Going north

DENMARK FINLAND NORWAY SWEDEN Nordic States Almanac 2018

Heading up north

„If investment is the driving force behind all economic development and going cross-border is now the norm on the European continent, good advisors provide both map and sounding-line for the investor.”

Rödl & Partner

„We also invest in the future! To ensure that our tradition is preserved, we encourage young talents and involve them directly into our repertoire. At first, they make up the top of our human towers and, with more experience, they take responsibility for the stability of our ambitious endeavours.”

Castellers de Barcelona

3 Table of contents A. Introduction 6 B. Map 8 C. Countries, figures, people 9 I. Demographics 9 II. Largest cities 11 III. Country ratings 12 IV. Currencies 16 IV. Norway and the EU 16 VI. Inflation rates 17 VII. Growth 18 VIII. Major trading partners 19 IX. Transactions with Germany 22 X. Overview of public holidays in 2018 23 D. Law 27 I. Establishing a company 27 II. Working 35 III. Insolvency – obligations and risks 47 IV. Signing of contracts 50 V. Securing of receivables 54 VI. Legal disputes 57 E. Taxes 65 I. Tax rates 65 II. VAT – obligation to register for VAT 68

4 III. Personal income tax – tax liability for foreign employees 72 IV. Corporate income tax – criteria for permanent establishment (national) 74 V. Tax deadlines 75 VI. Transfer pricing 78 F. Accounting 84 I. Submission dates for annual financial statements 84 II. Contents / Structure of annual financial statements 85 III. Acceptable accounting standards 86 G. Audit 87 I. Statutory audit requirement – criteria 87 H. Key contacts 89 I. Chambers of Commerce 89 II. Rödl & Partner 90 I. Own contacts and notes 91

5 A. Introduction

Dear readers,

In a time when Europe is facing political challenge and economic recovery, one region never fails to tender stability, wealth and confidence: the Far North. Having formed one economic neighborhood long before the European Union found its integrative force, Norway, Sweden, Finland and Denmark are certainly the most affluent and inviting business environments the Old Continent has on offer, all under the hugely successful brand of “the Nordics”.

Remarkable political and social permanence and a most welcoming, liberal culture have produced political currency that the Nordic countries know how to invest wisely, quietly leading the region with soft power and hard money. The Stockholm School of Economics remains a world-class teacher of free enterprise, shining well beyond Europe, the Scandinavian finance sector rules the lands with little competition, and the appeal of the Scandinavian way of life unobtrusively informs the development, especially in the Baltic States.

And yet the Nordic countries are far from being self-reliant. Export-driven like few others, they connect well to both Germany and the Anglo-American world in trade and direct investment, and need the influx of know-how and capital on many levels. In recent years, old ties across the Baltic Sea have been patiently rebuilt, Finland has turned itself into a gateway to Russia, Swedish banks cover the Baltics for Europe, and the impressive Oresund Bridge that links Malmö and Copenhagen has given new meaning to the European adage of “regional integration”.

6 The Far North is an innovative region that remains impervious to the current political antics. The constantly growing needs in construction and infrastructure, the exquisite conditions for research and development, the everexpanding IT sector or the rapidly changing energy markets are just a few reasons to take a closer look at the Nordic States.

We assist you with your investment plans, from opportunity and risk analysis to the implementation of your project.

This guide is here to help you on the first miles along the way – more advice is readily available, as we are at your service at any time.

With best regards, Jens Pastille Managing Partner for the Nordic and Baltic States

A 7 B. Map

Finland

Sweden

Norway Russia

HELSINKI OSLO STOCKHOLM

Estonia

Latvia Denmark Lithuania United COPENHAGEN Kingdom Belarus Russia

Germany Poland

8 C. Countries, figures, people

I. Demographics

Sweden Finland Denmark Norway

Population approx. 10 million approx. 5.50 million approx. 5.76 million approx. 5.26 million

Area 449,964 km� 390,908 km� 42,921 km� 385,186 km�

Population 24.5 inhabitants per km� 18 inhabitants per km� 133.4 inhabitants per km� 13.67 inhabitants per km� density

Gender Women: 49.8 % Women: 50.9 % Women: 50.2 % Women: 49.6 % distribution Men: 50.2 % Men: 49.1% Men: 49.8 % Men: 50.4 %

Age structure Ages 0 to 19: Ages 0 to 14: Ages 0 to 19: Ages 0 to 15: 2,290,606 (22.9 %) 890,103 (16 %) 1,306,388 (22.7 %) 1,000,025 (19.02 %) Ages 20 to 49: Ages 15 to 64: Ages 20 to 49: Ages 16 to 44: 3,917,166 (39.2 %) 3668 235 (66.1 %) 2,219,397 (38.5 %) 2,036,980 (38.7 %) Ages 50 to 69: Ages 65 and over: Ages 50 to 69: Ages 45 to 66: 2,383,790 (23.8 %) 988,165 (17.8 %) 1,455,365 (25.3 %) 1,455,310 (27.7 %) Ages 70 and over: Ages 70 and over: Ages 66 and over: 1,403,591 (14.1 %) 779,544 (13.5 %) 766,002 (14.6 %)

Living area Urban: 85 % Urban: 78 % Urban: 85 % Urban: 81 % Rural: 15 % Rural: 22 % Rural: 15 % Rural: 19 %

C 9 Sweden Finland Denmark Norway

Nationalities Swedes: Finns: 5,259,658 (95.2 %) Danes: Norwegians: 8,210,656 (82.15 %) 5,008,076 (86.9 %) Estonians: 44,774 (0.82 %) 4,374,566 (83.2 %) Finns: 153,620 (1.54 %) Russians: 30,757 (0.56 %) Turks: 63,040 (1.09 %) Poles: 108,255 (2.06 %) Syrians: 149,418 (1.49 %) Swedes: 8,382 (0.15 %) Poles: 45,822 (0.79 %) Swedes: 39,266 (0.75 %) Iraqis: 135,129 (1.35 %) Somalis: 7,465 (0.14 %) Syrians: 39,744 (0.69 %) Somalis: 41,463 (0.79 %) Poles: 88,704 (0.89 %) Chinese: 7,121 (0.13 %) Germans: 32,651 (0.57 %) Lithuanians: Iranians: 70,637 (0.71 %) 42,491 (0.81 %) Thai: 6,484 (0.12 %) Iraqis: 32,225 (0.56 %) Former Yugoslavs: Pakistanis: 36,700 (0.70 %) Iraqis: 6,353 (0.12 %) Romanians: 66,539 (0.67 %) 28,227 (0.49 %) Iraqis: 32,304 (0.61 %) Turks: 4,398 (0.08 %) Somalis: 63,853 (0.64 %) Lebanese: Germans: 27,593 (0.52 %) Indians: 4,372 (0.08 %) 26,550 (0.46 %) Vietnamese: British: 4,048 (0.07 %) Pakistanis: 22,658 (0.43 %) 24,936 (0.43 %) Others: 83,357 (1.53 %) Danes: 21,447 (0.41 %) Bosnians and Herzegovini- Filipinos: 22,892 (0.44 %) ans: 23,029 (0.40 %) Somalis: 21,175 (0.37 %) Others: 415,219 (7.25 %)

Unemployment 2014: 7.9 % 2012: 7.7 % 2014: 6.7 % 2014: 3.5 % rate 2015: 7.4 % 2013: 8.2 % 2015: 4.6 % 2015: 4.4 % 2016: 6.9 % 2014: 8.5 % 2016: 4.2 % 2016: 4.7 % 2017: 8.8%

Sources Statistics Sweden Eurostat, worldometers, Statistics Denmark Statistics Norway countrymeters

10 II. Largest cities

Sweden Finland Denmark Norway

City Inhabitants City Inhabitants City Inhabitants City Inhabitants

Stockholm 935,619 Helsinki 635,181 Copenhagen 1,295,686 Oslo 975,744

Gothenburg 556,640 Espoo 274,583 Aarhus 335,684 Bergen 252,772

Malmö 328,494 Tampere 228,274 Aalborg 211,937 Stavanger/ 213,313 Sandnes

Uppsala 214,559 Vantaa 219,341 Odense 200,563 Trondheim 177,617

Linköping 155,817 Oulu 200,526 Esbjerg 115,905 Fredrikstad/ 109,907 Sarpsborg

Väster�s 147,420 Turku 182,604 Vejle 113,243 Drammen 115,137

Örebro 146,631 Jyväskylä 138,850 Frederiksberg 105,037 Porsgrunn/ 92,001 Skien

Helsingborg 140,547 Lahti 119,452 Randers 98,118 Kristiansand 61,037

Jönköping 135,297 Kuopio 117,740 Viborg 96,477 T�nsberg 51,061

Norrköping 139,363 Kouvola 85,059 Kolding 92,282 �lesund 51,474

Source: Statistics Sweden Source: Statistics Finland Source: Statistics Denmark Source: Statistics Norway

C 11 III. Country ratings

Sweden Finland Denmark Norway

Country rating Aaa, Outlook: stable Aa1, Outlook: stable Aaa, Outlook: stable Aaa, Outlook: stable Moody’s

Country rating A1 A2 A2 A1 Coface In 2017, activity is expected In 2018, activity will slow down The slow rate of growth of Low oil prices led to a to slightly slow due to less slightly, although growth will exports and consumption in slowdown in activity in 2016 dynamic demand than in remain above potential. Private 2016 thwarted the expected because of reduction in oil 2016. Private consumption investment, although more acceleration in growth. In investments and weaker will be affected by slower moderate in 2018, will remain 2017, there is likely to be a private consumption. Growth wage growth and the one of the main contributors to moderate upturn in activity, is expected to be a little decline in unemployment growth, due to low interest driven by domestic factors. firmer in 2017, driven by (6.4 % in November 2016). rates, coupled with dynamic Household consumption will private consumption and However, this will remain domestic and external underpin growth thanks to investment in non-oil sectors. high due to the continuation demand. Higher capacity improvements in the labour Household consumption is of the Riskbank’s (Central utilization rate in the forestry market. In addition, expected to support Bank) accommodative and metallurgical industry investment will make a Norwegian growth because monetary policy as well as a would foster investment in positive contribution to of historically low interest significant immigration. these sectors. Investment in growth, sustained by rates (0,5 %) set by the The current account surplus research and development will increased consumption and a central bank and rising is set to remain stable in also be more dynamic relaxed monetary policy on property prices boosted by 2017, at a very comfortable following several years of the part of the Central Bank. easy access to credit. level. Imports will still be decline due to the deterioration Inflation is expected to Despite high household debt firm, buoyed by growing of mobile telephone services. increase in 2017 as a result of (220 % of disposable domestic demand, but will, Residential construction will the slow rise in oil prices income), the government’s nonetheless, be offset by support activity, due to strong alongside higher wages. The expansionary fiscal policy stronger exports due to the housing demand, particularly in Danish Central Bank’s relaxed can help to encourage moderate growth in demand the Helsinki area. In addition, monetary policy (policy public investment and from the country’s main the expansion of tourism will interest rates: 0 %; deposit household consumption. trading partners. However, a continue, driven by a growing rates: -0.65 % since slowdown in demand from influx from Russia and Asia, February 2015) is likely to

12 the United Kingdom (3rd attracted by preserved natural continue in the short term, Unemployment will stabilise largest trading partner) after sites and the northern lights. bearing in mind the low level (4.5 %), with a halt to oil Brexit could affect the trade Exports will continue to benefit of inflation and the pegging sector companies’ plans to balance through a decline in from the Competitiveness Pact, of the Danish krone to the lay off workers. The recovery exports. which reduced unit labour euro. The 2017 budget of investment in other The banking system will costs by 3.7% in 2017, includes measures aimed at sectors will also support the present a high risk as although wages are expected improving the healthcare economy, especially in household debt is high and to rise again in 2018. In system and the collection of shipbuilding and property prices are still rising addition, strong demand in the taxes as well as boosting aid construction. (danger of the bubble main partner countries for refugees and displaced bursting). (Sweden, the United States and persons from conflict zones Germany), as well as the (particularly the Middle East). economic recovery in Russia, The deficit as well as the would favour Finnish exports. public debt will therefore The dynamism of orders in the remain well below the shipbuilding industry and the threshold defined by the completion in 2017 of the European Stability and country’s largest wood process- Growth Pact (3 % and 60 % ing plant (paper, resin, of GDP, respectively). The bioenergy, etc.), will also business climate in the support exports. Thus, the country will be very positive contribution of trade to growth and ranks third in the Doing will be positive in 2018. Business 2017 survey behind Household consumption will be New Zealand and Singapore. more dynamic, driven by a slight rise in wages, in a context of moderate inflation, and by decreased unemployment (7.3% in October 2017). Low interest rates will also favor consumption, even if the weight of the debt (129% of disposable income) will still weigh on the financial situation of households.

