The Swedish government plans to lower corporate taxes in two stages from 22% down to 20.6%. The rate is to fall to 21.4 percent from Jan. 1, 2018 and to 20.6 percent in 2021, Finance Minister Magdalena Andersson said on Wednesday.
At the same time, the intention is to take measures against aggressive tax planning and make the tax system more transparent. This will involve new rules on deductible interest payments which have been quite generous so far. The proposal includes restrictions for deductible interest payments in certain cross-border situations (hybrid rules) as well as restrictions for deductible interest in certain internal loans. New rules on financial leasing agreements are also to be expected.
The original plan was to reduce the corporate tax rate to 20% (the prevailing rate in Finland).
Despite cultural, economic and business differences the Nordic countries have many positive aspects in common. The choice of where to locate a business in this part of the world will naturally depend on the specific nature of the business in question. Scandicorp will happily discuss with you about the benefits of a specific country for your business. In this article, we will look at 10 good reasons for a foreign business to establish a presence in the Nordic countries (Norway, Sweden and Finland).
1. High international rankings
The Nordic countries rank very high in international benchmarks in the top places of the most secure and best places to live, least corrupt countries and one of the best health systems in the world.
Everything works. If something doesn’t work, it will usually be addressed as soon as possible. You save a lot of time and nerves when you can rely on the infrastructure, logistics and timekeeping etc.
Most Nordic people are fluent in English and will be more than happy to practice their English with you. Although a basic understanding of the local language will make everyday life easier for you.
4. Highly skilled workforce
Thanks to a good public schooling system and a high overall level of education, recruiting locals will be relatively easy in most fields of business.
5. Moderate corporate taxes
The Nordic countries have traditionally been perceived as high-tax jurisdictions. However, the corporate tax rates are very moderate in international comparison.
6. Business environment
The Nordic countries have a very strong financial sector, a stable, ethical and predictable business environment. This provides a solid base for a long-term business solution. Good logistics thanks to modern airports, efficient ports and railways.
7. Lively startup scene and pioneering new technology
The governments of the Nordic countries as well as local communities have encouraged and supported research and development, the creation of start-up hubs and events. The atmosphere for start-ups has proved to be very inspiring.
8. Relatively easy to find local partners
It’s good to find local partners who you could collaborate with on common projects as this will help build your credibility.
9. Over 25 million consumers
In a consistent market with a strong purchasing power due to the relatively high GDP per capita.
10. Good places to test new ideas and products
Nordic consumers and businesses are among the first to adapt to technologically, new products and concepts. Testing your new products and technologies in the Nordics first before going global may be a smart move.
The Swedish government will propose a corporate tax cut to 20%, down from present 22% according to Finance Minister Magdalena Andersson and Deputy Finance Minister Per Bolund. The corporate tax rate of neighboring Finland has been 20% for some years now.
The proposed changes also include limitations to the deductibility of interest payments for companies. The aim of the proposal is to make equity financing more attractive compared to loans. The ministers stated that aggressive tax planning will become more difficult due to reductions in the deductibility of interest.
“With the proposals we want to strengthen competitiveness and create a more dynamic business climate,” they said on business daily Dagens Industri’s website.
The Finance Ministry will today circulate a Memorandum to interested parties.
The proposed changes would be implemented on July 1st, 2018.
Sweden is the best country in the world for women, at least according to a large american survey done by US News & World Report together with University of Pennsylvania and the brand consultants BAV Consulting. The survey ranks 80 countries around the world based on how closely people associate them with certain attributes such as human rights, gender equality, income equality, safety and overall progressive attitude. More than 21,000 respondents were interviewed and most of the respondents classified themselves as belonging to an ”informed elite” or being decision makers in business. The other Scandinavian countries also did well: Sweden was followed by Denmark and Norway. Finland came 6th.
According to New York Times this may come as a surprise to American conservatives, some of whom — like the Fox News host Bill O’Reilly have argued in recent weeks that criminal hordes of Muslim immigrants have forced frightened Swedish women to barricade themselves at home.
On the other hand some other studies suggest that Sweden may not be perfect paradise for women. Earlier this week, an organization promoting diversity in the workplace investigated a number of Sweden’s biggest private equity firms and found only 3 out of 92 top positions were held by women. Around 32 percent of board members of listed companies are women, and this figure appears to be growing.
Bloomberg Markets recently published a survey ”The Battle of Ideas” ranking the most innovative countries in the World. South Korea topped the list. The silver medal was won by Sweden which climbed up one place from last year passing Germany.
The Nordic countries are still highly ranked on the list: Finland as number five, Denmark as eight and Norway as fourteen. Bloomberg ranks countries on the basis of parameters such as patent activity, number of high-tech companies, education and research.
Bloombergs survey correlates well with another recent report, the Global Talent Competitiveness Index 2017 (GTCI) published by Adecco and INSEAD. According to this report the Nordic countries rank among the top in the World. GTCI focuses on how technology affects talent competitiveness and the nature of work. Finland is ranked best in formal education, vocational enrolment, social mobility, environmental performance, employability, ease of finding employees and availability of scientists and engineers.
Do you want to set up your business in one of the most innovative regions of the world? Feel free to contact Scandicorp who will happily provide you with any help and information.
The Nordic countries ranked as top five overall in this year’s Global Sustainable Competitiveness Index. Sweden as first, followed by Norway, Finland, Denmark and Iceland.
Altogether, the index evaluated 180 countries across their natural capital, resource intensity, intellectual capital, social cohesion and governance. The Global Sustainable Competitiveness Index utilizes recognized data sources (the World Bank, various UN databases) and 109 quantitative performance indicators to measure performance.
