (float- ing charges) covering certain movable property (such as inventory, claims and similar) of the security pro- vider. A business mortgage does not include cash, proceeds in bank accounts, financial instruments and similar. Business mortgage certificates will represent a certain sum and ranking in relation to business mort- gages in respect of a company. Security over physical business mortgages is per- fected by way of handing over the physical business mortgage certificates to the pledgee. Security over electronic business mortgage certificates is perfected by way of registration with the Swedish Companies Registration Office ( Bolagsverket ). Receivables Due perfection of a pledge of receivables is created by way of notice to the debtor and the pledgor being restricted from receiving payments of such contrac- tual claims. In respect of so-called negotiable promissory notes ( löpande skuldebrev ), being bearer instruments of the value, due perfection requires that such promissory notes be handed over to the pledgee. Cash in Bank Accounts A pledge over cash deposited in a bank account is perfected by way of notice to the account bank and
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