C 13 Sweden Finland Denmark Norway

Corruption 88/100 89/100 90/100 85/100 perception index (CPI), (shared 4th place out of 176 (3rd place out of 176 (1st place out of 176 (6th place out of 176 where 0 countries) countries) countries) countries) means that a country is percieved as higly corrupt and 100 means it is perceived as very clean

Source: Transparency International, Report 2016

14 Sweden Finland Denmark Norway

Ranking of 138 countries

Competitiveness 19 10 12 11

Higher education and 12 2 6 7 training

Technological 4 16 11 7 readiness

Macroeconomic 17 46 18 1 environment

Institutions 11 1 15 5

Innovation 7 3 10 12

Business sophistication 7 11 9 10

Health & primary 20 1 21 11 education

Goods market 17 19 18 21 efficiency

Financial market 14 5 24 9 development

Labour market 20 23 13 9 efficiency

Market size 41 5 58 49

Source: The Global Competitiveness Report 2015-2016

C 15 IV. Currencies

Sweden Finland Denmark Norway

Currency SEK (Swedish Krona) EUR (Euro) DKK (Danish Krone) NOK (Norwegian Krone)

IV. Norway and the EU

General Norway is not a Member State of the European Union; however, Norway‘s economic and trade relations with the EU are mainly governed by the agreement on the European Economic Area (EEA).

Importing into the EU from Norway The EU uses trade defense instruments to re-establish a competitive environment for the EU industry when harmed by dumped or subsidized imports.

Exporting from the EU to Norway The European Commission monitors and assists affected EU industries when non-EU countries take trade defense measures against EU exporters. Customs duties (Norwegian: toll) shall be paid upon importation of goods. The “ordinary” rate of the customs tariffs applies for goods imported from countries with whom Norway has not entered into a free trade agreement (FTA) and for goods imported from a FTA-party, but not satisfying by the conditions for preferential tariff treatment as set out in these agreements.

Source: toll.no

16 VI. Inflation rates

4

3,5

3

2,5 Sweden

2 Norway

Finland 1,5

Denmark 1

0,5

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 -0,5

Source: http://www.inflation.eu/inflation-rates/cpi-inflation.aspx

C 17 VII. Growth

GDP Growth (in millions of US$)

700

600

500

Sweden 400 Norway

300 Finland

Denmark

200

100

0 2010 2011 2012 2013 2014 2015 2016 2017

18 VIII. Major trading partners Sweden

Import Export

Germany 10% Norway 19% Denmark 10% 30% Finland 39% UK 8% 7% The Netherlands Belgium 7% 7% 4% France

6% China 6% 5%

4% 5% 3% 5% Poland 4% 5% 8% 4% 5% Other countries

C 19 Finland

Import Export

Germany 15% 13% Sweden Russia 32% 11% China 11% 37% The Netherlands France 6% US 11% 5% Estonia 3% 3% UK 3% 7% 3% 8% 4% 5% Poland 6% 3% 4% 3% 7% Other countries

20 Denmark

Import Export

Germany 15% Sweden 21%

29% Norway UK 39% 11% US The Netherlands 12% 6% China 3% Poland 4% 4% 6% Italy 4% 4% 5% 3% 3% France 8% 5% 8% 3% 5% 2% Other countries

C 21 Norway Import Export

Germany 11% 14% Sweden

11% 31% 6% Denmark 41% UK 4% 5% The Netherlands 5% France 4% 20% 4% China 3% 2% 2% 7% Poland 6% 11% 10% 3% US Other countries IX. Transactions with Germany

Sweden Finland Denmark Norway

Foreign trade (million euro in 2017, January - June)

Imports from Germany 12,836 6,992 16,453 8,381

Exports to Germany 7,421 6,249 13,339 14,861

Balance -5,415 -743 -3,114 6,480

22 X. Overview of public holidays in 2018

Sweden

01 January New Year’s Day

06 January Epiphany

30 March (varies from year to year) Good Friday

01 April (varies from year to year) Easter Day

02 April (varies from year to year) Easter Monday

01 May Labor Day

10 May (varies from year to year) Ascension Day

06 June National Day

22 June (varies from year to year) Midsummer Eve

23 June (varies from year to year) Midsummer Day

03 November All Saints Day

24 December Christmas Eve

25 December Christmas Day

26 December Boxing Day

31 December New Year’s Eve

C 23 Finland

01 January New Year’s Day

06 January Epiphany

30 March (varies from year to year) Good Friday

01 April (varies from year to year) Easter Day

02 April (varies from year to year) Easter Monday

01 May Labor Day

10 May (varies from year to year) Ascension Day

22 June (varies from year to year) Midsummer Eve

23 June (varies from year to year) Midsummer Day

06 December Independence Day

24 December Christmas Eve

25 December Christmas Day

26 December St. Stephen’s Day

31 December New Year’s Eve

24 Denmark

01 January New Year’s Day

29 March (varies from year to year) Maundy Thursday

30 March (varies from year to year) Good Friday

01 April (varies from year to year) Easter Day

02 April (varies from year to year) Easter Monday

27 April General Prayer Day

10 May (varies from year to year) Ascension Day

20 May Bank Holiday

21 May Whit Monday

05 June Constitution Day

24 December Christmas Eve

25 December Christmas Day

26 December St. Stephen’s Day

31 December New Year’s Eve

C 25 Norway

01 January New Year’s Day

25 March (varies from year to year) Palm Sunday

29 March (varies from year to year) Maundy Thursday

30 March (varies from year to year) Good Friday

01 April (varies from year to year) Easter Day

02 April (varies from year to year) Easter Monday

01 May Labor Day

10 May (varies from year to year) Ascension Day

17 May National Day

20 May (varies from year to year) Pentecost

21 May (varies from year to year) Pentecost Monday

24 December Christmas Eve

25 December Christmas Day

26 December Boxing Day

31 December New Year’s Eve

26 D. Law

I. Establishing a company

Sweden Finland Denmark Norway

Incorporated companies

Limited liability Private Ltd, Private Ltd, Private Ltd, Private Ltd, company AB (privat aktiebolag) Oy (Osakeyhtiö)/ ApS (Anpartselskab) AS (Aksjeselskap) Ab (Aktiebolag) »» Share capital at least »» Share capital at least »» Share capital at least SEK 50,000 »» Share capital at least DKK 50,000 NOK 30,000 (approx. EUR 5,300) EUR 2,500 (approx. EUR 6,600) (approx. EUR 3,300) »» Legal person and holder »» Legal person and holder »» Legal person and holder »» Legal person and holder of rights and obligations of rights and obligations of rights and obligations of rights and obligations »» Taxable entity »» Taxable entity »» Taxable entity »» Taxable entity Entrepreneur company, IVS (Iv�rks�tterselskab)

»» Share capital at least DKK 1 »» The company is obligated to retain at least 25 % of the profit until the capital reaches DKK 50,000 (approx. EUR 6,600) »» Legal person and holder of rights and obligations »» Taxable entity

D 27 Sweden Finland Denmark Norway

Joint stock Public Ltd, Oyj (Julkinen osakeyhtiö)/ Public Ltd, ASA company AB (publikt aktiebolag) Abp (publikt aktiebolag) A/S (aktieselskab) (Allmenn Aksjeselskap)

»» Share capital at least »» Share capital at least »» Share capital at least »» Share capital at least SEK 500,000 EUR 80,000 DKK 500,000 NOK 1,000,000 (approx. EUR 53,000) (approx. EUR 66,000) (approx. EUR 110,000) »» Legal person and holder »» Legal person and holder of rights and obligations »» Legal person and holder »» Legal person and holder of rights and obligations of rights and obligations of rights and obligations »» Taxable entity »» Taxable entity »» Taxable entity »» Taxable entity

European »» An incorporated »» An incorporated »» An incorporated »» An incorporated companies (SE) company with a company with a company with a company with a minimum capital of minimum capital of minimum capital of minimum capital of EUR 120,000. Its EUR 120,000. Its EUR 120,000. Its EUR 120,000. Its registered office must registered office must be registered office must be registered office must be located in an EU or located in an EU or EEA located in an EU or EEA be located in an EU or EEA country country country EEA country »» However, it can be »» However, it can be »» However, it can be oved »» However, it can be moved to another moved to another to another location at moved to another location at any time location at any time any time location at any time »» An SE is treated in each »» An SE is treated in each »» An SE is treated in each »» An SE is treated in each Member State as a joint Member State as a joint Member State as a joint Member State as a joint stock company formed stock company formed in stock company formed in stock company formed in accordance with the accordance with the law accordance with the law in accordance with the law of the country in of the country in which of the country in which law of the country in which the SE‘s the SE‘s registered office the SE’s registered office which the SE‘s registered office is is situated is situated registered office is situated situated

28 Partnerships

General HB (handelsbolag) AY (avoin yhtiö)/ I / S (interessentskab) ANS/DA (ansvarlig selskap) partnership ÖB (öppet bolag) »» Established through a »» Established through a »» Established through a partnership agreement »» Established through a partnership agreement partnership agreement by at least two company partnership agreement by at least two company by at least two company founders by at least two company founders founders founders »» The partners have equal »» The partners have equal »» The partners have equal status in all the »» The partners have equal status in all the status in all the company’s company’s operations status in all the company’s operations operations (if not otherwise and are personally company’s operations and are personally agreed in partnership responsible for company (if not otherwise agreed responsible for company agreement) and are decisions, liabilities, and in partnership decisions, liabilities, and personally responsible for debts agreement) and are debts company decisions, personally responsible liabilities, and debts »» Legal person and holder »» Legal person and holder for company decisions, of rights and obligations of rights and obligations »» Legal person and holder liabilities, and debts of rights and obligations »» Taxed by dividing the »» Taxed by dividing the »» Legal person and holder profit and net assets profit and net assets »» Taxed by dividing the of rights and obligations between the partners between the partners profit and net assets »» Taxed by dividing the (transparent) between the partners profit and net assets according to the terms of between the partners partnership agreement according to the terms »» DA (ANS med Delt of partnership Ansvar). In this form, agreement each of the participants can only be held liable for as high a percentage of debts as outlined in a predetermined founding contract

