How to Hire Employees in Sweden – A Step-by-Step Guide for Foreign Companies.

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How to Hire Employees in Sweden – A Step-by-Step Guide for Foreign Companies

Hiring employees in Sweden can be a great move for international businesses. The country offers a highly educated workforce, strong worker protections, and a transparent business environment. But if you’re a foreign company without a local entity, navigating Swedish employment rules can be a challenge.

In this article, we’ll guide you through the key steps to hire employees in Sweden legally and efficiently — whether you're opening a branch or working remotely with local staff.

Step 1: Determine Your Legal Setup

To hire someone in Sweden, you generally need to establish a legal presence, such as:

  • A Swedish branch (filial)

  • A Swedish subsidiary (AB)

  • Or use an Employer of Record (EOR)

Setting up a company in Sweden takes time and includes registration with the Swedish Companies Registration Office (Bolagsverket) and the Tax Agency (Skatteverket). If you want to avoid that setup, you can partner with an EOR who becomes the legal employer on your behalf.

Step 2: Register as an Employer

If you choose to hire directly (not via an EOR), your company must:

  • Register as an employer with Skatteverket

  • Obtain a Swedish corporate ID number

  • Report monthly employer declarations

  • Withhold and remit employee income tax

This also makes you responsible for pension contributions, sick pay, and vacation pay according to Swedish law.

Step 3: Understand Swedish Labor Law

Sweden has strong employee protections, many of which are outlined in national labor laws and collective agreements (kollektivavtal). Key points to understand:

  • Employment contracts must be provided in writing

  • Notice periods vary depending on tenure and agreements

  • Vacation rights: 25 days minimum

  • Parental leave: Generous policies funded through social security

  • Probation period: Max 6 months

Even if you're not bound to a collective agreement, many companies choose to follow similar terms to remain competitive.

Step 4: Handle Payroll and Taxes

Swedish payroll includes several components:

  • Gross salary

  • Employer contributions (~31.42% of salary)

  • Income tax withholding (based on individual tax cards)

  • Vacation pay (typically 12% if not accrued separately)

Payslips must be issued monthly, and payroll reports must be submitted to Skatteverket.

Some employers also offer benefits like wellness allowances, meal subsidies, or private health insurance — though not required by law.

Final Thoughts

Sweden offers incredible opportunities for companies looking to expand — but hiring employees requires understanding and respecting the local rules. Whether you go the full registration route or use an EOR, being compliant from day one saves time and avoids legal risk.

We help foreign companies hire employees the right way — legally, efficiently, and with local support. Need help? Let’s talk.

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Before you go, I just want to briefly tell you about the photos featured.

This is Visby, the medieval gem of the island of Gotland in the Baltic Sea.
Surrounded by a 13th-century stone wall, Visby is one of Sweden’s best-preserved historical towns and a UNESCO World Heritage site.

Every summer, Sweden’s political leaders gather here for “Almedalsveckan” – a week of open debates and civic engagement that has been running since the 1960s.
It’s also home to the Medieval Week in August, when locals and visitors dress in armor and robes to relive the Middle Ages.

Medieval Week