As businesses grow, many owners begin to consider expanding internationally, yet it can be difficult to determine the best country for expansion. One country that businesses should consider is expanding and exporting to Sweden, which the World Bank Report says is the 14th easiest country for doing business.
There are several reasons why companies in the United States find it easy to do business in Sweden, with one of the most important being that English is widely spoken in the country. However, there are some things to understand before deciding to expand your business by exporting to Sweden.
4 Key Reasons for Doing Business in Sweden
1. Economic Growth
Sweden was able to avoid the financial problems that many other countries suffered during the recent economic crisis. Growth remains strong and economic experts predict that the gross domestic product (GDP) in Sweden will be at 2.6 percent in 2015. Unemployment is at 8.5 percent and industries expected to grow over the next few years include advanced manufacturing and engineering services along with information communications technology.
2. Market Opportunities
There are many market opportunities for US companies that export to Sweden. The country has had a long tradition of expertise in shipbuilding, mining, life sciences as well as engineering. There is an ongoing demand for products and services that increase productivity, such as IT products, safety, security equipment, and, like many countries, cyber security. Sweden is strongly committed to sustainability, so there are many opportunities for earth-friendly innovations. Sweden is an excellent test market for new technologies as citizens are open to new technology. English is widely spoken and the Swedish kroner is strong, making products produced in the US price competitive.
3. Business Challenges
Despite the fact that Sweden is ranked as one of the best countries for expansion, exporting to Sweden does not come without challenges. There is strong competition from developing countries for market share in Sweden, mainly because as members of the European Union, developing countries are given significant duty reductions in order to promote economic growth in those countries. The Value-added Tax Rate (VAT) is 25 percent on items exported into Sweden. In addition, Sweden has a high cost of living, resulting in much more expensive labor and high individual tax rates. In fact, individual tax rates and labor costs in Sweden are some of the highest in the world.
4. Business Culture
The Swedish put a significant amount of credence in punctuality so it is critical that those doing business in the country be on time for meetings and social engagements. If you must be late, it is very important that you call and let the person you are meeting know as tardiness is considered poor etiquette in Sweden. Swedish people tend not to be spontaneous, preferring to schedule and plan their activities. If you are invited to dinner at the home of a business colleague while working in Sweden, gifts are expected. Flowers, wine, cake or chocolate are appropriate gifts. If there are young children, small gifts should be brought for them as well.
Swedish companies have less hierarchy than other countries so that managers are more accessible to employees. With less chain-of-command, it is not unusual for an employee to take questions or concerns directly to the head of the company. Employees are permitted to take frequent breaks, known as “fika” throughout the day. Those breaks are sacred and it is not unusual for employees or managers to be unavailable during those times.
Even More Reasons to Sell to Sweden
1. Sweden itself has 9 million inhabitants, but if you include its neighbors and the Baltic Sea region, you end up with about 100 million consumers. Sweden’s central location makes it attractive as a base for call centers and distribution centers, as well as direct marketing activities.
2. Sweden has among the top standards of living in the world.
3. Sweden is known as a country of early adopters, both for products and trends. Many companies are using Sweden to try out new products and services before launching them on a larger scale.
4. US Foreign Policy has ranked Sweden as the top three most globalized countries in the world, using examples such as Volvo, Saab, Ericsson and IKEA.
5. Ever since the Vikings, the importance of trade is firmly engrained in the country.
6. Sweden is committed to exploiting new technology and the country invests a lot in research and development. This makes Sweden a good center for collaboration, research labs and innovation.
7. The country provides excellent opportunities for international networking and collaboration with its enormous pool of technical talent and excellent educational system.
8. Sweden ranks among the top recipients of foreign direct investment, with the majority being technology based.
9. Sweden has been called the most wired and wireless nation on earth where most people have a computer and use the Internet daily.
10. The following sectors are popular opportunities for exports: Computer Software, Travel & Tourism, Computer Hardware, Biotechnology, Automotive parts, Telecommunications services, Renewable Energy Equipment, Pollution Control Equipment, Drugs and Pharmaceuticals, Telecommunications Equipment, Security and Safety Equipment, Sports and Leisure Products.
Choose Sweden for Your Next Market Launch
For companies considering expansion globally, Sweden offers many excellent opportunities. However, it is important to know some of the challenges you may face and to understand the culture of the business people you will work with should you decide to begin exporting to Sweden. Swedish Translation Services can help you with your marketing message, website and product info to reach the Swedish customer.
Photo Credit: Stuart Miles – freedigitalphotos.net
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