D 29 Sweden Finland Denmark Norway

Limited KB (kommanditbolag) KY (kommandiittiyhtiö)/ K/S (kommanditseskab) KS (kommandittselskap) partnership KB (kommanditbolag) »» Established through a »» Established through a »» The company is owned partnership agreement »» Established through a partnership agreement by two types of entities: by at least two company partnership agreement by at least two company the general partner, founders by at least two company founders who holds unlimited founders liability, and one or »» There is at least one »» The general partner, more limited partners limited partner, i.e. a »» There is at least one who has management participant in the limited partner, i.e. a control, shares the with limited liability company who generally participant in the profits of the firm in »» Each limited partner acts as an investor company who generally predefined proportions must pay equity of acts as an investor. and carries liability for NOK 20,000, of which »» A limited partners’ personal responsibility Limited partners’ the debts of the 20 % must be paid for company’s liabilities personal responsibility partnership. The limited before the registration and debts is limited to for the company’s partners are only liable at Br�nn�ysund Register the capital invested liabilities and debts is for debts incurred by Centre limited to the capital the firm to the extent of »» The general partner »» Legal person and holder invested. General their Investment must supply at least of rights and obligations partners’ personal »» Legal person and holder 10 % of the total equity responsibility as in »» Taxed by dividing the of rights and obligations profit and net assets general partnership »» Legal person and holder »» Danish corporate tax is of rights and obligations between the partners » Legal person and holder » avoided completely if of rights and obligations »» Taxed by dividing the there are nonresident profit and net assets » Taxed by dividing the partners and if the » between the partners profit and net assets trading company works between the partners solely outside Denmark according to the terms of partnership agreement

30 Other

Branch of a Filial Sivuliike /Filial Filial NUF foreign trader (Norskregistrertuten- »» Part of a foreign »» Part of a foreign »» Part of a foreign landsk foretak) organization that runs a organization that runs a organization that runs a continuous business in continuous business in continuous business in »» Part of a foreign Sweden in the name and Finland in the name and Denmark in the name organization that runs a for the benefit of the for the benefit of the and for the benefit of continuous business in foreign organisation foreign organisation the foreign organisation Norway in the name and for the benefit of the »» No legal personality »» Must operate in the »» No legal personality same line of business as foreign organisation »» Taxable entity, as it is »» Taxable entity as it is the foreign trader usually a permanent usually a permanent »» Must operate in the same line of business as establishment of the »» No legal personality establishment of the foreign company foreign company the foreign trader »» Taxable entity »» No legal personality »» Taxable entity

Foundation Foundation (Stiftelse) Säätiö / Stiftelse Foundation (Fond) Stiftelse

»» Set up to manage »» Set up to manage »» Set up to manage »» Set up to manage property donated for a property donated for a property donated for a property donated for a particular purpose. No particular purpose. No particular purpose. No particular purpose. No owners, shareholders, or owners, shareholders, or owners, shareholders, or owners, shareholders, or members members members members »» Legal person and holder »» Legal person »» Legal person and holder »» Legal person of rights and obligations of rights and obligations »» Taxable entity for »» Taxable entity for business operations business operations

D 31 Sweden Finland Denmark Norway

Economical Economic association Cooperative association Economic association, SA (Samvirkeforetak) associations (Ekonomisk förening) (Osuuskunta /Andelslag) (Erhvervsdrivende Forening) »» Established by at least »» Established by at least »» Established by at least two persons. Owned by three persons. Owned by three persons. Owned »» Established by at least its members its members by its members two persons. Owned by »» Legal person and holder its members »» Legal person and holder »» Legal person and holder of rights and obligations of rights and obligations of rights and obligations »» Legal person and holder »» Taxable entity of rights and obligations »» Taxable entity »» Taxable entity »» Taxable entity Non- R.y. (Rekisteröity governmental yhdistys) / organisations r.f. (Registrerad förening) (NGO-associations) (almennyttig forening) »» A non-profit association is an organisation that is »» A non-profit association meant to be permanent, is an organisation that is founded by several meant to be permanent, persons or several founded by several organisations having persons or several legal capacity, for the organisations having realization of a common legal capacity, for the non-profit purpose realisation realization of a common non-profit »» Legal person and holder purpose of rights and obligations »» Legal person and holder »» Taxable entity for of rights and obligations business operations »» Taxable entity for business operations

32 Proprietorship Proprietorship Tmi (Toiminimi)/ Proprietorship ENK (Enskild firma) Fma (Enskild (Enkeltmandsvirksomhed) (Enkeltpersonforetak) näringsidkare) »» Not a separate legal »» Not a separate legal »» Not a holder of rights entity, a holder of rights entity, a holder of rights »» Not a holder of rights and obligations, and not and obligations, and not and obligations, and not and obligations, and not a taxable entity a taxable entity a taxable entity a taxable entity »» The entrepreneur bears » The natural person is »» The natural person is »» The entrepreneur bears » the liability and is also taxed for income from taxed for income from the liability and is also taxed for the profit business activities taxed for the profit business activities

D 33 Copenhagen

34 II. Working

Sweden Finland Denmark Norway

Employment and labor law

General Formal requirements Formal requirements Formal requirements Formal requirements for employment for employment for employment for employment relationship relationship relationship relationship

»» Written contract is not »» Written contract not »» Written employment »» Written employment required to enter into required by law agreement. The Danish contract and Norwegian agreement Act of Statements of tax card (skattekort) are Notice period Employment (based on mandatory Notice period EU regulations) contains »» Depends on the duration Notice period »» Depends on the duration of employment, 1-6 minimum requirements of employment, months as to the contracts of the »» Depends on the 1 – 6 months employment agreement employment time and Probationary period age of employee, 1-6 »» Depends on the age of Notice period the employee for »» 6 months allowed by law months » Depends on the duration employment commenced (additionally limiting to » Probationary period before January 1, 1997 half of the fixed-term of of employment, employment). Can be 1 – 6 months »» 6 months allowed by law » Variations occur in » extended by 1 month for collective agreements »» Variations occur in each 30 days’ absence collective agreements Probationary period due to sickness or parental leave Probationary period »» 6 months allowed by law »» During the probationary »» 3 months allowed by law »» Variations occur in period, the employment collective agreements may be terminated without a notice period

D 35 Sweden Finland Denmark Norway

Managing »» An employee who is »» Is a part of the company »» Normally exempted from »» The managing director director normally exempted from and hence not employed the application of The and at least half of the the application of the by the company. Salary Employment Act, members of the board Employment Protection Therefore, the provisions The Holiday Act etc., must reside in Norway or Act, which means that of the Employment which means that the another EEA country the contract may Contracts Act, Working contract may stipulate stipulate other Hours Act, and Annual other conditions as to conditions for Holidays Act are not termination, notice termination, notice applicable to an MD periods, etc. periods, etc. »» Terms regarding working »» The parties are free to »» As the Act is not hours, holidays, etc. agree on the terms and applicable, the contract stipulated in a contract conditions of the should be much more employment, which »» Should hence be much comprehensive than is more comprehensive should hence be much otherwise required more comprehensive »» Collective agreements do not apply to MD

36 Employment »» Permanent employment »» Permanent employment »» Permanent employment »» Permanent employment forms as a general rule as a general rule as a general rule as a general rule »» Temporary employment »» Termporary employment »» Temporary employment »» Temporary employment is allowed, but may be allowed 1) on is allowed, but may be is allowed, but may be converted to permanent employee’s initiative, or converted to permanent converted to permanent employment if the 2) on employer’s employment if employment if the employee has sufficient initiatative, provided that prolonged consecutively employee has sufficient employment time with a there are justified without valid reason(s) employment time with a certain employer reasons for fixed-term certain employer employment »» Contracts made for a fixed term on the employer‘s initiative without a justified reason and consecutive fixed-term contracts concluded without a justified reason are considered valid indefinitely

D 37 Sweden Finland Denmark Norway

Termination By the employee By the employee By the employee By the employee »» Reason does not have to »» Reason does not have to »» Reason does not have to »» Reason does not have to be provided be provided be provided be provided »» Notice period applies if the »» Notice period applies if the »» Notice period applies if the »» Notice period applies if the termination does not result termination does not result termination does not result termination does not from gross breach of from gross breach of from gross breach of result from gross breach of contract by the employer contract by the employer contract by the employer contract by the employer By the employer By the employer »» One month’s notice for By the employer »» Dismissal requires a good »» Dismissal requires a good expiry at the end of the »» Dismissal requires a cause, which may be cause, which may result month good cause, which may either due to redundancy from personal or financial By the employer result from personal or or personal causes reasons and production »» Dismissal requires a financial reasons and »» The good cause related grounds good cause, which may production related requirement is not met if »» The good cause result from the grounds the employer can offer requirement is not met if employee’s personal or »» The good cause another position to the the employer can offer the employer’s financial requirement is not met if employee another position to the and business related the employer can offer »» Notice period applies employee grounds another position to the employee Summary dismissal »» Notice period applies »» The notice period Summary dismissal depends on the duration »» Notice period applies »» Requires gross breach of of the employment at the employment contract »» Termination without the time of giving the by the employee notice possible only for notice of termination particularly weighty »» Not subject to a notice »» 0 < 5 months: 1 month period reasons »» Termination without »» 5 months < 2 years and notice is not possible on 9 months: 3 months financial and »» 2 years and 9 months < production-related 5 years and 8 months: grounds 4 months

38 »» 5 years and 8 months < 8 years and 7 months: 5 months »» 8 years and 7 months or more: 6 months (Above is applicable for white collar employees only)

Unions and Right to employee Right to employee Right to employee Right to employee collective participation participation participation participation agreements »» The employer is required »» Employee participation is »» Outside of collective »» The Norwegian labor to inform unions with protected by law. bargaining agreements, market is regulated by which there are Substantial worker there is mandatory both legislation and collective agreements as participation rate, more employee participation through collective well as other unions than 70 % by 1/3 (in the top-tier bargaining agreements which have members in corporate governing (tariffavtale) »» The employer must the workforce about body) if there are more observe at least the »» Trade unions traditionally plans and events that provisions of the than 35 full-time hold a powerful position have an effect on national collective employees on average in Norway employees agreement declared as »» In collective bargaining Duty to negotiate »» Failure to comply with generally binding within agreements, a joint this requirement is the sector in question cooperation committee »» Prior to any action to sanctioned by damages must be established with dismiss an employee, the »» Any provision of an employees/union employer must discuss the Duty to negotiate employment contract matter with the employee that is in conflict with an representative if there »» The employer is required and the employees’ elected equivalent term in the are more than 35 to negotiate with unions full-time employees on representatives with which there are applicable generally binding collective average »» The statutory period of collective agreements as notice of termination varies well as other unions agreement is void, and the equivalent provision between one and six which have members in months the workforce before in the generally

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taking decision that have applicable collective an effect on one or more agreement is applied employees instead »» Failure to comply with Duty to negotiate the requirement is »» The duty to negotiate sanctioned by damages with employees or their elected representatives concerns employers regularly employing 20 employees or more »» Failure to comply with the duty may result in the employee’s right to compensation (max. EUR 30,000)

Minimum Wage Wage Wage Wage requirements »» No statutory minimum »» No statutory minimum »» No statutory minimum »» No statutory minimum and conditions wage rate wage rate wage rate wage rate »» The minimum wages »» Collective agreements »» Collective agreements »» Wages fall within a stipulated by collective include minimum wage often include minimum national scale negotiated agreements within rates wage rates by labor, employers, and different industries are »» If a collective agreement Working time local governments generally respected, is not applicable to an Working time even by employers not »» Normal office working employment relationship time in Denmark is 37 »» Ordinary working hours bound by the and the employer and agreements hour per week: 7.5 hours for full time employees the employee have not Monday to Thursday and are usually limited to 40 agreed on the 7 hours Friday. hours per week, remuneration to be paid Lunchtime is not paid. excluding lunchtime. for the work, the This means that work There are, however,

40 Working time employee shall be paid is usually done from a number of collective reasonable “normal” 8.30 to 16.30, including agreements that specify »» The law stipulates that an ordinary working day remuneration for the 30 minutes unpaid a shorter normal is 8 hours and an work performed lunchtime working week for particular types of work ordinary working week is Working time »» However, the employer 40 hours. Overtime may and employee agree on » Normal working hours »» The time spent on work » be required by the and the time an precise working time may, under special employer within limits employee is required to arrangements as part of circumstances, exceed stipulated by law be present at a place of the hiring process 40 hours a week, as long as the average does not »» Many collective work at the employer’s »» Overtime is not agreements have rules disposal are considered regulated by law and exceed 13 hours a day or for working time working hours shall thus also be 48 hours per any 7 days addressed in the »» Regular working hours shall not exceed eight contract hours a day or 40 hours »» The average working a week. The regular hours may not exceed weekly working hours 48 hours in a 4 months can also be arranged in period such a way that the average is 40 hours over a period of no more than 52 weeks »» Overtime refers to work carried out on the employer‘s initiative in addition to the regular working hours »» Explicit consent of the employee is required in each case of overtime

