Introduction
Sweden is where innovation meets balance. Home to global brands like Spotify and IKEA, it has produced one of the highest number of unicorns per capita in the world. Fun fact: Sweden ranks consistently among the top countries for innovation, sustainability, and quality of life.
With just over 10 million people, it combines a highly skilled workforce with strong digital infrastructure and near-universal English proficiency. Stockholm alone is considered one of Europe’s leading tech hubs.
Beyond its famous fika culture and 100,000+ lakes, Sweden is known for stability, transparency, and forward-thinking labor policies. For companies expanding into Scandinavia, Sweden offers not just market access, but a reliable foundation for long-term growth.
EOR & PEO Solutions in Sweden
If you’re looking to hire employees in Sweden without setting up a legal entity, using an Employer of Record (EOR) like Empleyo is the simplest and most compliant path forward. An EOR in Sweden acts as the official legal employer on your behalf, managing everything from payroll and HR administration to employment contracts and statutory employee benefits.
This model allows you to expand into Sweden quickly, while remaining fully compliant with local labor laws without the complexity or cost of registering a local entity.
What Is an Employer of Record in Sweden?
An Employer of Record Sweden (also known as an EOR provider) enables businesses to hire and onboard Sweden employees without having to incorporate in-country. The EOR manages:
- Employment contracts in Sweden
- Monthly payroll and tax filings
- Statutory benefits in Sweden (like social insurance and leave)
- Ongoing HR and compliance responsibilities
What’s the Difference Between EOR and PEO?
A Professional Employer Organization (PEO) typically supports businesses that already have a registered entity in Sweden, offering co-employment solutions for HR, payroll, and benefits. An EOR, however, is ideal when you don’t have a legal presence in Vietnam but still want to hire full-time staff.
Whether you choose an EOR or PEO depends on your Sweden hiring strategy, budget, and long-term plans for the market.
Benefits of Using an EOR Service in Sweden
- Hire employees in Sweden faster, with no setup delays
- Stay compliant with Swedish labor and tax laws
- Avoid the cost of forming and maintaining a local entity
- Access local expertise in employment law and payroll in Sweden
- Simplify HR management while maintaining control over your team
By using an EOR solution, companies can confidently build their team in Sweden, access top talent in Sweden, and stay focused on business growth without getting tangled in bureaucracy.
Hiring in Sweden
Sweden is a thriving market with a growing pool of skilled professionals, making it an ideal destination for businesses looking to expand globally. But to hire in Sweden successfully, it’s important to understand your options especially when you don’t have a legal entity in Sweden.
That’s where using an Employer of Record in Sweden makes all the difference.
Your Hiring Options in Sweden
Businesses have two main paths to hire employees in Sweden:
- Register a local entity, manage payroll and HR directly, and take on full legal responsibility.
- Use an Employer of Record (EOR) a third-party EOR provider that acts as the legal employer in Sweden on your behalf.
The second option is faster, lower-risk, and ideal for companies that want to test the Swedish market, launch quickly, or hire remote employees without permanent infrastructure.
Why Use an EOR to Hire in Sweden?
- Drafting and executing employment contracts in Sweden
- Managing Sweden payroll and mandatory contributions
- Handling employee benefits as required under Swedish labor law
Employment in Sweden
Understanding how employment in Sweden works is key to managing your team successfully and staying compliant. Whether you’re hiring directly or using an Employer of Record (EOR), companies must follow Swedish labor laws closely especially when it comes to employment contracts, payroll, and employee benefits.
That’s why many growing businesses choose to use an EOR in Sweden to handle these responsibilities with confidence.
Employment Contracts in Sweden
In Sweden, employment agreements do not legally have to be signed before work begins. However, employers are required to provide written information about the key terms of employment no later than seven days after the employee starts work, in accordance with the Swedish Employment Protection Act (LAS).
The written terms must clearly outline the job role, salary, benefits, working hours, start date, workplace, notice periods, and other essential conditions. While many contracts are signed before the first day, the law focuses on providing written employment terms rather than requiring a formal signed contract.
