Five ways Sweden should help foreign small business owners

Five ways Sweden should help foreign small business owners
What do small businesses run by international residents need from Sweden? Photo: Jonas Ekströmer/TT
Many businesses across Sweden, as is the case across the world, have been severely affected by the consequences of the coronavirus pandemic. It's often small businesses, without cash reserves or large buffers, that bear the brunt of crises, so what do they need to survive?

Business owners in Sweden have had access to a range of packages, including temporarily reduced or deferred taxes, rent reductions for certain businesses, and loan guarantees.

But with an unclear outlook and many business owners having to rethink their whole business model, what do they need to be able to survive long-term?

These five ideas come from The Local readers who own small businesses. When we asked how they had been affected by the pandemic, some said they had lost the majority of their income while others had been less affected and some won't know the true extent of the impact for some time to come.

1. Advertise help available clearly

Several business owners have told The Local they have struggled to work out what support they are eligible for, and how to apply, without strong Swedish language skills.

“I believe that the information out there needs to be advertised better. The financial help at the beginning was woolly, but now once you find it it is clearer. I applied for a loan from the bank and Almi, but I have received no answer from them, and this was over a month ago,” said one business owner in Jämtland.

A business owner in Västra Götaland described English language support as “terrible”, and said that due to the pandemic they had stopped using an accountant and begun doing this themselves, “which again is not easy in English”.  

You can find English-language information for businesses on Verksamt and from the Swedish government.

2. Think long-term

Many businesses work several months in advance, meaning they won't see the real effects of the pandemic until later in 2020 or even next year.

For others, the long-term consequences of the situation, such as global travel restrictions or changes to how large events are run, may change how businesses can run in the future.

A lot of the support available in Sweden has been time-limited, out of necessity, for example support packages based on income levels between March and May of 2020. But this won't cover all the companies who feel the effects of the pandemic. 

“The support in place is helpful but uncertain if it will carry me through in a worse case or even a bad scenario. I'm not there currently but the future doesn't look encouraging, and in my business the effects won't be realised until later,” American business owner Jim Osmundsen in Trelleborg told The Local.

One business owner in northern Sweden had been forced to let employees go after losing 70 percent of their business income, but the only benefit they had been eligible for was tax referral.

An empty square in the tourist town of Visby this June. Photo: Fredrik Sandberg/TT

3. Stimulate spending

The crisis has changed people's behaviour deeply and dramatically. The uncertainty of the economic situation has curbed spending in retail even despite the lack of lockdown, for example, while people may be more cautious in their spending for years to come.

One way Sweden could help encourage spending, suggested by a reader running a small business in the Stockholm area, is through tax deductions, similar to the existing ROT & RUT deductions which subsidise work carried out by tradespeople such as mechanics, electricians and cleaners. Reducing the cost for the end consumer encourages them to go ahead with spending and gives a boost to these professions, and an expansion of these deductions could give small businesses a boost, the reader argued.

4. More support for sole traders

Self-employed people or sole proprietors (enskilda firmor in Swedish) are not eligible for some of the support measures offered, including state subsidised reduced working hours, or the state covering the cost of sick pay. 

“If I want unemployment benefits from my union, I have to close my business completely, which means losing all remaining income I do have. It's senseless,” said an American business owner who had lost 70 percent of her business during the pandemic.

5. Ensure support is applied equally to those affected

It's necessary that the government has limits on who is eligible for the support. But in some cases, business owners said more flexibility was warranted.

For example, rent reductions were made available for businesses in especially vulnerable industries like restaurants and tourism companies, but this had to be applied for by landlords.

Because many of the eligibility criteria were based on a percentage of income lost year-on-year, newly started companies which began operations after spring 2019, or had a low income in spring 2019 due to starting up, are not eligible for the adjustment support. Businesses with significant seasonal variation in income would also be affected.

Member comments

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  1. The system here is extremely bureaucratic, and as an English speaker who has limited knowledge in Swedish (I’m just lacking general language skills) it becomes traumatically difficult to seek government help. After four months I’ve given up waiting for any reply and found myself an angel investor from Greece instead.

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