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 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 in Sweden.
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.
There are many market opportunities for US companies to expand into 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.
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, the individual tax rates and labor costs in Sweden are some of the highest in the world.
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.
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.
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