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»» Many collective agreements have specific provisions for working time

Minimum Annual leave Annual leave Annual leave Annual leave requirements »» The statutory minimum »» An employee is entitled to »» The statutory minimum »» The statutory minimum and conditions leave is 25 days per year two and a half weekdays leave is 5 weeks per leave is 25 days per year Severence pay of leave for each full leave year. Paid leave requires »» Employees above the credit month. However, the employee to have age of 60 are granted 6 »» There is no obligation to the entitlement is two accrued leave days in the pay severance pay when additional leave days per weekdays of leave for past calendar year year there is good cause for each full leave credit termination NOTE: A new law Severence pay month if the duration of regulating leave is enacted the employment has been and will come into force on »» An employee cannot less than one year (i.e. September 1, 2020. This claim severance pay maximum statutory law will change the current under Norwegian law. If annual leave entitlement leave system in Denmark. dismissal is justified, is either 24 or 30 days) claims are limited to Severence pay »» An employee is granted salary during the notice annual leave at a time »» 1 month’s salary if the period determined by the employee has more than »» The employment employer. A total of 24 12 years of tenure at the contract for a company’s weekdays of the annual time of expiration of the CEO may state that the leave must be taken in notice period, and CEO waives his/her the holiday season »» 3 months‘ salary, if the employment protection (summer holiday; until employee has more than in exchange for a 30.09.). The rest of the 17 years of tenure at the severance payment. leave (winter holiday) time of expiration of the Such agreement must be must be granted by the notice period. (Above is done in advance and in start of the following applicable to white collar writing holiday season (until employees only) 01.05.)

42 »» Employees have the right to receive at least their regular or average pay for the time of their annual leave »» Leave pay calculations differ based on whether the employee’s salary is calculated on a weekly, monthly, or hourly basis Severence pay »» No obligation to pay if the employee is terminated for good cause

Minimum Parental leave Parental leave Parental leave Parental leave requirements »» Maternity leave of 7 »» Maternity leave begins »» Women have the right to »» Parental leave is a and conditions weeks prior to as well as 50 (maximum) to 30 four weeks of pregnancy statutory right for all after giving birth. (minimum) days before leave before the parents (regardless of Parental benefits are the due date. Maternity expected date of birth gender) in Norway paid in total for 480 days allowance is paid for 105 and 14 weeks of »» From 1 July 2013, for each child, to be working days maternity leave after parental leave may be divided between the childbirth, of which the »» Paternity leave lasts up to fully paid by the parents first two weeks are 54 working days and may Norwegian National mandatory »» Right to parental leave be used after birth Insurance for a during the first 18 » Fathers have the right to maximum of 49 weeks »» Childcare leave may be » months regardless of taken in order to care for take up to two weeks of (or maximum of 59 whether parental a child until the child paternity leave, which weeks at 80 % pay) benefits are paid must be taken within the reaches the age of three »» Parental leave may be first 14 weeks after »» Right to parental leave freely distributed between

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when parental benefits »» The employee must notify the birth or the date on the parents, except that are paid during the first the employer of maternity, which the child moves 10 weeks are reserved 4 years paternity, parental leave, into the parents‘ home for each parent and that Sick leave or childcare leave at least »» After the first 14 weeks, the first 6 weeks of the two months before the both the mother and the leave are reserved for »» An employee may be intended start of the leave the mother absent for 7 days father have the right to without a medical »» The right to parenthood up to a total of 32 weeks certificate allowances is regulated in of parental leave, the Health Insurance Act provided that both »» The first day of absence Sick leave parents are working in is without pay Denmark »» For day 2 – 14, the sick »» According to the Employment Contracts »» Salaried employees are pay is 80 % and paid by entitled to half of their the employer Act, an employee who is unable to perform work salary during the 4 »» From day 15, the duties due to sickness is weeks of pregnancy employee instead entitled to his / her salary leave and the 14 weeks receives sickness benefits for up to nine days from of the maternity leave. the start of the illness During this period, the employer will receive a »» Several collective refund from the agreements contain government provisions for a longer paid sick leave (up to »» However, companies 4 – 6 weeks) often grant their employees further rights (14 + 10 weeks of paid maternity leave and 10 weeks for the father) »» Collective agreements also provide for further rights (14 + 13 weeks of paid leave)

44 Sick leave »» Employees covered by the Salaried Employees Act are entitled to their salary for the duration of the illness. However, after the first 30 days, the municipality will reimburse the employer for part of the salary (sick pay) »» The Employer has to pay for any medical examinations requested from the employee

D 45 Helsinki

46 III. Insolvency – obligations and risks

Sweden Finland Denmark Norway

Board

Obligations »» The Board of Directors is »» The Board of Directors is »» In addition to »» The Board of Directors responsible for the responsible for the performing overall and must manage the appropriate appropriate arrangement strategic management company’s affairs in the arrangement of control of control over company duties, the Board of best interests of the over company accounts accounts and finances Directors is responsible company and its and finances for the appropriate shareholers »» Obligation to control the arrangement of control »» Obligation to establish amount of equity. »» The overall liability of the company adequate risk Should the Board of resides with the Board management and Directors notice that the accounts and finances internal controls company has negative »» Obligation to establish equity, the Board shall at adequate risk once make a register management and notification on the loss internal controls of share capital »» Obligation to ensure that the board of managers performs its duties properly and as directed by the Board

Risks Inadequate control may result in liability to pay damages

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Managing Director

Obligations »» Only public limited »» The Managing Director »» In a public limited »» Only public limited liability companies are must ensure that the liability company, the liability companies are required to also have a company’s accounts are day-to-day business is required to have a Managing Director. The in compliance with the managed by the board Managing Director Managing Director is law and that its financial of managers (Direktion) (daglig leder) responsible for affairs have been »» The Managing Director »» The Managing Director is controlling the finances arranged in a reliable is responsible for responsible for of the company and manner. The Managing controlling the finances controlling the finances reporting to the Board Director must act of the company and of the company and according to instructions »» The Managing Director reporting to the Board reporting to the Board must act according to and orders given by the »» The Managing Director instructions and orders Board of Directors shall act according to given by the Board of instructions and orders Directors given by the Board of Directors

Risks Inadequate control may result in liability to pay damages

48 General meeting/shareholders

Obligations »» The shareholders’ rights »» The shareholders’ rights »» The shareholders’ rights »» The shareholders’ rights are exercised at the are exercised at the are exercised at the are exercised at the Shareholders’ general Shareholders’ general Shareholders’ general Shareholders’ general meeting meeting meeting meeting (Generalforsamlinge) »» Decisions are generally »» Decisions are generally »» Decisions are generally made by simple majority, made by simple majority, made by simple majority, »» Decisions are generally although certain although certain although certain made by simple majority, resolutions require a resolutions require a resolutions require a although certain qualified majority qualified majority qualified majority resolutions require a qualified majority »» If there is reason to »» If there is a reason to »» If there is reason to believe that the equity believe that the equity believe that the equity amounts to less than amounts to less than the amounts to less than half of the share capital, share capital, an official half of the registered a balance sheet for announcement has to be share capital, action liquidation purposes registered in the Trade must be taken to must be established register remedy the capital deficiency. The »» If the capital deficiency »» In a public company, a cannot be remedied, the financial closure has to be management must shareholders must vote prepared if there is reason ensure that a general for liquidation to believe that the equity meeting is held within amounts to less than half six months of the share capital. The shareholders’ meeting has up to 3 months to decide on further steps

Risks Failure to comply may lead to personal responsibility for debts of the company

D 49 IV. Signing of contracts

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General May be entered orally or May be entered orally or by May be entered orally or by May be entered orally or by guidelines by implicit acquiescence implicit acquiescence implicit acquiescence implicit acquiescence Written agreement is Written agreement is Written agreement is Written agreement is required by law in certain required by law in certain required by law in certain required by law in certain situations, including: situations, including: situations, including: situations, including: »» Transfer of real property »» Transfer of real property »» Transfer of real property »» Wills »» Wills »» Wills »» Wills »» Prenuptial agreements »» Prenuptial agreements »» Prenuptial agreements »» Prenuptial agreements »» Collective agreements »» Collective agreements »» Collective agreements »» Consumer credits »» Consumer credits »» Consumer credits »» Consumer credits »» Employment contract »» Labor contracts »» Ground leases

Representation »» For legal persons, »» For legal persons, »» For legal persons, »» For legal persons, authorization to authorization to authorization to authorization to represent the company represent the company represent the company represent the company may be viewed in the may be viewed in the may be viewed in the may be viewed in the company register, which company register, which public company register, company register, which should be done before should be done before which should be done should be done before contracts are signed contracts are signed before contracts are contracts are signed signed

50 Consumer »» Several laws stipulate »» Several laws stipulate »» Several laws stipulate »» Different laws stipulate contracts that the contracts that the contracts should that the contracts should that consumer contracts should be in writing be in writing be in writing should be in writing »» Contractual terms and »» Contractual terms and »» Standard terms and »» Contractual terms and conditions that conditions that conditions that conditions that unreasonably place a unreasonably place a unreasonably place a unreasonably place a consumer at a consumer at a consumer at a consumer at a disadvantage compared disadvantage compared disadvantage compared disadvantage compared to standards set by law to standards set by law to standards set by law to standards set by law are not binding to the are not binding to the are not binding to the are not binding to the consumer consumer consumer consumer

Security Typical security Typical security Typical security Typical security Instruments instruments include: instruments include: instruments include: instruments include: »» Pledges »» Pledges »» Pledges »» Pledges »» Guarantees »» Guarantees »» Guarantees »» Guarantees »» Bank guarantees »» Bank guarantees »» Bank guarantees »» Bank guarantees »» Chattel mortgages »» Chattel mortgages »» Chattel mortgages »» Chattel mortgages

Material Legal consequences in Legal consequences in case Legal consequences in case Legal consequences in case defects case of material defects: of material defects: of (material) defects: of material defects: »» Repair of defects »» Repair of defects »» Repair of defects »» Repair of defects »» New product »» New product »» New product »» New product »» Price reduction »» Price reduction »» Price reduction »» Price reduction »» Cancellation of the »» Cancellation of the »» Cancellation of the »» Cancellation of the agreement agreement agreement agreement »» Compensation of »» Compensation of »» Compensation of »» Compensation of damages damages damages damages

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Right of first General General General General refusal »» Right of first refusal may »» Right of first refusal may »» Right of first refusal may »» Right of first refusal may be contractually agreed be contractually agreed be contractually agreed be contractually agreed but is normally not valid but is normally not valid but is normally not valid but is normally not valid towards a third party towards a third party towards a third party towards a third party acting in good faith acting in good faith acting in good faith acting in good faith Shares Shares Shares Housing cooperative A limited company may A limited liability company A limited liability company »» Right of first refusal is include clauses in its AoA may include clauses in its may include clauses in its common stipulating: AoA stipulating: AoA stipulating: Shares » Post-sale purchase right » Post-sale purchase right » Post-sale purchase right » » » A limited liability company »» Right of first refusal »» Right of first refusal »» Right of first refusal may include clauses in its AoA stipulating: »» Requirement of consent »» Requirement of consent »» Requirement of consent »» Post-sale purchase right »» Requirement of consent

