A sole trader is a form of business where you, as a private individual and sole owner, run and are responsible for the business. There is no clear boundary between you as an owner and the company.
1. Register your business
To be able to start a sole trader, you need to register the business with the Tax Agency. The easiest way to do this is through the business registration service.
The service also allows you to:
- apply for F-tax or FA-tax
- register for VAT
- register as an employer, if you are going to employ anyone
Help in choosing a business name
Need help choosing a business name? TheHelp choosing a company name service provides information to help you choose a name for your business.
F-tax, VAT, employer and SNI
When you start your business, you must have F-tax approval and you usually need to register for VAT. The easiest way to do this is via the service here at verksamt.se.
Apply for F-tax or FA-tax approval
As a rule, if you are starting a sole trader business, you must have F-tax approval. F-tax approval means that you are responsible for paying tax and individual social security contributions on the remuneration for work you have done for someone. If you only have income from your sole trader, you must apply for F-tax. If you are going to start a sole trader simultaneous with your employment elsewhere, or if you expect to be employed while operating your sole trader, you should apply for FA-tax approval.
Apply for VAT registration
You usually need to register for VAT (value added tax), which is a tax we all pay when we buy goods and services. VAT is often included in the price and therefore not a concern for individuals. As an entrepreneur, however, you must declare and pay VAT.
Register as an employer
If you have employees, you must register as an employer. As an employer, you must submit a monthly PAYE tax return. You must do so even if you have not paid any salary or other taxable remuneration.
More about taxes and contributions
Learn more about how to calculate your tax and file a preliminary income tax return at the taxes for sole traders page.
2. Register your business name
You can, but are not usually required to, register your business name with the Swedish Companies Registration Office when you start your sole trader business. You may need to register your business name if, for example, you participate in public procurement or if your company needs a licence to operate a certain activity.
If you register your business name with the Swedish Companies Registration Office, the name is protected in the county where the business is registered. Regardless of whether your sole trader business is already registered with the Tax Agency, it will be a new registration with Companies Registration Office, as your company is not in their register.
You can also choose to register the business name at a later stage.
Use the service for registering businesses or associations to apply to register your business name and your sole trader business. The Swedish Companies Registration Office sends a certificate of registration when the company is registered. It costs from SEK 1,200 to register the business name of a sole trader.
If you cannot use the service, you must contact the Swedish Companies Registration Office.
3. Check business licensing requirements
You should learn whether your business requires a license, registration or any other form of application to public authorities, municipalities or other organisations. Special requirements may be imposed on the operator or the premises used by the business.
You can have several types of business activities
You can have several types of business activities in a sole trader. You keep joint accounts for the different business together and pay tax on them together.
Spouses can run a sole trader together
Spouses or cohabitants with joint children can run a sole trader together. To be considered as running a joint business, you must have equivalent positions in the business. The Tax Agency considers factors such as job duties and education. It is enough for one of you to register for F-tax. The person who registers will then manage the joint accounts. The other person declares their share of the income in their income tax return with the so-called NE annex. However, you must both be registered for VAT and declare your respective share of VAT.
You can also choose to have only one of you declare all VAT. Then you must appoint a representative and form a simple partnership.
If the business requires specific skills or experience that only one of you has, the other is considered a helpmeet. Only the one directing the company can be approved for F-tax and VAT. The helpmeet can only share in the company's profits but, in the NE annex, may report an income not exceeding the market rate of remuneration for work performed.