Banks & Finances Sweden

In Sweden, there are several banks that are considered most accommodating to foreigners. Here is a brief overview of banks that could be a good choice for expats:

Swedbank – One of the largest and most popular banks among foreigners in Sweden. Swedbank offers a wide network of branches across the country, a convenient mobile app, and internet banking. It is suitable for those who prefer traditional banking services with physical presence. The bank is also actively supporting sustainable development, which might be interesting to those who share such values. However, it is worth noting that the bank has account maintenance fees.

Handelsbanken – Another major bank often recommended to foreigners. It is known for a high level of customer satisfaction and quality service. This bank offers both personal and business accounts, making it suitable for different categories of clients. It is convenient for long-term relationships with the bank and focused on quality service.

SEB – SEB provides a wide range of services including mobile and internet banking, making it convenient for remote financial management. The bank actively implements innovations and supports clients in multiple languages, which facilitates the process of opening and managing an account for foreigners.

Nordea – Nordea is an international bank with branches in several Scandinavian countries, which simplifies the process for those who already have an account in another country. The bank also offers specialized products for foreigners and supports an easy system for international transfers.

N26 and Revolut – These online banks are also popular among expats due to ease of use and lack of physical infrastructure. They offer free or low-cost accounts, multi-currency options, and mobile apps for full financial control. N26 is especially known for transparent terms and no hidden fees.

Each of these banks has its own features, so before choosing it is worth paying attention to factors like the availability of physical support, fees, international transfer options, and availability of services in English.

To open a bank account in Sweden, immigrants need to gather certain documents and complete several steps. The process of opening an account is largely standardized, but it may vary depending on the bank and your status (resident/non-resident).

Main documents required for opening an account:

1. Passport or national identity card – to confirm your identity.

2. Personnummer (personal identification number) – this number is essential for many operations in Sweden, including opening an account. It can be obtained through the tax agency.

3. Proof of address in Sweden – can be provided in the form of a rental agreement or a utility bill.

4. Residence permit – citizens from non-EU countries will require a valid residence permit.

5. Employment contract or job certificate – to confirm your employment (if applicable).

6. Proof of income – for non-residents or those without a personal number, some banks may require financial information of the person you are dependent on (for instance, if you have come as a family member).

7. ID card issued by the tax agency.

Steps to open an account:

1. Choose a bank – The most popular banks for immigrants in Sweden are Swedbank, Handelsbanken, SEB, and Nordea. Each of them offers services in English and has branches across the country.

2. Schedule an appointment – Most banks require a prior appointment for opening an account. This can be done online or by phone.

3. Visit the bank branch – Bring the necessary documents and complete an application. In some cases, several meetings may be required to confirm all the information. If you do not speak Swedish or English, you should bring a translator or someone who can assist with translation. Some banks may refuse to open an account and issue BankID due to language barriers.

4. Wait for confirmation – The review process usually takes several days, after which you will receive a bank card by mail at your home, along with a PIN code and access to internet banking.

5. Get BankID — After opening an account, you will be able to obtain a Swedish BankID, which is necessary for most online transactions in the country.

6. Access to SWISH – money transfers between residents of the country.

Tips:

- If you do not have a personal identification number, try online banks like N26 or Revolut, which have less stringent requirements for new clients. Keep in mind that physical banks are very strict and monitor money transfers to these accounts, and may require you to provide proof of funds' origin.

- Some banks, such as ICA Banken, may offer basic accounts with minimal requirements.

To withdraw cash with a foreign bank card in Sweden, you need to follow a few simple steps:

Using ATMs

In Sweden, ATMs, called Bankomat, are widely available and accept most international cards, such as Visa and Mastercard. These ATMs usually offer an English language menu, making the process easy for foreign users. Withdrawal limits generally depend on your home banking system, rather than the ATMs in Sweden.

Avoid Dynamic Currency Conversion (DCC)

When withdrawing money from an ATM, always choose the local currency option — Swedish Krona (SEK). The option to pay in your home currency (Dynamic Currency Conversion) may seem convenient, but it often comes with hidden fees and unfavorable exchange rates. This will increase the cost of the transaction.

Withdrawal Fees

Some Swedish banks do not charge additional fees for using international cards, however, your home bank may charge a fee for international transactions. Make sure to check your card's terms before the trip to avoid unexpected expenses. It is also recommended to withdraw larger amounts at once to minimize fees for multiple transactions.

Safety and Recommendations

Always use ATMs in safe locations, such as bank branches or shopping centers, and cover the keypad when entering your PIN. It's also useful to monitor your transactions via online banking to promptly detect any errors or fraudulent activities.

To send money from Sweden to another country, there are several effective and popular methods. The choice of method depends on the speed, fees, and convenience for you and the recipient.

Online money transfer services

- Wise — one of the most popular and cost-effective options for sending money abroad. Wise offers low fees and uses the real interbank exchange rate without hidden mark-ups. Money can be sent via bank transfer, debit card, credit card, or Apple/Google Pay. Transfer time usually ranges from a few minutes to 1-2 days depending on the chosen payment method.