Employment conditions must also comply with Swedish labor law and, where applicable, collective bargaining agreements (CBAs), which play a significant role in Sweden’s employment framework.
By working with a Sweden Employer of Record (EOR), companies can ensure that employment terms are compliant with local legislation and aligned with any applicable collective agreements, without needing to establish a local entity or build an in-house HR team.
Payroll & Employer Contributions
Payroll in Sweden involves more than paying a monthly salary. Employers must withhold income tax (PAYE) and pay statutory employer social security contributions.
Employer contributions (arbetsgivaravgifter) are generally 31.42% of gross salary for most employees. These contributions fund:
- Public pension
- Sickness insurance
- Parental leave benefits
- Work injury insurance
- Unemployment insurance
- General payroll tax
Sweden has a public healthcare system funded primarily through taxation, so there is no separate mandatory “health insurance contribution” line item as seen in other jurisdictions.
Employers must submit monthly payroll reports to the Sweden Tax Agency (Skatteverket) and pay both withheld taxes and employer contributions on time to remain compliant.
An Employer of Record (EOR) in Sweden manages payroll processing, tax withholdings, statutory contributions, and reporting, ensuring full compliance without requiring you to establish a local entity.
Employee Benefits and Leave
Swedish labor law provides strong statutory protections and employee benefits. Key entitlements include:
- Annual Paid Leave – Employees are entitled to a minimum of 25 paid vacation days per year under the Annual Leave Act.
- Sick Leave – Employers pay sick pay for the first 14 days (after a qualifying day deduction). Thereafter, the Swedish Social Insurance Agency takes over payments.
- Parental Leave – Parents are entitled to up to 480 days of paid parental leave per child, funded primarily through the social insurance system.
- Public Holidays – Sweden observes several public holidays. While not separately regulated as a statutory paid benefit, employees are generally entitled to time off according to their employment terms or collective agreement.
- Occupational Pension (Often via CBA) – While not strictly mandated by law, most employees receive occupational pension contributions through collective bargaining agreements (CBAs).
Using an employer of record service ensures your team in Sweden receives all required benefits and that your business remains fully compliant with Swedish employment law.
Termination & Notice Periods
Ending an employment relationship in Sweden is strictly regulated under the Employment Protection Act (LAS).
Termination must be based on objective grounds, such as redundancy (lack of work) or personal reasons (e.g., misconduct). Employers cannot terminate employment “at will.”
Notice Periods
Notice periods depend on the employee’s length of service and may also be governed by collective bargaining agreements (CBAs).
Under Swedishlaw, employer notice periods range from 1 to 6 months, depending on tenure. Employees typically have a minimum one-month notice period.
Severance Pay
Sweden does not mandate automatic statutory severance pay. However, employees are entitled to salary and benefits during the notice period. Additional compensation may apply in cases of unlawful termination or under specific CBAs.
Because Sweden has strong employee protections and union influence, terminations must be carefully documented and properly managed.
An Employer of Record (EOR) in Sweden ensures lawful termination procedures, correct notice handling, salary continuation, and compliance with local regulations, reducing legal risk while protecting your expansion strategy.
Visas & Permits in Sweden
If you plan to hire employees in Sweden or relocate foreign talent, understanding Sweden’s work permit framework is essential.
In Sweden, non-EU/EEA nationals generally require a work permit before starting employment. EU/EEA citizens can work freely without a permit.
Work permits are employer-sponsored and must meet specific requirements:
- A formal job offer before application
- Salary aligned with Sweden collective agreements or market standards
- Minimum salary threshold requirements
- Valid health insurance, pension, and employment terms
- Applications are submitted to the Swedish Migration Agency (Migrationsverket) and must typically be approved before the employee enters Sweden to work.
- A formal job offer before application
- Salary aligned with Swedish collective agreements or market standards
- Minimum salary threshold requirements
- Valid health insurance, pension, and employment terms
Applications are submitted to the Swedish Migration Agency (Migrationsverket) and must typically be approved before the employee enters Sweden to work.
