# What is Aktiebolag (AB, Swedish Limited Company)?

Country: Sweden

An Aktiebolag (AB) is a Swedish limited company, the most common business structure for entrepreneurs and SMEs. Minimum share capital is SEK 25,000. The AB is registered with Bolagsverket and is a separate legal entity with limited shareholder liability. At least one director must be resident in the EEA.

## Current rate (Inkomstår 2025)

20.6% bolagsskatt on profits

## Example

A freelance consultant incorporates an AB with SEK 25,000 share capital, registers on verksamt.se, and receives an organisationsnummer within 1-4 weeks. She takes a salary from the AB and distributes additional profits as dividend under the K10 rules.

## How Aktiebolag (AB, Swedish Limited Company) works in Sweden

The Aktiebolag (AB) is Sweden's standard corporate vehicle, roughly equivalent to a UK Limited Company, a German GmbH, or a Dutch BV. It offers limited liability, clear tax planning opportunities (especially via the 3:12 rules), and is the preferred structure once a business generates meaningful profits.

**Formation requirements**

To form a private AB (privat aktiebolag), you need:
- Minimum share capital of SEK 25,000 (fully paid up at formation)
- A board of directors (styrelse) with at least one member and one deputy (suppleant), OR at least three members without deputies
- At least one board member (and the MD if separate) must be resident in the EEA
- Articles of association (bolagsordning) setting out company name, business purpose, share capital range, and number of shares
- Registration with Bolagsverket and payment of the registration fee (approximately SEK 2,200 for e-registration, SEK 3,700 for paper)

Registration is done via verksamt.se (the government's business registration portal) or directly via Bolagsverket. Electronic registration typically takes 1-5 business days; paper can take several weeks.

**The organisationsnummer**

Upon registration, the AB receives a 10-digit organisationsnummer (format: XXXXXX-XXXX). This is used on all invoices, tax filings, and commercial documents.

**Annual compliance**

Once formed, an AB must:
- File an annual report (årsredovisning) with Bolagsverket within 7 months of the financial year end (or 6 months for larger ABs)
- Hold an annual general meeting (bolagsstämma) within 6 months of the year end to approve the accounts
- File Inkomstdeklaration 2 with Skatteverket (corporate income tax return)
- File momsdeklarationer and arbetsgivardeklarationer (if employing staff)

**Auditor requirement**

Small ABs (below two of three thresholds: 3 employees, SEK 1.5m balance sheet, SEK 3m net turnover) can dispense with a statutory auditor (revisor). Most single-founder consulting ABs qualify for the exemption, saving the approximately SEK 15,000-30,000 annual revisor cost.

**Why choose an AB over enskild firma?**

The AB becomes advantageous when annual profits consistently exceed approximately SEK 400,000-500,000. At that point, the combination of 20.6% bolagsskatt plus the preferential 20% tax rate on dividends within the K10 gränsbelopp produces a materially lower effective tax rate than the progressive personal income tax (up to 52%) on enskild firma profits.

**Public vs private AB**

The standard AB is a privat aktiebolag (private). A publikt aktiebolag (publ) can offer shares to the public and list on a stock exchange; it requires a minimum share capital of SEK 500,000 and additional governance requirements.

Source: https://bolagsverket.se/foretag/aktiebolag.html

## Related terms

- [Bolagsskatt (Swedish Corporate Tax)](https://accounts-os.com/se/glossary/bolagsskatt-se)
- [K10/K12 Forms and the 3:12 Rules](https://accounts-os.com/se/glossary/k10-k12-se)
- [Arbetsgivaravgifter (Swedish Employer Social Contributions)](https://accounts-os.com/se/glossary/arbetsgivaravgift-se)
- [Skatteverket (Swedish Tax Agency)](https://accounts-os.com/se/glossary/skatteverket-se)