- WorldRemit — another popular service that allows sending money to more than 130 countries. WorldRemit supports transfers to bank accounts as well as cash payouts, mobile wallets, and other methods. Fees vary depending on the country and transfer method.

- Western Union — offers both online transfers and transfers through agent locations. It's a convenient option for cash pick-up at distribution points, especially if the recipient doesn't have a bank account. However, fees may be higher compared to other services.

International Bank Transfers

Traditional banks, such as SEB, Swedbank, and Nordea, also offer the possibility to send money abroad. However, bank transfers are usually more expensive due to higher fees and less favorable exchange rates. The process can take 2 to 5 business days, as most banks use the SWIFT system for international transfers.

Cryptocurrency Transfers

If the recipient uses a crypto wallet, you may consider sending money through cryptocurrencies. This can be a fast and economical way, but it requires knowledge of cryptocurrency transactions and considering exchange rate fluctuations.

Tips:

- Avoid hidden fees: Always check the exchange rate and choose the local currency of the recipient's country to avoid additional charges associated with dynamic currency conversion (DCC).

- Compare services: Use comparison websites to choose the cheapest and fastest translation option.

Foreigners can obtain a mortgage or loan in Sweden, but this requires meeting several requirements and preparing documents.

Conditions for obtaining a mortgage:

Personnummer (personal number): This is a mandatory requirement for most banks. The personnummer is used to confirm your registration in Sweden and allows the bank to check your credit history.

Income and employment: Foreigners need to confirm stable income and employment in Sweden. Some banks require the salary to be paid in Swedish kronor. Generally, the mortgage amount should not exceed five times the annual pre-tax income.

Down payment: In Sweden, the maximum mortgage is 85% of the property's value. This means a minimum of 15% of your own funds are needed as a down payment.

Credit history: Credit history plays an important role in the mortgage approval process. For foreigners without a credit history in Sweden, getting a mortgage can be more challenging. In such cases, banks may require a larger down payment or a higher interest rate.

Documents that may be needed:

- Passport or identity card.

- Personal identification number.

- Proof of income (employment contract, tax declarations).

- Proof of down payment availability.

- In some cases, a credit history from another country may be required.

Additional tips:

- Comparing offers: It is recommended to compare offers from different banks using online services such as Lendo or Compricer, which allow evaluating mortgage rates and conditions.

- Repayment: In Sweden, mandatory mortgage repayment requirements are set. For example, if the loan amount exceeds 70% of the property value, you must repay 2% of the total annually until the debt is reduced to 50% of the property's value.

Real estate purchase:

Personal number: For large financial transactions, such as purchasing real estate, a personal identification number is required. This number is necessary to open a bank account and enter legal agreements.

Payment: After selecting the property and signing the contract, the buyer makes an initial down payment (usually 10% of the value). The remaining amount is paid on the day of key transfer. A bank transfer through a Swedish bank is used for this. The buyer also pays a stamp duty (1.5% of the value) and administrative fees.

Mortgage: Foreigners can get a mortgage for purchasing property. Banks typically offer loans up to 85% of the housing value, but the down payment must be at least 15%. A credit history in Sweden or another country may be required, as well as proof of stable income.

Car purchase:

Auto loan: Foreigners can take out a loan to purchase a car. This requires stable income and a personal number. Car loans in Sweden are secured: in the event of non-payment, the car may be repossessed. Interest rates on such loans vary depending on the borrower's credit history.

Transaction formalization: Payment for a car, whether new or used, usually occurs via bank transfer. When buying a car, it's important to consider additional expenses, such as registration fees and insurance.

Cash usage

Cash usage is gradually declining in Sweden, and the country is moving toward a "cashless society." For large purchases, such as real estate or a car, cash payment is almost impossible.

Real estate: All financial transactions when purchasing real estate, including the down payment and remaining amount, are usually conducted via bank transfer. This requirement is due to strict regulations aimed at preventing money laundering. In most cases, the buyer is required to use banking channels for fund transfers.

Car: While buying a car with cash is technically possible, it is not standard practice. Most dealers and private sellers prefer bank transfers for safety and convenience. Cash amounts, especially large ones, may raise suspicions and require additional checks.

Therefore, cash payments in Sweden are possible only in some situations for small purchases, but for large transactions, a bank transfer is almost always required.

In Sweden, there are several options for saving and investing suitable for both locals and foreigners.

Savings accounts

   - Regular savings accounts offer low but stable income, which can range from 0% to 4% per annum. The money in such accounts is protected by a government guarantee fund, making them the safest option for those who do not want to take risks.

   - Fixed-rate accounts allow for higher returns but require funds to be locked for a specific period, such as 6 months or a year.

Investment accounts 

   Investment savings accounts (ISK) are a flexible way to invest in stocks, bonds, and other assets with tax benefits. The main advantage is the simplified tax process, as taxes are levied at a fixed rate on the total value of assets rather than on each transaction. This is a popular instrument for long-term investments in Sweden.