Common Residence & Work Permit Categories
- Work Permit (Employment-Based) – For non-EU professionals hired by a Swedish employer
- EU Blue Card – For highly skilled workers meeting salary thresholds
- Intra-Company Transfer (ICT) Permit – For employees transferred within a global company
- Self-Employment Residence Permit – For entrepreneurs starting a business in Sweden
Sweden does not have a formal “digital nomad visa” program.
Because work permits are tied to the employing entity, companies without a Swedish legal presence cannot directly sponsor employees.
An Employer of Record (EOR) in Sweden enables you to legally hire and sponsor foreign talent without setting up a local entity, ensuring contracts, salary levels, and permit applications meet all regulatory standards.
This removes immigration friction from your expansion strategy.
Business Permits for Foreign Companies
Foreign companies that want to operate directly in Sweden typically need to register a legal entity or branch with the Swedish Companies Registration Office (Bolagsverket).
Sweden does not require a general business license** for most industries. However, certain regulated sectors (e.g., finance, healthcare, transport) may require specific permits.
To hire employees directly, a company must:
- Register with the Swedish Tax Agency (Skatteverket)
- Obtain F-tax approval
- Register as an employer
- Comply with Swedish labor laws and, where applicable, collective bargaining agreements
There are no broad foreign investment approval requirements in most sectors.
Why Visas & Permits Matter for Global Hiring
If you’re hiring foreign employees in Sweden, or placing international staff in-country, it’s essential to stay compliant with immigration laws. The right employer of record service helps you:
- Avoid visa delays or permit denials
- Ensure alignment with Swedish employment law
- Quickly hire and onboard top talent without risk
- Operate legally, even without a registered entity in Sweden
Common Questions on EOR in Sweden
This is a critical question for companies expanding into Sweden.
Using an Employer of Record (EOR) in Sweden does not automatically create a permanent establishment. However, PE risk depends on the employee’s activities.
If your employee in Sweden is:
- Signing contracts on behalf of your company
- Generating core revenue locally
- Acting as a dependent agent
You may trigger corporate tax exposure.
A strong EOR solution helps structure roles properly and align employment models to reduce unintended PE risk, especially for companies testing expansion into Sweden or the broader Nordic region.
Yes, and this is increasingly common.
Swedish labor law does not favor misclassification. If contractors operate like employees (fixed hours, reporting structure, exclusivity), the risk of reclassification increases.
Using an Employer of Record in Sweden allows companies to:
- Transition contractors into compliant employment
- Issue Swedish employment contracts
- Align with collective bargaining requirements where applicable
- Ensure full compliance with local regulations
This is often the safest path for companies building a distributed team in Sweden.
With a local entity, hiring timelines depend on company registration, tax setup, and payroll infrastructure.
Using an EOR in Sweden, companies can often start hiring within days, not months.
An EOR provider already has:
- A registered legal employer
- Payroll infrastructure
- Compliance frameworks in place
This significantly accelerates expansion into Sweden, especially for companies testing market demand before committing to entity formation.
Sweden regularly updates employment regulations, tax rules, and collective agreement standards.
When you hire directly, monitoring these changes becomes your responsibility.
With a Sweden Employer of Record, compliance monitoring is built into the service. The EOR handles updates related to:
- Taxes and social security thresholds
- Salary minimums tied to permits
- Collective bargaining adjustments
- Regulatory reporting changes
This reduces long-term compliance exposure, particularly for foreign employers unfamiliar with Swedish labor law.
Yes, and this is where strategy matters.
Some companies assume an EOR is only for hiring one remote employee.
In reality, many companies use an Employer of Record in Sweden to build entire market-entry teams before deciding whether to set up a local entity.
An EOR solution allows you to:
- Hire multiple employees
- Build sales or operational teams
- Test product-market fit
- Expand across the Nordic region
All without setting up a legal entity prematurely.
When scale justifies incorporation, the transition can be structured deliberately, not reactively.
Scandinavia combines innovation, stability, and digital maturity. Sweden acts as a gateway to the Nordic region, offering access to highly skilled talent and sophisticated markets.
But expansion here requires structure.
Using an Employer of Record in Sweden allows you to hire quickly, stay compliant, and test the market without setting up a local entity, so you can scale across the Nordics with confidence.
