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What is UK company's obligation for employee moving to Sweden?

I have an employee being paid out of a UK Limited corporation who has moved to Sweden. I would like to continue to pay him out of the UK Payroll, without withholding any UK taxes. What is the employer obligation in Sweden for this employee? Is there a resource in Sweden to help in this situation? Thank you!


Topic Expert
Stephen Wares
Title: International Expansion Expert
Company: CCW Business Solutions
(International Expansion Expert, CCW Business Solutions) |

If the employee is an employee of the UK Company now residing in Sweden, he/she is potentially exposing the UK Company to trading and employment liability in Sweden. There is also a strong permanent establishment risk, meaning the UK Company could be deemed taxable in Sweden.

How long does this individual intend to stay in Sweden? More than 183 days? If so, they are very likely to be deemed a Swedish tax resident and fully liable to Swedish taxes.

Is this person a UK national, Swedish national, EU national or other? If 'other' does he/she have the correct paperwork that allows him/her to work in Sweden?

As an employer in Sweden, you have an obligation to withhold taxes and social security from your employee's paycheck and also pay employer's social security on top of that (c. 33%). Failure to do so is a risk that the UK Company is running and this liability will accrue over time.

It is possible to register the UK Company as an employer in Sweden and to process payroll each month for this individual. This will help to resolve any of the employment related risks (you should also provide this hire with a Swedish compliant employment agreement) but will not remove the permanent establishment risk.

I am based in Palo Alto, CA and would be happy to talk with you about your scenario. I can be contacted at stephen [dot] waresatcrowecw [dot] co [dot] uk

Achaessa James
Title: Product Manager
Company: National Center for Employee Ownership
(Product Manager, National Center for Employee Ownership) |

If this employee has any equity compensation arrangements (e.g., options, restricted stock, RSUs, etc) also be sure to consult with Swedish counsel about taxation on those awards. Some countries tax the portion of the awards that vest while the employee is working in that country, whether or not the employee was a resident when the award was made or exercised. The Baker & McKenzie Global Equity Services 40-country matrix should give you a general idea of the issues you should look out for, here's the link:


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