Funds

   Funds are collections of assets managed by professional managers. They may include stocks, bonds, and other securities. Stock funds have higher risk but potentially higher returns. For low-risk investors, bond funds are suitable as they provide stable income but with lower returns.

Stocks

   Direct purchase of stocks through online brokers, such as Avanza or Nordnet, is a way to access the Swedish and international stock market. Investing in stocks can be risky but offers the possibility of higher returns compared to traditional savings.

Bonds

   Bonds, both government and corporate, are low-risk investments that provide stable income in the form of interest. These instruments are often included in portfolios for diversification and risk reduction.

In Sweden, foreigners, both residents and non-residents, have certain tax obligations depending on their status, type of income, and duration of stay in the country.

Income tax

Foreigners residing and working in Sweden are required to pay income tax. It consists of a municipal tax (approximately 29–35%) and a state tax on income exceeding a certain threshold. The state tax is an additional 20% for income over 689,300 Swedish kronor per year. If more than 90% of your income is earned in Sweden, you may qualify for standard tax deductions.

Special tax for non-residents 

For foreigners living outside Sweden but working in the country, there is a special non-resident income tax of 25%. This tax is levied on income from work in Sweden without the need to file a tax return unless the foreigner claims deductions or allowances.

Capital gains tax

Foreigners owning assets in Sweden, such as property or stocks, must pay a capital gains tax of 30% on profits from their sale. It is important to keep accurate records of acquisition and improvement costs for proper tax calculation.

VAT 

Sweden applies a value-added tax (VAT) of 25% on most goods and services. There are also reduced VAT rates of 12% on food and 6% on certain cultural events and transportation.

Foreigners working or owning assets in Sweden must consider these tax obligations to comply with the law and avoid penalties.

Tax declaration for foreigners in Sweden depends on their status—residents or non-residents, as well as the type of income.

Who must file a tax return?

Foreigners are required to file a tax return if they:

- Reside in Sweden for more than six months (tax residents).

- Work in Sweden for a Swedish or foreign company.

- Receive income from renting or selling assets in Sweden.

Types of income subject to declaration

All residents of Sweden must declare their worldwide income, including income from other countries. Non-residents declare only income received in Sweden, such as salary, rental income, investments, and capital gains. It's important to note that Sweden has double taxation agreements with many countries, allowing avoidance of double taxation.

Tax return filing process

The return is usually filed by May 2nd each year for the previous tax period. It can be done in several ways:

- Electronic filing via the Skatteverket tax agency website or mobile app (www.skatteverket.se ). A Swedish BankID is required for this.

- Paper form, which is sent by mail.

- Assistance from a tax consultant for complex cases, especially if there is foreign income or a need to apply international tax treaties.

- Via SMS to the tax agency's phone number, indicating a unique code that comes with the declaration.

Deductions and benefits

Some foreigners may qualify for deductions, such as moving expenses, mortgage interest payments, or travel expenses home, if housing is maintained in another country. In some cases, discounts on social contributions paid outside Sweden can also be obtained.

Special tax for non-residents

For those who live outside Sweden but work here, a special tax for non-residents (SINK), which is 25%, applies. The declaration is filed only for income received in Sweden, without additional benefits and deductions.

Thus, tax filing for foreigners in Sweden is relatively simple, especially if using the electronic services of the tax authorities. It is important to file returns on time; otherwise, a fine is charged for delay.

In Sweden, self-employed individuals and freelancers have several rules and benefits that can help organize their activities. Here are the main points to consider:

Registration and taxation

To work as a self-employed person or freelancer in Sweden, you need to register with the Skatteverket tax agency (www.skatteverket.se ) and obtain an F-tax certificate. This certificate confirms that you pay taxes independently, and clients do not withhold taxes from your compensation.

Taxes and social contributions

Self-employed individuals pay income tax as well as contributions to the social security system. These contributions cover pensions, medical expenses, and childcare benefits. Taxes are paid monthly in the form of preliminary tax payments based on the estimated profit that needs to be declared before the start of the year. At the end of the year, adjustments are made based on actual profit.

Tax deductions and benefits

Freelancers and the self-employed can claim a wider range of tax deductions compared to employees. For example, you can deduct home office expenses, travel expenses, and other business-related costs. This helps reduce the taxable base and lowers the overall tax.

Intellectual property rules

In Sweden, the rights to creative works, such as designs, text or program code, by default belong to the creator. However, a contract with the client can be concluded that redirects these rights to the customer. This is especially important for creative freelancers.

Insurance and social guarantees

Freelancers do not have access to mandatory insurance programs or unemployment benefits but can take out voluntary insurance. This helps offset potential risks associated with the absence of an employer paying insurance contributions.

Thus, self-employment and freelancing in Sweden offer flexibility in work and the ability to reduce tax liability through deductions but require clear organization of tax and social contributions.