Proposal: Lowered Minimum Share Capital in Swedish Private Limited Companies

In October 2007 the Swedish Government initiated an investigation concerning the minimum share capital in private Swedish limited companies as a part of a general drive to simplify the rules applicable to smaller companies and to strengthen their competitive powers.

A report has now been presented as “Aktiekapital i privata aktiebolag, SOU 2008:49”

Today the minimum share capital of a private Swedish limited company is SEK 100,000. The main proposal in the report is to lower this amount to SEK 50,000. This level would enable increasing numbers of minor entrepreneurs to carry on their business activities in limited companies but at the same time ensure that a certain amount of money is needed to start and to operate a limited company.

As an alternative it is proposed that only a quarter of the share capital need to be paid in immediately with the remaining amount being paid later. If this proposal is introduced in the Swedish Companies Act together with the decrease of the minimum capital to SEK 50,000 , it would mean that only SEK 12,500 would be needed in order to start a Swedish private limited company. At present exchange rates this corresponds to about US$ 2,100 or € 1,350.

Swedish public limited companies will still need to have a share capital of not less than SEK 500,000.