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Foreign Direct Investment

According to UNCTAD's World Investment Report 2022, FDI inflows to Sweden increased 43.4% in 2021, reaching USD 27 billion, up from USD 18.8 billion one year earlier. In the same year, Sweden was in 14th place among the world's most attractive countries for investments. The stock of FDI stood at USD 386.5 billion in 2021, around 61.6% of the country’s GDP. Sweden is also a big investor, with an outward FDI stock of USD 447.5 billion (71.3% of GDP). In terms of FDI stocks, the UK, Luxembourg, the Netherlands, Germany, the U.S., and Norway are the main investing countries in Sweden. The largest foreign assets are held in the financial and insurance activities sector, manufacture of petroleum, chemical products, rubber and plastic products. In 2021, the largest increase was recorded in the information and communication sector (data Statistics Sweden). According to the latest figures from OECD, in the first semester of 2022, FDI inflows to Sweden reached USD 22.6 billion, up by more than 40% compared to the same period one year earlier.
Despite the unfavourable international situation, the country maintains a high level of appeal to foreign investors, because of its multilingual and qualified workforce, very high per capita purchasing power, an economy at the forefront of new technologies and innovation, as well as its advantageous tax regime. The Swedish government has undertaken measures to develop support for investment, focusing on key sectors (biotechnologies and food processing), as well as rapidly growing markets (Baltic countries, India, Brazil, etc.). There are gaps in the food-processing field, as well as in the housing and interior design sectors. The government assigned the Inspectorate of Strategic Products (ISP) and the Swedish Defence Research Agency (FOI) the monitoring of FDI in sensitive areas. Sweden is one of the few EU Member States that did not yet introduce FDI screening rules. However, proposed legislation was presented, which is expected to enter into force in 2023. As evidence of the quality of the Swedish business climate, the country ranks high on most international investment lists, including the Economist Business Environment ranking (7th out of 82 countries), the AT Kearney 2022 Foreign Direct Investment Confidence Index (13th worldwide), and the Global Innovation Index 2022 (3rd worldwide, the country has been in the top 3 for over a decade).

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 21,51421,13345,963
FDI Stock (million USD) 395,715387,483353,791
Number of Greenfield Investments* 9395125
Value of Greenfield Investments (million USD) 2,3322,8582,616

Source: UNCTAD - Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Country Comparison For the Protection of Investors Sweden OECD United States Germany
Index of Transaction Transparency* 8.0 6.5 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.3 9.0 5.0
Index of Shareholders’ Power*** 7.0 7.3 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.


What to consider if you invest in Sweden

Strong Points
Advantages for FDI in Sweden:

  • The political and economic situation is very favourable and creates a good quality business environment. 
  • According to the World Bank, Sweden is the 10th country in terms of ease of doing business (Doing Business 2020).
  • Corporates taxes are among the lowest in Europe: The country applies participation exemption, authorises a total tax deduction for interest and has no strict capitalisation rules. 
  • The economy is open, diversified (specialised in high-potential sectors such as high-tech products and sustainable economy) and extremely competitive. 
  • Demographics are becoming increasingly dynamic and are fuelling a highly qualified workforce adapted to export trades. 
  • The judicial system is balanced and allows for safe, transparent and reliable decisions. 
  • The quality of management and advisory services is very high, and the business procedures are simple to undertake. 
  • The potential of the domestic market is often underestimated, as Swedish consumers have one of the highest levels of purchasing power in Europe and a growing propensity to consume. 

For more information, visit the Business Sweden website.

Weak Points

Disadvantages for FDI include:

  • High labour costs
  • Rigid labour legislation giving priority to worker protection
  • High household debt (201% of net disposable income)
  • Tensions in the housing market
Government Measures to Motivate or Restrict FDI
Since entering the European Union, the Swedish government has put in place a number of reforms to improve the legal business environment. This allowed the country to attract foreign investors and increase its competitiveness.
There are a number of incentives available to both Swedish and foreign owned companies, including:

  • Financial incentives (such as loans and grants).
  • Favourable tax regimes (such as tax relief for foreign experts and key personnel).

The Swedish government offers certain incentives to set up a business in targeted depressed areas. A range of regional support programs, including location and employment grants, low rent industrial parks, and economic free zones are available.

Sweden does not have a national security screening mechanism for inbound foreign investment.  However, the government is considering how to implement the EU Commission’s investment screening framework.

Business Sweden is the investment promotion agency tasked with facilitating business.


Investment Opportunities

The Key Sectors of the National Economy
Automotive, businesses, cleaning, natural resources (including the mining industry), packaging, mechanical industry, ICT.
High Potential Sectors
Automotive, retail, cleaning, real estate, natural resources, packaging, information and communication technologies, life sciences, transport, renewable energies (wind, biofuels and geothermal), eco-construction.
Privatization Programmes
Privatisation policies are debated in Sweden. Some measures concerning the privatisation of education and health divide opinion. The government has a mandate to divest or liquidate its holdings in various companies in the vehicle inspection, automotive and export credit sectors.
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Sweden
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
Post, delivery
Sectors in Decline
Agriculture and in particular the livestock sector.