Right to May exist when: May exist when: May exist when: May exist when: restitution »» Property has been taken »» Property has been taken »» Property has been taken »» Property has been taken against the will of the against the will of the against the will of the against the will of the owner owner owner owner »» Nullity of the power to »» Nullity of the power to »» Nullity of the power to »» Nullity of the power to dispose of the property dispose of the property dispose of the property dispose of the property due to e.g. cancelation of due to e.g. cancelation due to e.g. cancelation due to e.g. cancelation a purchase contract of a purchase contract of a purchase contract of a purchase contract Good faith of the third Good faith of the third Good faith of the third Good faith of the third party normally protected if party usually not protected party usually not protected party protected the property has not been deprived through criminal activity

52 Retention of »» Usually a provision in »» Usually a provision in »» Retention of title clauses »» Usually a provision in title purchases combined purchases combined on goods for resale is purchases combined with with credit agreements with credit agreements not enforceable against credit agreements creditors of the »» Often associated with »» Often associated with »» Often associated with purchaser, unless risk as the requirements risk as the requirements risk as the requirements consignment stock is for repossession of the for repossession of the for repossession of the agreed purchased goods are purchased goods are purchased goods are high high high

International »» The applicable law and »» The applicable law and »» The applicable law and »» The applicable law and dispute competent court may be competent court may be competent court may be competent court may be resolution agreed contractually in agreed contractually in agreed contractually in agreed contractually in most cases most cases most cases most cases »» Arbitration is often »» Arbitration is often »» Arbitration is often »» Arbitration is often advisable in cross-border advisable in cross-border advisable in cross-border advisable in cross-border matters, depending on matters, depending on matters, depending on matters, depending on the value of the subject the value of the subject the value of the subject the value of the subject matter matter matter matter

D 53 V. Securing of receivables

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Contractual »» May be agreed and is not limited by law penalty »» May be reduced by courts if deemed excessive

Pledging »» Pledges of real property »» Pledges of real property »» Pledges of real property »» Pledges of real property must be entered into the must be entered into the must be entered into the must be entered into the Land Register Land Register Land Register Land Register to secure legal protection towards »» Movable property must »» Movable property must »» Movable property be placed in the be placed in the (individually or as third parties possession of the possession of the floating charge) must be »» Movable property must pledgee for the pledge pledgee for the pledge either registered in be placed in the to be valid to be valid Personal Book possession of the (Personbogen) or pledgee for the pledge pledgee deprived of to be valid, except for possession for the movable property pledge to be valid registered in the Asset vis-�-vis third parties Register, which is pledged by registration in the Asset Register

54 Suretyship/ »» May be stipulated to »» May be stipulated to »» May be stipulated to »» May be stipulated to Guarantees require that the creditor require that the creditor require that the creditor require that the creditor first exhaust other legal first exhaust other legal first exhaust other legal first exhaust other legal options (enkel borgen) options options (alm. kaution) or options (simpel kausjon) or to be a joint and (yksinkertainentakaus) or to be a joint and several or to be a joint and several liability to be a joint and several liability several liability (proprieborgen) liability (omavelkainen (selvskyldnerkaution) (selvskyldnerkausjon) takaus) »» The commitment may be »» The commitment may be limited contractually limited contractually »» Does not legally require »» Agreements in favour of written agreement finacial institutions must be made in writing

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Chattel Regulated by law Regulated by law Regulated by law Regulated by law mortgages »» A chattel mortgage »» Possible only with »» A chattel mortgage is »» Factoring and certificate is issued upon property under public issued upon registration mortgaging of inventory registration in the registration in the chattels / lien is possible. In addition, chattel mortgage register (Personbogen), charge on machinery »» A chattel mortgage register certificate is issued upon registration fee is 1.5 % and plants is possible for of the chattel mortgage businesses »» Requires the debtor to registration of the hand over the certificate mortgage sum to the creditor » A chattel mortgage »» Requires the debtor to » hand over the certificate certificate is issued upon to the creditor registration in the chattel mortgage register »» Requires the debtor to hand over the certificate to the creditor

Bank May be agreed May be agreed May be agreed May be agreed guarantees contractually contractually contractually contractually

Letters of Regulated by the Regulated by the Act on Subject to ICC Regulated by the credit Promissory Notes Act Guarantees and rules / banking laws Promissory Notes Act and Third-Party Pledges Financial Contracts Act

56 VI. Legal disputes

Sweden Finland Denmark Norway

Civil jurisdiction

Instances »» District Courts (Tingsrätt) »» District Courts »» District Courts (Byretter) »» District Courts (Tingrett) (Käräjäoikeus / Tingsrätt) »» Court of Appeal »» Regional Courts »» Court of Appeal (Hovrätt) »» Courts of Appeal (Landsretter) (Lagmansrett) (Hovioikeus / Hovrätt) »» Supreme Court (Högsta »» Supreme Court »» Supreme Court domstolen) »» Supreme Court (Korkein (H�jesteret) (H�yesterett) oikeus /Högsta »» Specialized courts, e.g. »» Maritime and »» One specialized court: Domstolen) Labor Court Commercial Court of the Social Security »» Specialized courts, e.g. Copenhagen Tribunal Labor Court, Market (S�og Handelsretten in Court, Insurance Court Copenhagen)

Duration of »» District Court: »» District Court: »» District Court: »» District Court: proceedings 6-16 months 8 – 12 months (disputes 8 – 12 months (disputes should start within (civil disputes) including oral hearing) including oral hearing) 6 months »» Court of Appeal: 6-12 months »» Court of Appeal: »» Court of Appeal: »» Court of Appeal: 8 – 12 months (disputes 8 – 12 months (disputes 6 – 24 months »» Supreme Court: including oral hearing) including oral hearing) 6-12 months »» Supreme Court: »» Supreme Court: »» Supreme Court: 2 – 3 months 6 – 12 months 6 – 12 months

Statutory No No No, only in Regional and No requirement to Supreme Court be represented by a lawyer

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Specifics / »» Main hearing and often »» Main hearing and »» Main oral hearing in »» Main hearing in court Problem preparatory hearings in preparatory hearings at court »» Verdicts are public, overview court court »» Hearings and verdicts are therefore arbitration »» Verdicts are public as a »» Verdicts are public as a public as a rule, clauses are common in rule, therefore rule, therefore therefore arbitration contracts of a sensitive arbitration clauses are arbitration clauses are clauses are common in nature common in contracts of common in contracts of contracts of a sensitive a sensitive nature a sensitive nature nature

Fees and »» Application fee for a »» Fee for civil proceedings »» Claim/case value up to »» The court fee depends charges summons SEK 2,800 collected by the court DKK 50,000: DKK 500 on how many court days (District Courts) (900 for claims of less EUR 65 – 250 depending are required and starts »» Claims/case value than SEK 22,200) on the stage of the between DKK 50,000 at NOK 5,245 for day 1. process at which a ruling and DKK 6,237,500: Small claims can in some is given 1.2 % of the value + cases have a lower fee DKK 150.00 »» Claim/case value > DKK 6,237,500: DKK 75,000 »» The same amounts are paid again if the case proceeds to oral hearings (hovedforhandling)

Distribution »» Generally, the prevailing »» Generally, the prevailing »» Generally, the prevailing »» Generally, the prevailing of costs party may claim recovery party may claim recovery party may claim recovery party may claim recovery of its costs for the of its costs for the of its costs for the of its costs for the proceedings from the proceedings from the proceedings from the proceedings from the non-prevailing party non-prevailing party non-prevailing party non-prevailing party

58 »» If there are several claims »» If there are several claims »» If there are several claims »» If there are several or counterclaims, the or counterclaims, the or counterclaims, the claims or counterclaims, costs are distributed costs are distributed costs are distributed the assessment of which proportionate to the proportionate to the proportionate to the party is the prevailing outcome outcome outcome one is based on the total outcome »» A party that has »» A party that has »» A party that has negligently prolonged or negligently prolonged or negligently prolonged or »» The amount may be complicated the complicated the complicated the reduced at the court‘s proceedings risks losing proceedings risks losing proceedings risks losing discretion if deemed its claim for recovery of its claim for recovery of its claim for recovery or unnecessary or costs costs being liable to pay more unreasonable of the costs than would otherwise be distributed to it »» However, the costs that the Court may order the non-prevailing party to pay in most cases do not cover the full actual costs

Interim relief »» Interim relief may be »» Interim relief may be »» Interim relief may be »» Interim relief may be applied for before applied for before applied for before applied for before bringing a lawsuit or bringing a lawsuit or bringing a lawsuit or bringing a lawsuit or after the proceedings after the proceedings after the proceedings after the proceedings have started have started have started have started »» If relief is granted, a »» The applicant petitions »» The applicant petitions »» The applicant petitions lawsuit must be brought the court that it is the court that it is the court that it is within one month probable that the claim probable that the claim probable that the claim of the applicant might of the applicant might of the applicant might be at risk be at risk be at risk

D 59 Sweden Finland Denmark Norway

»» The applicant must »» If relief is granted, a »» If relief is granted, a »» If relief is granted, the provide a security, such lawsuit must be brought lawsuit must be brought court also specifies a as bank guarantee or within one month within one month deadline for bringing security deposit »» The applicant must »» The applicant must the lawsuit Interim relief measures provide a security, such provide a security, such »» The court may require include: as bank guarantee or as bank guarantee or the applicant to provide »» Seizure of assets security deposit security deposit a security »» Restrictions on the Interim relief measures disposal of assets include, but are not limited to: »» Prohibiting specific »» Seizure of assets actions or transactions »» Restrictions on the »» Restoring the possession disposal of assets of assets »» Prohibiting specific actions or transactions

Administrative jurisdiction

Instances »» Administrative Courts »» Administrative Court »» District Courts (Byretten) »» District Courts (Tingrett) (Förvaltningsrätt) (Hallinto-oikeus) »» Court of Appeal »» Court of Appeal »» Administrative Courts of »» Supreme Administrative (Landsretten) (Lagmansrett) Appeal (Kammarrätt) Court (Korkein »» Supreme Court »» Supreme Court »» Supreme Administrative hallintooikeus) (H�jesteret) (H�yesterett) Court (Högsta »» Same as civil juristiction förvaltnings domstolen)

Duration of »» Administrative Court: »» Administrative Court: »» District Court: should »» District Court: should proceedings 4-12 months 6 – 12 months start within 6 months start within 6 months »» Administrative Court of »» Administrative Court of »» Court of Appeal: 5 – 24 »» Court of Appeal: Appeal: 4-12 months Appeal: 6 – 12 months months 6 – 24 months »» Supreme Administrative »» Supreme Administrative »» Supreme Court: 2 – 19 »» Supreme Court: Court: 4-12 months Court: 6 – 12 months months 2 – 3 months

60 Statutory No No No No requirement to be represented by a lawyer

Specifics / »» Written procedure as a »» Written procedure as a »» Written procedure as a »» The Norwegian court problem rule, hearings in court rule, hearings in court rule, hearings in court system does not include overview are unusual are unusual are unusual separate administrative courts »» Administrative matters are heard by the ordinary courts in accordance with general rules of civil procedure

Interim relief »» The court may suspend »» The court may suspend »» The court may suspend »» The court may suspend the enforcement of the the enforcement of the the enforcement of the the enforcement of the contested administrative contested administrative contested administrative contested administrative decision decision decision decision

D 61 Sweden Finland Denmark Norway

Arbitration proceedings

General »» Arbitration may not be »» Used especially in »» Used especially in »» Used especially in agreed beforehand with business disputes as a business disputes as a business disputes as a a consumer, but may be substitute to normal substitute to normal substitute to normal agreed after the dispute process at court process at court process at court has arisen »» Speed, flexibility, and »» Speed, flexibility, and »» Speed, flexibility, and »» The Arbitration Act is confidentiality are the confidentiality are the confidentiality are the applicable unless advantages compared to advantages compared to advantages compared to otherwise agreed. A ordinary courts ordinary courts ordinary courts tribunal of three »» Arbitration rulings are »» Arbitration rulings are »» Arbitration may be arbitrators is the general more easily executed in more easily executed in agreed orally in cases practice cross-border matters cross-border matters not involving consumers (outside of EU) »» Must be agreed on in »» Arbitration with writing. Usually, the »» Must be agreed on in consumers may only be arbitration clause is part writing. Usually, the agreed in writing and of the contract or a arbitration clause is part only after the dispute separate arbitration of the contract or a has arisen contract separate arbitration contract

