UNIKBOKSole trader or limited company in Sweden?
Enskild firma vs aktiebolag 2026 – compare tax, liability and admin, and calculate on your own profit
Choosing between a sole trader business (enskild firma) and a limited company (aktiebolag, AB) affects your tax, your personal liability and how much administration you get. In short: a sole trader business often suits you when you are starting out and the profit is moderate. A limited company often suits you when the profit is high, when the business carries financial risk or when there are several owners. Use the calculator below to compare what you keep privately under the 2026 rules.
Calculate on your own profit
More settings and 3:12
The comparison applies to an active sole trader business and an AB where you own 100 % qualified shares. The default values assume ownership at the start of the year, no other salary and no saved or salary-based dividend room. Pension or sickness compensation that gives specially reduced contributions is not included.
| Per year | Sole trader | Limited company |
|---|---|---|
| Profit before the owner's salary and contributions | SEK 700,000 | SEK 700,000 |
| Self-employment / employer contributions | SEK 137,093 | SEK 131,964 |
| Income tax on profit / salary | SEK 108,936 | SEK 80,508 |
| Corporate tax 20.6 % | – | SEK 30,495 |
| Tax on the dividend scenario | – | SEK 23,508 |
| Total taxes and contributions | SEK 246,029 | SEK 266,476 |
| Private net amount from the business | SEK 453,972 | SEK 433,524 |
| Left in the company before any future withdrawal tax | – | SEK 0 |
The sole trader business gives SEK 20,447 more in private net amount with these assumptions.
The profit left in the company is shown separately and is not added to your private net amount. Future salary or dividends can give further tax. The comparison alone therefore does not decide which legal form suits you best.
Budget estimate using the Swedish Tax Agency’s 2026 monthly tables times twelve, not a full final tax calculation. Tax allocation reserves, expansion funds and interest allocation are not included. Extra AB costs are only included if you enter them above.
The dividend is a separate scenario under the 2026 rules. It requires distributable equity according to an adopted balance sheet, a decision at the general meeting and that the dividend is prudent. A dividend decided in 2027 must be calculated with the 2027 rules.
Open the detailed tax calculation (in Swedish) →Sole trader and limited company – side by side
| Sole trader (enskild firma) | Limited company (aktiebolag) | |
| Legal person | No – you and the business are the same person | Yes – the company is its own legal person |
| Capital required to start | None | At least SEK 25,000 in share capital (private AB) |
| Registration | F-tax with the Swedish Tax Agency; registration with Bolagsverket is optional in most cases | Bolagsverket (Swedish Companies Registration Office) and the Swedish Tax Agency |
| Liability for debts | Personal and unlimited | The company is liable; owners as a rule only risk the capital invested |
| Tax on profit | Income tax and self-employment contributions (egenavgifter) on the whole profit | 20.6 % corporate tax; salary and dividends taxed with the owner |
| Taking money out | Private withdrawals at any time – they do not affect the tax | Salary or dividend; borrowing from your own AB is as a rule not allowed |
| Year-end work | Annual accounts (often simplified) and the NE form in your own tax return | Annual report filed with Bolagsverket, annual general meeting and INK2 return |
| Audit | Not required | Required only above the size limits – most small companies can opt out |
| Pension basis | The profit is pensionable | Only salary is pensionable, not dividends |
Tax on the profit – marginal effect 2026
| Sole trader | Limited company | |
| Below the breakpoint | Municipal income tax with basic allowance and tax reductions; self-employment contributions on top, and they are deductible | Salary taxed with the owner; 20.6 % corporate tax on the profit after salary costs |
| Above the breakpoint | 20 % state income tax on the part above the breakpoint, on top of municipal tax | Qualified shares within the threshold amount: corporate tax plus dividend tax 36.48 % in total |
| Money left in the business | Taxed according to the taxable profit; tax allocation reserves and interest allocation can affect it | Only corporate tax now; later salary or dividend can give further tax with the owner |
When does a sole trader business suit you?
A sole trader business (enskild firma) suits you when you start on your own, want to get going quickly and cheaply and expect a moderate profit. There is no capital requirement, the administration is simpler and you prepare annual accounts and an NE form in your own tax return instead of an annual report and an annual general meeting. You can withdraw money whenever you like.
You are personally liable for the debts. Private withdrawals do not decide the tax: the taxable profit is taxed even if you keep the money in the business. Tax allocation reserves (periodiseringsfond), expansion funds and interest allocation can affect the tax; they are not included in the calculator.
When does a limited company suit you?
A limited company (aktiebolag) suits you when the profit grows, when you want to leave profit in the company to grow, when the business carries financial risk or when several people will own the company together. Corporate tax is 20.6 %, and dividends on qualified shares within the threshold amount (gränsbelopp) are taxed at 20 % under the 3:12 rules. The basic amount for 2026 is SEK 322,400 for all shares in the company, divided by ownership at the start of the year and limited if you own several companies.
A private AB needs at least SEK 25,000 in share capital, an annual report and an annual general meeting. The share capital is capital in the company that can be used in the business – not a fee. Registration, the annual report and any audit can add costs.
