Before you get too excited and move your family business to Sweden, there is, of course, no best place in the world to have a family business. The reason why businesses thrive are based on many factors, and many of those are unquantifiable.
But Sweden has a number of quantifiable factors that make it a pretty good place to have a family business. A big positive factor is one that isn’t usually associated with the country, and that’s low taxes. Like many Nordic countries, Sweden has a reputation as a high tax country, but when it comes to family businesses it is completely the opposite. In fact, Sweden does not impose any taxes on retirement transfers or transfers on inheritance. No other major developed economy on earth is so generous to family businesses when it comes to tax treatment.
For those so inclined to look at how Sweden stacks up against other countries, a full analysis of the how family businesses are taxed in many countries is provided by a recent KPMG study. The tax regime for family businesses was a big reason why Ingvar Kamprad, the founder of the retail group IKEA, recently decided to move back to Sweden from Switzerland. Yes, Sweden is a more tax-friendly jurisdiction for family businesses than Switzerland, which has always been associated as a low tax country.
But there are other reasons for liking Sweden if you’re a family business. These include some of the best examples of well-managed family businesses to draw inspiration from. Here’s three of them:
H & M Hennes & Mauritz
The retail clothing company H&M is among one of the best in the business. It’s also known as having great family business governance, particularly when it comes to succession. Now run by the third generation of the Persson family, the two previous generations passed over the business to the next when they were in their sixties.
The Wallenberg family is better known than the business they run, the investment group, called Investor. The family are respected greatly as exemplars of high business standards in the best tradition of family businesses.
Kinnarps is a great example of a mid-sized Swedish family business. Founded in 1942 by husband and wife Jarl and Evy Andersson, 74 years later the office furniture business is still 100% family owned, but has also successfully brought in professional managers to grow the company.
One downside – a very high top rate of income tax, which currently stands at 57%. Otherwise, Sweden is a pretty good place to have a family business.