62 Permanent »» Arbitration Institute of »» Arbitration Institute of »» Danish Institute of »» Arbitration and arbitration the Stockholm Chamber the Finland Chamber of Arbitration Alternative Dispute courts of Commerce Commerce (Copenhagen) Resolution Institute of the Oslo Chamber of »» Ordinary or expedited »» Ordinary or expedited »» Registration fee procedure procedure EUR 1,300 Commerce » Ordinary or expedited »» Registration fee »» Registration fee »» The fees depend on the » EUR 1,500 (excl. VAT) EUR 2,500– 8,000 (excl. disputed amount, the procedure VAT) depending on the procedure used (ordinary » Fees depend on the »» The fees depend on the » disputed amount, the disputed amount and or expedited) and disputed amount and procedure used (ordinary the procedure used whether one or three time expenditure, or expedited) and (ordinary or expedited) arbitrators are chosen. A minimum NOK 10,000 cost calculator is (excl. VAT) whether one or three »» Arbitrators’ fees depend arbitrators are chosen. A on the disputed amount available on the cost calculator is and time expenditure Institute’s website: available on the http://www.voldgifts- »» The fees depend on the Institute’s website: disputed amount, the instituttet.dk/en/Menu/ http://www.sccinstitute. procedure used (ordinary CostsArbitration+Cost com/skiljeforfarande-2/ or expedited) and +Calculator how-much-is-it-1.aspx whether one or three arbitrators are chosen. A cost calculator is available on the Institute’s website: http://www.arbitration/ costs-of-arbitration/ calculator-2/

D 63 Oslo

64 E. Taxes

I. Tax rates

Sweden Finland Denmark Norway

Corporate Income tax

Standard rate 22 % 20 % 22 % 24 %

Preferential rate None None None None

VAT

Standard rate 25 % 24 % 25 % 25 %

Preferential »» 6 % on books, »» 14 % on food, animal »» 0 % on health/welfare, »» 15 % on food (not rate newspapers etc., feed, restaurant services, education, banking and restaurant and catering passenger meal catering services financing services, services) transportation, cultural »» 10 % on books, medicine, insurance, sale and »» 10 % on passenger and sporting events services relating to physical letting of real property transport, hotel »» 12 % on food, drinks exercise and sports, (voluntary VAT possible), accommodations, (non-alcoholic), movies, tickets to cultural cultural and sporting cinema screenings, restaurant and catering and entertainment events, events tickets to museums, services, hotel transport of passengers, amusement parks, accommodation, sale of accommodation and TV sporting events, works of art by the artist licenses transportation of »» 0 % on health/welfare, »» 0 % on health/welfare, vehicles on vessels education, banking and education, banking and financing services, financing services, insurance, sale and insurance, sale and letting of real property letting of real property (voluntary VAT possible) (voluntary VAT possible)

E 65 Sweden Finland Denmark Norway

Personal income tax

Income from »» Progressive tax scale »» Community tax »» Progressive tax scale »» Progressive tax rscale employment 29 % – 62 % 16.5 % – 22.5 %, church 42 % – 56 % 32.2 % – 46.7 % tax ca. 1 – 2 % and state tax according to a progressive scale 6.25 % – 31.5 %

Other income »» 30 % on income from »» Income tax on capital »» Income tax on capital »» 24 % capital in general, lower income 30 % income up to rates on dividends from DKK 40,800/81,600 »» Tax rate on capital unlisted companies income exceeding (unmarried/married) EUR 30,000 is 34 % average 37.5 % »» Tax rate on capital income exceeding DKK 40,800 / 81,600 is 42 %

Preferential »» 25 % special income tax »» Highly skilled foreign »» Highly skilled foreign rate on non-residents (SINK) professionals can have a professionals can have a flat tax rate of 35 % if flat tax rate of 27 % »» Tax relief for foreign key personnel may apply if certain conditions are (+ labour market certain conditions are met contributions) in a met seven-year limited contract

66 State social security contributions

Employer »» Social security »» Percentages of the gross »» Compulsory Danish »» Social security contribution contribution: 31.42 % salary amount; labour market pension contribution: 14.1 % »» 16.36 % for employees Employer’s contribution: (ATP) DKK 2840 per »» Some municipalities born 1938–1952 »» 0.86 % social security month (2 / 3 paid by the have reduced rates (0 %, employer and 1 / 3 by the »» 6.15 % for employees contribution (0 % for 5.1 %, 6.4 %, 7.9 %, born 1937 or earlier employees < 16 years employee) 10.6 %) or > 68 years old) » Maternity leave (barsel. »» First employee may » qualify for a reduced »» 18.84 % (on average) dk) DKK 237.5 per rate of 10.21% if certain statutory pension full-time employee per conditions are met insurance premium quarter » FIB DKK 136 per »» 20.7 % for companies »» 0.65 % (2.6 % for salary » lacking permanent > EUR 2,083,500) full-time employee per establishment unemployment quarter insurance premium »» Public insurance scheme for employees (AES) 300– 1,100 per 17 – 64 years old full-time employee per »» 0.8 % (on average) quarter (industry accident insurance dependent) premium »» Contribution to trainee »» 0.07 % (on average) programs (AUB) 675.5 group life insurance per full-time employee premium per quarter Employee’s contribution »» The Danish Labor Market (deductions from net salary): Fund for Posted Workers. The contribution is »» 6.35 % (employees 17 > 52 and > 62 years old) or 1.80 DKK per quarter 7.85% (employees 53 > per fulltime employee 62 years old) »» 1.9 % unemployment insurance premium

E 67 Sweden Finland Denmark Norway

Property tax »» Tax base for property tax »» 0.93 % – 6 % of the tax »» 1 – 3 % of the public »» 0.2 % – 0.7 % of the tax is generally 75 % of the value of the property property valuation base marked value »» Commercial property: 1 % »» Industrial property: 0.5 %

II. VAT – obligation to register for VAT

Sweden Finland Denmark Norway

Business activity (if carried out in the given country)

Local taxable Companies that operate a Mandatory if the company Mandatory if the company Mandatory if the entity persons business for which the operates a VAT-applicable operates a VAT-applicable operates a VAT-applicable annual turnover does not business and the annual business and the annual business and the turnover exceed SEK 30,000 for the turnover exceeds turnover exceeds through 12 consequtive fiscal year are not liable to EUR 10,000 DKK 50,000. If the sales months exceeds register for VAT limit is exceeded during the NOK 50,000, excluding financial year, the company VAT is obliged to pay VAT on all turnovers

68 Foreign taxable The EUR 30,000 threshold The EUR 10,000 threshold The EUR 8,500 threshold Taxable persons with no persons for VAT registration does for VAT registration does for VAT registration does registered place of not apply to foreign not apply to foreign not apply to foreign business or residence in companies with no fixed companies with no fixed companies with no fixed the VAT area shall be place of establishment in place of establishment in place of establishment in registered through a Sweden Finland. If the sales limit is Denmark. If the sales limit representative. Entities exceeded during the is exceeded during the from EU/EEA countries financial year, the company financial year, the company that have agreements with is obliged to pay the VAT is obliged to pay VAT on all Norway on exchange of on all turnovers turnovers information and the collection of taxes do not need a representative

Reverse Charge in the construction industry

Local taxable Reverse Charge liability applies within the construction Reverse charge is only persons sector if certain conditions are met. Companies running a applicable on cross-border construction business are therefore liable for VAT on transactions of services Foreign taxable purchases. VAT registration is mandatory that may be rendered from persons a remote location No special rules apply for the construction industry

Intra-Community acquisitions

Local taxable A company must, in most A company must, in most A company must, in most N / A persons cases, report Swedish VAT cases, report Finnish VAT cases, report Danish VAT on purchases from another on purchases from another on purchases from another Foreign taxable EU country EU country EU country persons Tax rate 25 %, 12%, or 6 % Tax rate 24 %, 14 %, or Tax rate 25 % depending on the goods 10 % depending on the purchased goods purchased

E 69 Sweden Finland Denmark Norway

Distance selling

Mandatory If the total value of the If distance sales exceed the If a business is selling and If the turnover through 12 registration for goods sold as part of threshold of EUR 35,000 in delivering goods from consequtive months VAT distance selling in the the same calendar year, it another EU member state exeeds NOK 50,000, course of a given calendar is necessary to register for to private costumers excluding VAT year exceeds the amount VAT in Finland. The (distance sale) and the sales of SEK 320,000 threshold does not include exceed a threshold of If goods subject to excise the amount of VAT DKK 280,000 per year, it is duty are sold by a taxable required to register for VAT person of another EU in Denmark member state to a Swedish natural person, the obligation to register for VAT arises starting from the date of completing the distance selling transaction

Voluntary Voluntary registration for Voluntary registration for Voluntary registration for Voluntary registration for registration VAT is possible for certain VAT is possible VAT is possible VAT is possible for cetain exempt supplies, for businesses, most example, letting out of commonly used for rental business premises under of real estate certain circumstances

70 Duration of the procedure for registering for VAT

»» The application must be »» The general BIC-number »» The application must be »» Application must be filed within 2 weeks in principle is received filed within 8 days prior filed when turnover prior to the date of when the tax authorities to the date of operating exceeds NOK 50,000 operating business have received the business excluding VAT application »» The process of »» The VAT registration and »» The process of registration takes about »» However, the VAT receiving the registration normally 4 – 6 weeks from the registration and VAT-number can take up takes about 2 – 4 weeks date the application is receiving the to 1 week from the date the submitted to the Tax VAT-number can take up application is submitted Agency to 4 – 6 weeks to the tax agency

Retroactive »» Backdating is not »» Backdating is not »» Backdating is not »» Possible to apply for a registration possible in the case of a possible in the case of a possible in the case of a refund of input VAT delayed registration delayed registration delayed registration from before the registration »» However, the »» However, the »» However, the entitlement entitlement to deduct entitlement to deduct to deduct input tax has a input tax has a input tax has a retroactive effect to the retroactive effect to the retroactive effect to the date on which the date on which the date on which the obligation to register for obligation to register for obligation to register for VAT arose VAT arose VAT arose

E 71 III. Personal income tax – tax liability for foreign employees

Sweden Finland Denmark Norway

Employer »» The company withholds »» Obligation to withhold »» The employer withholds »» The company makes tax with PE taxes and pays social tax-at-source (for tax and pays social deductions and pays security contributions employees staying less security contributions social security than six months) or from the first day of contributions »» However, if a regular withholding tax residentce in Denmark non-resident employee »» Non-residents intending (for employees staying is working less than »» No obligation for the to stay in Norway for 6 months in Sweden, a more than 6 months) employer to pay social more than 183 days over preferential tax rate of »» No obligation for the security contributions if a period of 12 months, 25 % of the tax basis employer to pay social an A1 certificate is in or more than 270 days applies (SINK application security contributions if place over a period of 36 required). an A1 certificate is in months, will be tax liable »» The employee will be place to Norway for all income »» No obligation for the fully liable to taxation in employer to pay social Denmark if the employee and assets in the relevant security contributions if stays in Denmark for income year an A1 certificate is in more than 6 month or if »» No obligation for the place the employee takes up employer to pay social residence in Denmark security contributions to Norway if an A1 »» Double taxation treaties (DTT) are to be certificate is in place considered in this case