Tax – where the difference is greatest
In a sole trader business, the taxable profit is taxed after, among other things, the deduction for self-employment contributions. For 2026 the breakpoint for state income tax is SEK 660,400 for those under 66 at the start of the year and SEK 760,500 for those who have turned 66. Other salary counts too. Above the breakpoint, 20 % state income tax is added on the part above it. That is why there is no fixed profit level where an AB is always better.
In a limited company, salary and employer contributions are normally costs before corporate tax. The remaining profit is taxed at 20.6 %. A dividend on qualified shares within the threshold amount then gives 20 % tax with the owner: in total 20.6 % + 79.4 % × 20 % = 36.48 % of the profit before corporate tax. Money that stays in the company is not yet private money – later salary or dividends can give further tax.
Liability and risk
In a sole trader business you are personally and fully liable for the debts. In a limited company the company is liable, and as an owner you as a rule only risk the capital you have put in. The board can become personally liable in certain situations, for example if it does not draw up a control balance sheet when equity falls below half of the registered share capital. Banks also often ask for a personal guarantee for loans to new limited companies.
Starting a business in Sweden as a newcomer
For a sole trader business you need a Swedish personal identity number (personnummer) or a coordination number (samordningsnummer), and you apply for F-tax via Verksamt.se. A limited company is registered with Bolagsverket and gets its own organisation number. If board members or the managing director live outside the EEA, special residency rules apply – check them with Bolagsverket before you register.
Whichever form you choose, the bookkeeping must follow Swedish rules and the BAS chart of accounts. UNIKBOK can be used in English while the reports, VAT returns and tax files follow Swedish requirements.
Switching from sole trader to limited company
It is common to start as a sole trader and switch to a limited company when the business grows. You then start a limited company and transfer the business to it. Plan the switch around a year-end and review tax allocation reserves and other tax reserves before you switch.
Seven questions that decide the choice
How much profit do you expect per year? Do you need to take out the whole profit, or can part of it stay in the business? Does the business carry financial risk or large commitments? Will there be several owners? Do you have SEK 25,000 for share capital? Do you want to keep the administration as simple as possible? Do your assignments or contracts require a particular legal form?
Frequently asked questions: sole trader or limited company
What is the difference between enskild firma and aktiebolag?
An enskild firma is a sole trader business where you and the business are the same legal person, with personal liability for the debts. An aktiebolag is a limited company – its own legal person with at least SEK 25,000 in share capital, where the owners as a rule only risk the capital invested.
Which is best – a sole trader business or a limited company?
It depends on profit, risk and plans. A sole trader business often suits you at the start and with a moderate profit. A limited company often suits you with a higher profit, when profit should stay in the business or when the business carries risk.
At what profit does a limited company pay off?
There is no fixed profit limit. The 2026 breakpoint of SEK 660,400 (under 66 at the start of the year) applies to total earned income after the deduction for self-employment contributions, not directly to the booked profit. Other salary, dividend room, future withdrawals, pension and extra AB costs all affect the choice. Use the calculator with your own assumptions.
Do you pay less tax in a limited company?
It depends on how the profit is used and on your other income. Corporate tax followed by dividend tax within the threshold amount for qualified shares gives 36.48 % in total. Profit kept in the AB only has corporate tax now, but can be taxed again when you take it out.
Why is profit left in the AB not counted as private money?
The profit belongs to the company. After corporate tax, further tax can arise when you take it out as salary or dividend. That is why the calculator shows your private net amount and the profit left in the company separately.
Is it more expensive to run a limited company?
An AB normally has more administration through the annual report, the annual general meeting and sometimes an audit. You need at least SEK 25,000 as share capital, but that is capital in the company, not a fee. You can enter extra costs in the calculator.
Can a foreigner start a business in Sweden?
Yes. For a sole trader business you need a personal identity number or coordination number. A limited company can be owned by anyone, but special residency rules apply if the board members or managing director live outside the EEA.
Can I start as a sole trader and switch later?
Yes, that is common. You start a limited company and transfer the business when the profit grows or the risks increase.
How do I take money out of each form?
In a sole trader business you make private withdrawals, which do not affect the tax. In a limited company you take salary or dividends. As a rule you may not borrow money from your own limited company.
Can I have both a sole trader business and a limited company?
Yes. You can run a sole trader business and own a limited company at the same time. They are accounted for and taxed separately.
Which form gives the best pension?
In a sole trader business the profit is pensionable. In a limited company the salary is pensionable but dividends are not. A low salary and high dividends give a lower public pension.
Sources: the Swedish Tax Agency (amounts and rates 2026), the Swedish Companies Act and the 3:12 rules from 1 January 2026. Amounts apply to income year 2026. The calculator is a budget estimate using the monthly tax tables times twelve, not a final tax assessment. Tax allocation reserves, expansion funds and interest allocation are not included.
- Swedish Tax Agency – amounts and breakpoints 2026
- Swedish Tax Agency – self-employment contributions
- Swedish Tax Agency – 3:12 rules for income year 2026
- Verksamt.se – start and register a business
- Riksdagen – the Swedish Companies Act (aktiebolagslagen)
Whichever form you choose, you can run the bookkeeping in UNIKBOK in English – the NE form for sole traders, the annual report and INK2 for limited companies. Businesses registered within the last 6 months get 6 months free; others get 2 months free. After that 200 SEK a month excl. VAT, everything included, no lock-in.
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