Sole trader

Sole trader may be appropriate if you are going to start a business on your own. You are not required to put up any capital, but on the other hand there is no clear dividing line between you personally and your business with regard to finances.

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As a sole trader you are personally responsible for all of the company's obligations, such as liabilities and agreements. It is you as a private individual, and not the company, that rents premises or is a party in a legal case. This also means that you must pay all the company's debts yourself if there is not enough money in the business.

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Taxes and charges

As a sole trader, you pay tax on any profits your business makes. Tax is paid monthly in advance and is then checked against your tax return.

The profit in your business is your income minus your expenditure. You are also entitled to deduct a standard allowance of up to 25 per cent for deductible social security contributions. Social security contributions are state taxes which you as a business owner pay towards the social insurance system.

After paying social security contributions, municipal tax (and national income tax if you exceed a fixed income level), you can make your own drawings from the business profits. These drawings represent your salary as a sole trader.

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Company registration

It is not necessary to register you sole proprietorship with the Swedish Companies Registration Office. However you must register your business with the Swedish Tax Agency. You need to apply for F-tax and VAT registration and register as an employer if you are going to have employees. You can use our online service to apply for this permit.

Frequently asked questions

Sole trader

 

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