SWEDEN Law and Practice Contributed by: Corinne Ekman, Mikael Nagy and Joacim Kanstedt, Gernandt & Danielsson Advokatbyrå KB
4. Government Inducements 4.1 Subsidy Programmes
For Swedish corporate investors, income (including interest) is subject to taxation at the statutory corporate income tax rate of 20.6% (2025), unless an exemption applies. However, Sweden offers a favourable tax regime for Swed - ish corporate investors through the participation exemption regime ( näringsbetingade andelar ). Under this regime, dividends and capital gains realised by a Swedish limited liability company on shares held as capital assets, are generally tax exempt, provided that the shares are unlist - ed. An investment into a Swedish limited liability company by foreign investors does generally not give rise to a Swedish permanent establishment or a liability to file income tax returns in Sweden. Foreign investors without a Swedish permanent establishment are not subject to taxation on capital gains on shares and other instruments in Swedish limited liability companies. Sweden does not levy withholding tax on repay - ment of principal and interest on loans paid to foreign lenders. Dividends paid on shares in Swedish limited liability companies to foreign shareholders without a Swedish permanent establishment are, as a general rule, subject to withholding tax at 30%, unless an exemption applies or if the tax rate is reduced under an applicable tax treaty (in certain cases to 0%). It can be noted that repayment of conditional shareholder contributions is for tax purposes considered as a repayment of debt and therefore not subject to withholding tax. 4.3 Government Endorsement By way of government-controlled funds, the Swedish state maintains its role as an active investor in the Swedish venture capital land - scape, providing both equity and debt financ - ing to various investees. As outlined in 2.4 Par-
Various government programmes offer grants or subsidies to support innovative projects within growth companies. These programmes often encourage research and development, helping companies to develop new products or technol - ogies that can attract private investment. Fur - ther, low-interest loans or guarantees are avail - able to start-ups and growth companies, aiming to ease financial pressures and facilitate expan - sion. These loans can supplement equity financ - ing, allowing companies to leverage additional capital for growth initiatives. These programmes collectively create a conducive environment for growth companies, making it easier for them to secure the necessary capital for expansion and innovation. One relevant example is the state aid received by Stegra (previously H2 Green Steel) amount - ing to approximately EUR105 million, during 2024, from the Swedish Energy Agency ( Ener- gimyndigheten ). However, following the media storm after Northvolt’s bankruptcy, the state aids granted on the Swedish market have been ques - tioned and the Swedish government has since then decided to deny Stegra further funding (even though it had been approved by the EU). 4.2 Tax Treatment The tax rules set out below apply to all Swedish limited liability companies ( aktiebolag ) and are not specific to VC investments. Capital contributed to a Swedish limited liability company – whether through share issues, share - holder contributions, or loans – does not gen - erally constitute taxable income or a VAT liable transaction.
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