PEO Sweden & Employer of Record - A Fresh Road to Expansion
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PEO in Sweden

Hire Globally, Pay Locally, Expand Effortlessly

Widely known as one of the best countries to do business in and with a solid reputation for building worldwide brands, Sweden is an ideal place to start your new business venture.
Thinking of expanding your business to Sweden?

INS Global is a professional employment organization (PEO) and a market leader for PEO and other HR services in more than 80 countries across the globe.

Having a partner who understands the market challenges and can offer you help to get started accelerates your market entry and reduces problems.

Want to have a Team in Sweden TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Want to have a Team in Sweden TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

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PEO in Sweden - Summary

Advantages of a Sweden PEO

Fast market access

Incorporating a legal entity in Sweden may take longer than anticipated, and a rigorous process needs to be followed to ensure you remain compliant. A PEO allows for faster market access, meaning your business can get set up and start generating revenue quicker.

Guaranteed compliance

When setting up your legal entity in Sweden, you become liable for the entire setup process and all related business actions. This means that your company needs to stay updated with all employment laws in Sweden. An international PEO company can provide an alternative way to operate in the country while avoiding costly liabilities.

Savings on costs

Depending on your business needs, a PEO is likely more cost-effective than setting up your own legal entity. Many companies choose to use a PEO because it requires a lot less time, resources, and staffing to maintain.

Scaling is simple

Whether you wish to hire more staff in Sweden or you want to reduce the size of your operation to save costs, using a PEO company makes scaling easy.

Organizatonal Optimization

A professional HR outsourcing partner allows your staff to focus on what matters without exerting the effort required to take care of HR. It also gives you access to a while new range of skills and capabilities without needing to expand your team.

Should You Set up Your Own Entity or Use a PEO in Sweden?

More companies worldwide are starting to use PEO services as an alternative means of company incorporation. For SME’s and companies wishing to try out the market flexibly, a PEO option provides an ideal choice, combining flexibility with stability.

Companies currently partner with PEO services providers over setting up their own separate entities for many reasons. Based on your business needs, targets, and long-term goals, it’s easier to determine the right choice for you.

Hiring an Overseas Employee

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

5/5

How Does a Swedish PEO Work?

  1. You first provide us with the project details and business requirements.
  2. With this information, our consultants can provide recommendations on the most suitable method for market entry.
  3. Based on the kind of agreement you prefer, we can hire your staff on behalf of your enterprise and onboard them through our PEO.

INS Global ensures proper onboarding and administrative procedures for all of your employees, who will be immediately eligible to work and carry out your operations legally in Sweden.

A PEO vs. an EOR

PEOs are often discussed in the same way an EOR (Employer of Record) in terms of HR outsourcing solutions. However, there are key differences in how these two services offer these services.

  • A PEO offers HR functions to employees of other companies, while an EOR legally and officially hires those employees on behalf of another company.
  • EORs take on all legal responsibilities related to the employee, while PEOs operate as third-party service providers.

INS Global offers both EOR and PEO services in Sweden. Contact our team of PEO specialists today to discuss your needs and determine which service may be best for you.

Labor Law in Sweden

The most significant feature of the labor market in Sweden for international employers is that it is regulated by employer organizations and trade unions more than by government intervention. Many terms and conditions in an employment agreement are regulated through laws and regulations in collective bargaining agreements.

An employment agreement between an employer and an employee in Sweden does not have to be in written form to be valid.

Working Hours in Sweden

In general, standard working hours cannot exceed 40 hours per week, and overtime cannot exceed 50 hours in a calendar month.

Overtime pay can be agreed upon through an individual agreement or an applicable collective bargaining agreement.

Sweden's Holiday Policy

According to statutory provisions, employees are entitled to at least 25 days of paid holiday each year. Employees can take 20 of these days over a continuous vacation period in the summer months (June, July, and August).

Employees become eligible for the paid holiday after working for a year. In addition to the 25 days of statutory annual leave, there are 13 public holidays in a calendar year. Generally, employees are given paid leave during public holiday periods.

Sick Leave in Sweden

In the case of illness or serious injury that affects the employee’s ability to work, the employee is eligible for paid time off. According to Swedish law, the first day of illness or injury is generally unpaid and is considered a “qualifying day.”

From day 2 up until and including day 14, an employer is responsible for paying the employee 80% of their standard wage.

Maternity and Paternity Leave in Sweden

Sweden has one of the most generous policies regarding parental leave globally. In Sweden, parents are entitled to a continuous period of at least 7 weeks of leave before the expected date of birth and 7 weeks after.

In addition, for a home with two parents, each parent is entitled to 240 days of paid parental leave, cumulatively amounting to 480 days. For single-parent households, the caregiver is entitled to a full 480 days.

Tax Law in Sweden

Tax residents in Sweden are taxed via a local tax, known as Municipal Income Tax, which ranges between 29.08% and 35.15% annually, depending on the specific municipality. For those who earn above 540,700 Swedish kronor (SEK), they must pay an additional 20% for National Income Tax.

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.

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