The index was compiled by Swiss-Korean sustainability think-tank and advisory SolAbility.
The Nordic countries will no doubt be a good choice to establish a Cleantech startup. Likewise this market would be well suited for established Cleantech companies to test their products and services. Scandicorp will gladly provide you with guidance and corporate services.
The world’s oldest central bank, Sweden’s Riksbank, was the first to issue paper banknotes in the 1660s. Now it is launching a project to examine what a central bank-backed digital currency would look like and what challenges it would pose. It hopes to take a decision on whether to start issuing what it calls an “e-krona” within two years.
Sweden has seen a dramatic drop in the use of cash – down 40% since 2009.
Cecilia Skingsley, deputy governor at the Riksbank: “This is as revolutionary as the paper note 300 years ago. What does it mean for monetary policy and financial stability? How do we design this: a rechargeable card, an app or another way?” Cecilia Skingsley gave a speech today at a Fin-Tech conference in Stockholm. She pointed out that the “e-krona” will not replace cash and other means of payment but would function as a complement.
Other central banks such the Bank of England and the Bank of Canada have started looking at the potential benefits and challenges of digital currencies such as bitcoin.
A recently published report by the World Bank places Sweden as the 9th easiest places to do business in out of 190 countries surveyed. The 2017 edition of the report, which is the 14th instalment of the annual study, appraises policies and regulations which boosts business activities in a country. Besides cost, other notable factors taken into consideration by foreign investors when assessing a country for investments include political and economic stability, risks, business policies, transparency, monetary and fiscal policies, bureaucracy, human capital, logistics, infrastructure and intellectual property protection.
In contrast to Sweden’s reputation for tricky bureaucracy, this year’s report shows it is becoming a more efficient place for business, with increased administrative efficiency highlighted, as well as praise for new automatic registration of mortgages and renewal of ownership.
The report ranks New Zealand as the best, Singapore as the second best and Denmark as the third best countries in the world for doing business. Overall the Nordic countries scored high with Norway as 6th and Finland as 13th.
Denmark, followed by Norway, Finland and Sweden turned out to enjoy the world’s best and fairest rule of law according to a new global ranking report by the World Justice Project (WSP). Rule of law is a fundamental condition for liberal democracy.
More than 100,000 households and experts were surveyed to measure rule of law in 113 countries. The index is based on the primary factors of: constraint on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice and criminal justice.
Here are the top four performers in each of the index’s main categories:
Constraints on Government Powers – Denmark, Norway, Finland, Netherlands
Absence of Corruption – Denmark, Singapore, Norway, Finland
Open Government – Norway, Denmark, Finland, Netherlands
Fundamental Rights – Norway, Finland, Denmark, Austria
Order and Security – Singapore, Finland, Sweden, Denmark
Regulatory Enforcement – Singapore, Netherlands, Norway, Sweden
Civil Justice – Netherlands, Germany, Norway, Singapore
Criminal Justice – Finland, Norway, Austria, Singapore
One more good reason to establish a business presence in the Nordic countries?
Hyperloop is a technology to move people or things anywhere in the world quickly, safely, efficiently, on-demand and with minimal impact to the environment. The technology was reintroduced and updated by Elon Musk (Tesla and SpaceX). The system uses electric propulsion to accelerate a passenger or cargo vehicle through a tube in a low pressure environment. The autonomous vehicle levitates slightly above the track and glides at faster-than-airline speeds over long distances. Direct emissions, noise, delay, weather concerns and pilot error are eliminated. This could be a giant step in transportation.
Helsinki to Stockholm in less than 30 minutes
Hyperloop is no longer science fiction as Hyperloop is now aiming to demonstrate a full-scale, high-speed test of its track, vehicle and controlled-environment tube in late 2016 or early 2017. This bold vision may become reality thanks to a proposed Hyperloop link between the two capital cities which is estimated to bring annual savings of 321 million euros from the reduced travel time. The Hyperloop will also connect the city centers with the airports, a trip of 10 minutes. Todays travel options between the two capitals are about 3-4 hours by air, including airport tranfers and time spent at airport or an overnight cruise-ferry crossing.
These are the results of the world’s first pre-feasibility study of a full-scale Hyperloop system produced by US-based technology specialist Hyperloop One, consultants KPMG and Finnish company FS Links. FS Links was founded a year ago to facilitate the building of a fixed link between the two Nordic countries. An entire region of 5 million people would become a metro network, lifting property values and productivity along the route.
According to FS Links, Hyperloop One is currently looking for a ‘proof of operations’ facility, with research centre and rails, and they have already decided it will be in Europe. Many places are competing for it, but Finland has the lead. FS Links have made the first actual business case and are also the first company Hyperloop has invested in.”
Key to these plans is the Finnish city of Salo. The city, located 115 kilometres from Helsinki, has signed a ‘letter of intent’ with Hyperloop One to become the first test station along the proposed Helsinki-Stockholm route. Salo officials believe the super-fast connection would be a great opportunity for growth and new jobs in the high-tech city.
A Nordic metropol
The next steps in FS Links and Salo’s plans are to find partners to fund the public-private initiative (the total cost is estimated to be 19 billion euros) and then secure a final agreement with Hyperloop One.
There are still many things that need to be solved. But the pre-feasibility study shows the connection between Stockholm and Helsinki is not impossible. The challenges appear to be funding and execution.
While the proposed Helsinki-Stockholm route could take 12-15 years to build, a fast way to transport goods would open up completely new business opportunities, while people could quickly and easily commute from one country to another.