72 Employer »» The employer does not »» The employer does not »» Employees present in »» Persons who receive lacking PE withhold tax. Instead, withhold tax Denmark for less than six salary from Norwegian the employees are »» Persons present in months are considered employers will be tax obliged to register for a Finland for a maximum non-residents (183 days liable to Norway for the special A-tax and make of six months are in a 12 month period) income they earn in monthly tax payments considered non-residents »» Employees present in Norway themselves »» Employees have to make Denmark for more than »» Persons hired out to a »» If applicable, social monthly tax payments six months are client that is based or security contributions by themselves unless the considered residents has a permanent are paid at a reduced employer has registered »» Resident employees are operating base in rate (21.54 %) by the as an employer on a fully liable to taxation in Norway will also be tax employer voluntary basis Denmark from day one liable to Norway for the »» The employer should and the employees have income they earn in »» Taxation only on income Norway submit a yearly income received from Finland with to make monthly tax statement to the Tax a fixed rate of 35 % of tax payments by themselves »» The company makes tax Agency, regardless of at source. Taxation i.e. register for Danish deductions and pays whether the company according to a progressive tax purposes in Denmark social security. Taxation constitutes a PE or not. scale instead of the 35 % is the same rate as for The income statement is flat tax at source possible residents the basis for the upon request, on the »» No obligation for the employee’s tax return condition that you are a employer to pay social resident of a country security contributions to within the European Norway if an A1 Economic Area or of a certificate is in place country that has a bilateral tax treaty with Finland »» An Employer Payroll Report is always to be submitted to the Tax Administration on wages paid to employees who stay in Finland for more than 6 months

E 73 Sweden Finland Denmark Norway

Annual tax »» Residents in Sweden »» Residents must file »» Residents must file »» All employees in Norway income must file income tax income tax returns in income tax returns in must provide the tax statements for returns in Sweden Finland Denmark authorities with employees information regarding »» Generally no obligations »» Non-residents do not »» Non-residents are for nonresidents to file a have to file income tax generally obliged to file income, assets, and tax return regarding returns in Finland income tax returns in income deductions (tax income from Denmark returns) so that the »» However, non-residents employment correct amount of tax usually do have to report may be calculated the income earned in Finland when they file their income tax returns in their home country

IV. Corporate income tax – criteria for permanent establishment (national)

Sweden Finland Denmark Norway

General criteria A fixed place of business A fixed place of business A fixed place of business A fixed place of business through which the through which the through which the business through which the business of an enterprise is business of an enterprise is of an enterprise is wholly or business of an enterprise is wholly or partly carried on wholly or partly carried on partly carried on wholly or partly carried on

Building site and/ 6 or 12 months depending on 6 or 12 months depending on 6 or 12 months depending on 6 or 12 months depending on or construction the double taxation treaties the double taxation treaties the double taxation treaties the double taxation treaties

Representation Business carried on by a dependent representative is treated as a permanent establishment; a dependent is a person who legally and financially depends on the foreign enterprise he or she represents. The person carries on business in the interest of the foreign enterprise; its usual business is in line with business carried on by the enterprise he or she represents

74 V. Tax Deadlines

Sweden Finland Denmark Norway

VAT »» Companies with »» On the 12th day of the »» Companies with »» Declaration and payment turnover exceeding SEK second following turnover exceeding of VAT is due on the 10th 40 million: on the 26th month/ quarter DKK 50 million: monthly day of the 2nd month day of the following payments on the 25th following the bimonthly »» VAT EU recapitulative month day of the following taxation period. statement on the 20th month (for June, the However, for the 3rd »» Companies with a day of the next month date is 18 August) period (May & June) the turnover of SEK 1 – 40 th th »» Payment by the 12 day due date is August 31 million: on the 12 day of the second following »» Companies with of the 2nd month month turnover of DKK 5 – 50 »» Companies with a following the quarter/ million and new turnover of less than month established companies: NOK 1 million may quarterly payments on submit an annual »» Companies with a st day of the 3rd turnover of less than the 1 declaration month following the SEK 1 million: annual quarter declaration »» Companies with a turnover of less than DKK 5 million: semi-annual declaration on the 1st day of the 3rd month after the period

E 75 Sweden Finland Denmark Norway

Income tax

Withheld by »» On the 12th day of the »» On the 12th day of the »» For companies with »» On the 15th day after the the payer following month following month / A-tax under DKK 1 bimonthly period quarter million or/and labour market »» Payment by the 12th day of the following month »» For companies with A-tax over DKK 1 million or/and labour market contribution over DKK 250,000: on the last working day in the following month

State social »» On the 12th day of the »» On the 12th day of the »» Same as income tax »» On the 15th day after the security following month following month / bimonthly period contributions quarter »» Annual employer information returns on the 31 January the following year »» Payment by the 12th of the following month

Corporate »» Prepayment on the 12th »» Prepayment on the 23rd »» Prepayment on March »» Prepayment on February income tax day of the following day of every month 20 and November 20 15 and April 15 in the month year after the end of the »» Company income tax »» Company income tax financial year »» Yearly tax returns. returns within 4 months returns within 6 months If financial year = after the end of the after the end of the »» Yearly tax returns, due calendar year, then: financial year financial year date May 31

76 »» Paper form: July 1 »» Supplemental »» Supplemental »» Supplement pre-payment pre-payment of income pre-payment of income within by May 31 to »» Electronically: August 1 tax to avoid paying delay tax to avoid paying avoid delay interest interest on the last day non-deductible interest »» Final tax assessment in of the following month on March 10 or October; any remaining after the close of the November 20 tax due in 3 weeks fiscal year »» The annual tax return is thereafter available in October

Property tax »» As a part of the »» On September 3 and »» On January 3 and July 2 »» Due dates are set by each preliminary tax which October 15 community council has to be paid on the 12th day of the following month

E 77 VI. Transfer pricing

Sweden Finland Denmark Norway

Main types of »» Relationships where one party has authority over the »» Taxpayers who are under »» Relationships where one relationships other, or a third party either alone or jointly with its the control of either a party has authority over that constitute circle of acquaintances has authority over both of the natural person or legal the other, or a third affiliation parties entity, or taxpayers who party either alone or have control over jointly with its circle of »» Authority can be based on the holding of capital of the other party, holding votes brought by the shares of the another legal entity acquaintances has other party, or right to nominate members to the other authority over both of party’s board of directors the parties »» Authority can be based on the holding of capital of the other party, holding votes brought by the shares of the other party, or right to nominate members to the other party’s board of directors

Obligation to 2007 2005 2007 / 2008 provide TP documentation in force since

78 Main criteria for »» Cross-border »» Cross-border »» All intercompany »» All transactions with mandatory TP transactions between transactions between transactions between related parties, both documentation related parties must be related parties must be related parties must be domestic and documented according documented according docmented according to cross-border to the provisions of the to the provisions of the the Tax Control Act »» Exemptions if less than Taxation Procedure Act Taxation Procedure Act »» Relieve from 250 employees and »» Relieves from »» Relieves from documentation if the tax either less than NOK 400 documentation documentation payer, on a group level, million in revenues or requirements in case the requirements in case the has less than 250 NOK 350 million in amount of business amount of business employees and either a balance sheet total transactions between transactions between balance sheet of less related parties does not related parties does not than DKK 125 million or exceed SEK 25 million exceed EUR 500,000 a revenue of less than (goods) or SEK 5 million within a fiscal year per DKK 250 million (other transactions) counterparty within a fiscal year per counterparty

E 79 Sweden Finland Denmark Norway

Information »» Description of business »» Description of the group, »» Description of business that should be including the legal group »» Description of relationships with affiliated enterprises »» Description of structure included in TP relationships with documentation »» Sufficient specification of business transactions between related parties and between head office and »» Description of the affiliated enterprises Danish entity and its a permanent establishment »» Sufficient specification intercompany of business transactions »» Functional analysis of business transactions between transactions related parties and between head office and a between related parties permanent establishment »» Description of each and between head office intercompany and a permanent »» Comparability analysis including information regarding transaction establishment the used comparables »» Comparability analysis »» Functional analysis of »» Description of transfer pricing method and its for each intercompany business transactions application transaction, including between related parties information about the and between head office transfer pricing policy and a permanent and method applied establishment »» Analysis of how the »» Comparability analysis transfer prices satisfy the including information arm’s length principle regarding the used comparables »» List of any written intercompany »» Description of transfer agreements regarding pricing method the controlled transactions »» A taxpayer is not required to do a database study until the tax authorities requests it

80 Permitted »» Not regulated by law; Tax Administration recommends to use methods outlined in the OECD Guidelines methods in »» Transaction-based methods (Comparable Uncontrolled Price Method, Resale Price Method, Cost-Plus Method) take order of precedence over profit-based methods (Transactional Net Margin Method, Profit Split Method) priority

Preferable »» According to the principles of the Tax Administration, »» The search takes place in »» According to the database for comparables are primarily searched from the market publicly available principles of the Tax financial area of the company in question (usually meaning the databases (fees may Administration, analysis domicile) apply) comparables are primarily searched from »» Foreign comparables are acceptable if they fulfill the OECD’s conditions of qualification the market area of the company in question (usually meaning the domicile) »» Foreign comparables are acceptable if they fulfill the OECD’s conditions of qualification

Submission »» 60 days after request by »» Six months after the end »» Documentation should »» Documentation should deadline the tax authorities of the financial year, be available within 60 be available within 45 which, at the same time, days after requested by days after requested by »» The earliest request for submission is the filing is the earliest request the tax authorities the tax authorities date of the corporate delivery income tax returns of »» 60 days after request by the respective fiscal year the tax authorities »» Further clarification such as information regarding comparables must be presented within 90 days upon the tax authorities’ request

E 81 Sweden Finland Denmark Norway

Period of risk »» 6 years »» The current year and 5 »» May 1, in the sixth year »» 10 years of tax audit preceding years after the end of the calendar year following the income year

Fines for failure »» No specified fines for »» EUR 25,000 at most »» DKK 250,000 per company, »» No specified fines to submit TP failure to submit TP »» In addition, there is a per income year that is »» Will depend on the case documentation documentation common penalty at a missing documentation, and the adjusted taxable maximum of 30 percent and additional 10 % of any income of the adjusted taxable income increase. If the income company later files sufficient documentation, the fine is reduced to DKK 125,000

Possibility to »» Possible to file an »» Currently not regulated »» Unilateral and bilateral »» Currently not regulated conclude an APA-application by law »» APAs are available by law Advance »» Possible to file an APA Pricing application in the course Agreement of Mutual Agreement Procedures

Price of APA »» Free of charge »» Free of charge »» Free of charge »» N/A

Country-by- »» To be filed by ultimate »» To be filed by ultimate Country group parent 12 months group parent 12 months reporting after the end of the after the end of the fiscal year if group fiscal year if group requirements are met requirements are met

Country-by- »» To be filed by »» To be filed by a Country non-ultimate parent (non-ultimate) group notification group company before company before end of end of fiscal year fiscal year

82 Stockholm

E 83 F. Accounting

I. Submission dates for annual financial statements

Sweden Finland Denmark Norway

»» Annual financial statements »» An Annual Financial »» An Annual Financial »» Annual financial statements are approved by the Annual Statement has to be finalized Statement has to be finalized are approved by the Annual General Meeting of within four months after the within five months after the General Meeting of Shareholders. The meeting is end of the accounting period end of the accounting period Shareholders held no more than six months and it has to be submitted for and it has to be submitted for »» The meeting is held no more after the end of the financial registration within a period of registration within a period of than six months after the end year six months after the end of five months after the end of of the financial year the accounting period the accounting period »» The approved annual financial »» According to the Accounting statements must be filed at Act, the approved annual the Swedish Companies financial statements must be Registration Office filed at the Norwegian (Bolagsverket) no later than Register of Company seven months after the end of Accounts one month after the financial year approval and not later than July 31

