How to Start a US LLC From Sweden

Sweden and the US have had a comprehensive income tax treaty in force since the mid-1990s, covering dividends, interest, royalties, and residency tie-breaker rules for people both countries might otherwise claim as tax residents. In practice, the treaty and Sweden's domestic foreign tax credit matter less for a typical single-member LLC than their existence might suggest, since a non-resident-alien-owned LLC earning non-US-source income usually owes $0 US federal tax to begin with, leaving little for either mechanism to offset, though this becomes far more relevant once Sweden's CFC rules actually apply to a portion of the LLC's income.

Putting it together: form the LLC (Wyoming and Delaware remain the two most common choices), get the EIN using the international applicant line above, open a Mercury or Relay account without either restricting Sweden, and get a Swedish accountant's specific confirmation of whether your LLC's income qualifies as low-taxed under Chapter 39a and whether the current whitelist offers any relief, since Sweden's lack of an active-income carve-out means this classification question matters more here than in almost any other country in this series. Founders planning to relocate abroad should also confirm the essential-connection analysis before assuming a change of address alone ends their Swedish tax exposure.

On the funding side, Sweden's EU and EEA membership means the krona and cross-border capital movement operate freely, with no capital controls, no remittance caps, and no central-bank registration requirement for investing in a foreign company. Funding a US LLC from Sweden is a standard international bank transfer with no special approval process required.

Sweden's outsized tech and startup scene, the country that gave the world Spotify and Klarna, has produced a steady wave of Swedish founders building SaaS products and consulting practices for global clients. For these founders, a US LLC offers direct Stripe and PayPal access as a genuine US entity, USD invoicing that avoids krona conversion friction, and formation considerably simpler than a Swedish aktiebolag built specifically for international clients. What Swedish founders need to understand before forming one, though, is that Sweden runs one of the strictest CFC regimes in Europe, one that catches a wider range of income than almost any other country covered in this series, and getting that risk assessment right matters more here than in most places.

Getting an EIN as a Swedish founder works exactly like it does for any other non-US resident. Without a US Social Security Number or ITIN, you can't use the IRS's online EIN application — you'll file Form SS-4 and either call the IRS's international applicant line (267-941-1099, staffed 6am-11pm ET, for international applicants only) to receive the EIN over the phone, or fax the SS-4 (855-215-1627 from within the US, 304-707-9471 from outside) for a roughly 4-business-day official turnaround that often takes 1-2 weeks in practice. Mailing to Cincinnati, OH takes 4-5 weeks and should be a last resort. On Line 7b, write 'Foreign' or 'N/A' rather than leaving it blank. The responsible party listed must be the actual Swedish owner, not EasyBrise or any formation agent. If you lose your CP 575 confirmation notice, request Form 147C, a letter, not a duplicate, instead. Don't skip Form 5472 plus a pro forma 1120 each year; the penalty for missing it starts at $25,000.

Here's the part that makes Sweden genuinely more demanding than most other countries covered in this series: unlike Colombia, Turkey, Indonesia, Poland, and Portugal, all of which exempt active business income from current CFC attribution once the low-tax test is met, Sweden does not carve out active income at all. If your LLC is classified as low-taxed under the Swedish calculation, and a non-resident-alien LLC paying $0 US federal tax typically is, the CFC rules can attribute all of its income to you currently, SaaS subscription revenue, e-commerce sales, consulting fees included, not just the passive categories other countries' CFC tests target. This means the usual 'my LLC runs an active business, so I'm probably fine' reasoning that protects founders in several other countries in this series doesn't reliably apply in Sweden, and the low-tax classification question becomes the entire ballgame.

Sweden does maintain a 'white list' of approved countries, an appendix to Chapter 39a of the Income Tax Act, where income from an entity resident in a listed country is exempt from CFC taxation regardless of the entity's actual effective tax rate. Whether the United States, or income of the specific type your LLC generates, currently appears on this list in a way that shields a typical single-member LLC is a genuinely fact-specific question that changes as the list is periodically updated, and it's not something to assume either way without checking current Skatteverket guidance or a Swedish accountant's read. Given how much rides on this classification, given Sweden's active-income exposure described above, this is one of the first things worth confirming rather than one of the last.

Sweden's CFC rules, set out in Chapter 39a of the Income Tax Act, apply when a Swedish resident, alone or together with related parties in an 'interest community,' holds at least 25% of the capital or voting rights in a foreign legal entity at the end of the tax year, a threshold a single-member LLC's 100% owner clears immediately. The second condition is that the foreign entity must be low-taxed, meaning its income, recalculated under Swedish tax rules, would be taxed at a rate below roughly 11.3% to 11.8% (the exact threshold is periodically updated and expressed as a share of Sweden's corporate tax rate). If both conditions are met, the Swedish shareholder is taxed annually on their proportionate share of the foreign entity's income at ordinary Swedish rates, whether or not anything is distributed.

On the banking side, Sweden is not on Mercury's or Relay's prohibited-country list, and Swedish founders go through the same standard non-resident application process, passport, LLC formation documents, and EIN, as founders from most other countries in this series. There's no distinct Sweden-specific hurdle at the account-opening stage; the genuine complexity for Swedish founders sits entirely in the CFC classification question above.

Sweden's CFC rules also include an exemption for entities resident within the European Economic Area, provided the Swedish shareholder can demonstrate the entity is genuinely established and conducting real economic activity there. As with the equivalent exemptions in Poland and Portugal covered elsewhere in this series, this specific safe harbor doesn't extend to entities outside the EEA, a US LLC, however substantively staffed and operated, doesn't qualify simply because the US isn't an EEA member. Combined with the lack of an active-income carve-out, this leaves the whitelist question above as the most consequential factor determining a Swedish founder's actual CFC exposure.

One more wrinkle worth planning around: Swedish tax residency doesn't necessarily end the moment you leave the country. Sweden's 'essential connection' test (väsentlig anknytning) can treat a departing Swedish citizen or long-term resident as still fully tax resident, and therefore still subject to CFC rules, for up to five years after leaving, if they retain ties such as a home available for their use, a spouse remaining in Sweden, or a directorship or board seat at a Swedish or foreign company, which can include acting as the manager of your own US LLC. Founders who assume relocating abroad ends their Swedish CFC exposure should confirm the essential-connection analysis specifically rather than treating a change of address alone as sufficient.