84 II. Contents / Structure of annual financial statements

Sweden Finland Denmark Norway

General annual financial An annual financial An annual financial General annual financial statements consist of: statement for a limited statement for a limited statements consist of: »» Directors report company consists of: company consists of: »» Director’s report »» Balance sheet and income »» Director’s report »» Director’s report »» Balance Sheet and Income statement »» Profit and loss account »» Income statement statement »» Notes on the financial »» Balance sheet »» Balance sheet statement »» Notes on the financial statements which include the »» Cash flow statement »» Statement of accounting statements applied accounting policies »» Statement of accounting policies »» Cash flow statements (not Larger companies must prepare policies »» Explanatory notes mandatory to small a cash flow statement companies) »» Explanatory notes Larger companies must prepare More extensive requirements An annual financial a cash flow statement for large companies and even statement for a small more extensive for listed entity* consists of: companies »» Profit and loss account »» Balance sheet »» Statement of accounting policies »» Explanatory notes which also include some information replacing the director’s report *No more than one of the following limits are exceeded during the last two years: net sales of EUR 7.3 million, balance sheet total of EUR 3.65 million, or personnel of 50 on average

F 85 III. Acceptable accounting standards

Sweden Finland Denmark Norway

The accounting principles The accounting principles The accounting principles The accounting principles applied by a company must be applied by a company must be applied by a company must be applied by a company must be consistent with the consistent with the consistent with the consistent with the requirements and general requirements and general requirements and general requirements and general principles of the Annual principles laid down by the principles laid down by the principles laid down by the Accounts Act. The following Finnish Accounting Act, etc. Danish Accounting Act etc. Norwegian Accounting Act etc. regulations are applied: Companies are free to choose Companies are free to choose Companies are free to choose between Finnish generally between Danish generally between Norwegian generally »» Swedish GAAP is applied. Larger companies must apply accepted accounting principles accepted accounting principles accepted accounting principles the principle-based (GAAP) and International (�rsregnskabsloven) and (GAAP) and International framework K3. Smaller Accounting Standards Interntional Financial Reporting Accounting Standards companies can choose the (IFRS-standards and related Standards (IFRS-standards and (IFRS-standards and related rule-based framework K2 interpretations ISC/IFRIC) related interpretations ISC/ interpretations ISC/IFRIC) IFRIC) » Companies whose securities » Listed companies must apply »» Listed companies must apply » » IFRS. The Swedish are traded on a regulated »» Companies whose securities the International Accounting recommendations RFR 1 and market are obliged to apply are traded on a regulated Standards RFR 2 should also be applied the International Accounting market are obliged to apply to ensure compliance with Standards for their the International Financial the Annual Accounts Act consolidated financial Reporting Standards for their statements consolidated financial statements »» Since 2014, the Danish Accounting Act allows companies to present their annual reports in English only as well

86 G. Audit

I. Statutory audit requirement – criteria

Sweden Finland Denmark Norway

»» Limited liability companies, »» An auditor must be appointed »» Limited liability companies »» In general, all businesses with branches, and partnerships for a corporation or and partnerships (K/S, I/S) revenues exceeding NOK 5 (HB) with a legal entity as a foundation and an audit must with a legal entity as a million, private and public co-owner are required to be carried out in accordance co-owner are required to limited liability companies, have their annual financial with the provisions laid down have their annual financial and partnerships with more statements audited by an i.a. in the Auditing Act statements audited by an than 5 partners are obliged to auditor if they meet more auditor if they meet more appoint an auditor. »» Generally, a corporation does than one of the criteria below than one of the criteria below not have to appoint an »» Private limited liability for two years in a row: for two years in a row: auditor if it meets no more companies can choose not to »» The average no of employees than one of the following »» Turnover of > DKK 8 have an audit if the revenues has been more than 3 conditions in both the million (EUR 1,075,000) are less than NOK 5 million, previous financial year and the balance is in total less »» Balance sheet total > SEK 1.5 »» Balance sheet total > the financial year before it: million DKK 4 million than NOK 20 million and the (EUR 537,500) number of employees does »» Revenue of > SEK 3 million not exceed 10 »» The average no. of full-time employees has been more than 12

G 87 Sweden Finland Denmark Norway

Other »» Balance sheet total A mandatory audit can be exceeding EUR 100,000 substituted with an extended »» Listed companies are required review for companies if they »» Net sales or comparable to have an authorized public meet more than one of the accountant regardless of the revenue exceeding EUR 200,000; or criteria below two years in a size criteria row: * Only the most common type »» The average number of employees exceeding 3 »» Turnover of > DKK 8 million of enterprises is listed (EUR 1,075,000) and < »» An auditor shall, however, DKK 72 million always be appointed for a (EUR 9.7 million) corporation whose principal activities consist »» Balance sheet total > DKK 4 of the owning and holding million (EUR 537,500) and < of securities and which DKK 36 million exercises significant (EUR 4.8 million) influence »» The average no. of full-time employees has been more than 12 and less than 50 Other

»» Listed companies are required to have an authorized public accountant regardless of the size criteria

88 H. Key contacts

I. Chambers of Commerce

Sweden Finland Denmark Norway

Chambers of The German-Swedish The German-Finnish The German-Danish The German-Norwegian Commerce Chamber of Commerce Chamber of Commerce Chamber of Commerce Chamber of Commerce Valhallavägen 185 Mikonkatu 25 Kongens Nytorv 26, 3.sal Drammensveien 111 B SE - 115 53 Stockholm FI - 00100 Helsinki DK - 1050 K�benhavn K NO - 0273 Oslo +46 8 665 18 00 +358 9 612 2120 +45 33 91 33 35 +47 22 12 82 10 www.handelskammer.se www.dfhk.fi www.handelskammer.dk www.norwegen.ahk.de

H 89 II. Rödl & Partner

Sweden Finland Denmark Norway

Legal & Tax Rödl & Partner Nordic AB Rödl & Partner LEAD Rödl & Partner Rödl & Partner Nordic AB Drottninggatan 95A Attorneys-at-Law Ltd Frederiksholms Kanal 20, st. Drottninggatan 95A SE-113 60 Stockholm Kalevankatu 6 Dk-1220 Copenhagen K SE-113 60 Stockholm Contact person: FI-00100 Helsinki Contact person: Contact person: Klas Erviken Contact person: Alexandra Huber Klas Erviken Head of Legal & Tax Timo Huhtala Attorney-at-Law and Head of Legal & Tax +46 76 804 87 80 Attorney-at-Law and Partner Partner +46 76 804 87 80 [email protected] +358 40 503 531 2 +4544 45 50 04 [email protected] [email protected] [email protected]

Audit Rödl & Partner Nordic AB Rödl & Partner Nordic AB Rödl & Partner Nordic AB Drottninggatan 95A Jungmansgatan 12 Jungmansgatan 12 SE-113 60 Stockholm SE-211 19 Malmö SE-211 19 Malmö Contact person: Contact person: Contact person: Mathias Racz Philipp Grymer Philipp Grymer Authorized public accountant Legal Counsel Legal Counsel +46 8 579 309 01 +46 76 804 85 49 +46 76 804 85 49 [email protected] [email protected] [email protected]

Outsourcing Rödl & Partner Malmö Satakerta Rödl Rödl & Partner Nordic AB Rödl & Partner Nordic AB Jungmansgatan 12 & Partner Oy Jungmansgatan 12 Jungmansgatan 12 SE-211 19 Malmö Kalevankatu 6 SE-211 19 Malmö SE-211 19 Malmö Contact person: FI-00100 Helsinki Contact person: Contact person: Lars-Göran Larsson Contact person: Philipp Grymer Philipp Grymer CEO and Autorized Public Kati Jalojärvi, CEO, Legal Counsel Legal Counsel Accountant Executive MBA, KLT +46 76 804 85 49 +46 76 804 85 49 +46 40 70 215 38 02 +358 40 586 6555 [email protected] [email protected] [email protected] [email protected]

90 I. Own contacts and notes

I 91 92 I 93 94 I 95 About us

As an integrated professional services firm, Rödl & Partner is active at 102 wholly-owned locations in 46 countries. We owe our dynamic success in the service lines audit, legal, management and IT consulting, tax consulting as well as tax declaration and BPO to our approx. 4,000 entrepreneurial minded partners and colleagues.

The history of Rödl & Partner goes back to its foundation as a solo practice in 1977 in Nuremberg. Our aspiration to be on hand wherever our internationally-active clients are led to the establishment of our first own offices, commencing with Central and Eastern Europe in 1989. Alongside market entry in Asia in 1994, the opening of offices in further strategic locations followed, in Western and Northern Europe in 1998, the USA in 2000, South America in 2005 and Africa in 2008.

Our success has always been based on the success of our German clients: Rödl& Partner is always where its clients see the potential for their business engagement. Rather than create an artificial network of franchises or affiliates, we have chosen to set up our own offices and rely on close, multidisciplinary and cross-border collaboration among our colleagues. As a result, Rödl & Partner stands for international expertise from a single source.

Our conviction is driven by our entrepreneurial spirit that we share with many, but especially German family-owned companies. They appreciate personal service and value an advisor they see eye to eye with.

Our ‘one face to the client’ approach sets us apart from the rest. Our clients have a designated contact person who ensures that the complete range of Rödl & Partner services are optimally employed to the client’s benefit. The ‘caretaker’ is always close at hand; they identify the client’s needs and points to be resolved.

96 The ‘caretaker’ is naturally also the main contact person in critical situations.

We also stand out through our corporate philosophy and client care, which is based on mutual trust and long-term orientation. We rely on renowned specialists who think in an interdisciplinary manner, since the needs and projects of our clients cannot be separated into individual professional disciplines. Our one-stop-shop concept is based on a balance of expertise across the individual service lines, combining them seamlessly in multidisciplinary teams.

What sets us apart

Rödl & Partner is not a collection of accountants, auditors, lawyers, management, and tax consultants working in parallel. We work together, closely interlinked across all service lines. We think from a market perspective, from a client’s perspective, where a project team possesses all the capabilities to be successful and to realise the client’s goals.

Our interdisciplinary approach is not unique, nor is our global reach or our particularly strong presence among family businesses. It is the combination that cannot be found anywhere else – a firm that is devoted to comprehensively supporting German businesses, wherever in the world they might be.

I 97 Disclaimer Nordc States Almanac 2018, This handbook is a non-binding information service and serves for general informational purposes only. It is Edition 2018 regarded neither as a legal, fiscal, or management consultancy nor as a substitute for obtaining individual advice. Although we have taken the greatest care in retrieving and selecting the information, Rödl & Partner assumes Editor: Rödl & Partner Riga no liability for its accuracy, topicality and completeness. The information contained herein does not relate to a Kronvalda bulv. 3-1 particular issue of any specific individual or legal entity, therefore further professional advice should always be LV-1010 Riga sought if appropriate. Rödl & Partner assumes no responsibility for any decisions made by the reader based on Tel.: +371 (67) 33 81 25 the information provided in this handbook. Our contact persons will be pleased to assist with any queries you E-Mail: [email protected] may have at all times.

Responsible for content: The entire content of the handbook and the technical information available on the Internet is the intellectual Jens-Christian Pastille - [email protected] property of Rödl & Partner and is under copyright protection. Users may only download, print or copy the content Kronvalda bulv. 3-1, LV-1010 Rīga of this handbook for their own use. No modifications, duplication, dissemination or publication of the content or parts thereof, neither online nor offline, may be made without the prior written agreement of Rödl & Partner.

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„Each and every person counts“ — to the Castellers and to us.

Human towers symbolise the Rödl & Partner corporate culture in a unique way. They personify our philosophy of solidarity, balance, courage, and team spirit. They stand for the growth that is based on own resources, the growth which has made Rödl & Partner the company we are today.

„Força, Equilibri, Valor i Seny“ (strength, equilibrium, valour and common sense) is the Catalan motto of all Castellers, describing their fundamental values very accurately. It is to our liking and also reflects our mentality. Therefore Rödl & Partner embarked on a collaborative journey with the representatives of this long-standing tradition of human towers — Castellers de Barcelona — in May 2011.

The association from Barcelona stands, among many other things, for this intangible cultural heritage.

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