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Country Commercial Guides for FY 2000: Sweden Report prepared by U.S. Embassy Stockholm, released July, 1999 Note*

IV. MARKETING U.S. PRODUCTS AND SERVICES

- Distribution and Sales Channels

Sweden offers American exporters a wide range of methods for the distribution and sale of products. The distribution system has undergone refinement and is today characterized by a very high level of efficiency. The Swedish Federation of Trade (Svensk Handel) is the principal organization for private sector importers and traders in Sweden. Its membership includes more than 100 trade associations, whose 20,000 member firms are importers, wholesalers, distributors, agents, and general agents of all types of goods. Approximately two-thirds of all Swedish imports are purchased through wholesalers/importers. Consumer goods and industrial raw materials are usually imported through these channels.

The major distribution centers are Stockholm, Gothenburg and Malmo. Stockholm is the capital and business center of Sweden with a metropolitan area population of more than 1.5 million. The head offices of most Swedish industrial, and commercial associations, and most large corporations are located in Stockholm. Many multinationals also use Stockholm as the headquarters for Nordic and Baltic operations.

Gothenburg, Sweden's second largest city (population 740,000) is the nation's foremost port for international shipping. Located on the southwestern coast, Gothenburg is also the center of a fast growing industrial complex with a wide spectrum of manufactured products ranging from motor vehicles to petrochemicals.

Sweden's third largest city and distribution center, Malmo, is located at the southern tip of the country, a short distance from neighboring Denmark. It is an important port for Swedish shipping to continental Europe. In the year 2000, a bridge and tunnel link across the Oresund straight between Malmo and Copenhagen in Denmark will be completed. This will physically link Northern Europe with the Continent.

Helsingborg is also considered an active port in the southwest quadrant of Sweden. The northern two-thirds of Sweden are sparsely populated, but contain many large industrial sites for forest products, mining, and hydroelectric power. Major population centers are Sundsvall, Skelleftea, Lulea and Umea.

- Agents/Distributors - Finding a Partner

Swedish commercial agents are organized under the Federation of Commercial Agents of Sweden (Svenska Handelsagenters Forbund). In collaboration with organizations in the other Nordic countries, it has developed a new contract form for agency agreements. The contract was developed in accordance with the EU's "Directive on the Coordination of the Laws of the Member States Relating to Self Employed Commercial Agents" dated December 1986. Specific Swedish legislation sets out the rights and obligations of each party in an agency/principal contract or arrangement. The basic law covering such agreements is found in the Swedish Code (SFS) 1914:45 as amended.

Normally, an exclusive agent or distributor is appointed to cover the Swedish market. Swedish agents/distributors often represent several foreign firms. A visit to the market is the best way to appraise the relative merits of prospective agents/distributors. Close contact between the American principal and the Swedish agent/distributor is very important and should be developed early.

- Franchising

Franchising is one of the fastest growing methods of doing business in Sweden. Franchising is popular in the fast food and auto related services. Other opportunities exist in the home improvement sector, apparel retailing, and business services.

It is strongly recommended that U.S. companies, which are considering franchising in Sweden, conduct a qualified legal study to ensure full validity and enforcement of franchising agreements. The use of an American franchising agreement without adjustments for Swedish laws and practices could be detrimental to the franchiser's business.

There are several franchising consultants available in Sweden to help companies get started. Franchise networks which have been successful in the United States will not automatically succeed in Sweden, but a name that is well-known in the U.S. market does have a great advantage. However, to meet the needs of the Swedish market, U.S. franchisers should be prepared to modify their product mix or implement other changes in their marketing policy in order to boost competitiveness.

For detailed information on franchising contact should be made with the:
Swedish Franchise Association,
Address SE-103 29
Stockholm, Sweden.
Tel: 46-8-762 76 85. Fax: 46-8-762 76 86.

- Direct Marketing

American exporters of consumer goods may find it advantageous to sell directly to department stores, consumer cooperatives, chains, and other retail outlets. Some of the larger Swedish retailers have purchasing agents in the United States.

Direct marketing is expanding in Sweden. Although well-established mail-order firms strong in the areas of clothing, sporting goods and hardware already exist, there are good opportunities for specialties, such as up-market clothing and sporting goods. Telephone marketing is still relatively rare, but use of cable TV sales channels is growing.

- Joint Ventures/Licensing

In Sweden a joint venture is an agreement between two or more parties to carry out a project. It is not a legal entity, but only an agreement, and a legal vehicle must be formed to pursue the project. This legal vehicle may be either a limited liability company (AB), with the joint-venture participants as shareholders, or a partnership (HB), with the joint-venture participants as partners. Agreements for production in Sweden of U.S. products are common. Royalty and license fee payments may be freely transferred out of Sweden.

- Steps to Establishing an Office

There are no restrictions on foreign-owned firms establishing companies in Sweden. The legally recognized forms of business enterprise in Sweden are:
- Limited liability company (aktiebolag, abbreviated AB)
There are two types of limited companies: public and private
- Branch of a foreign company (filial)
- General or limited partnership (handelsbolag, kommanditbolag)
- Sole proprietorship (enskild firma)
- Economic association (ekonomisk forening)

Foreign investors in Sweden historically have favored the limited liability corporate form. A subsidiary of a foreign company established in Sweden in accordance with Swedish law is considered a Swedish company in all respects, and generally no legislative distinction is made between companies whose shares are wholly or principally owned by foreigners and those owned by Swedes.

It initially may be advantageous to conduct business through a branch office of the parent organization. Foreign investors seldom enter into use partnership or establishsole proprietorships.

The founding of a company is governed by the Swedish Companies Act. However, an investor need not bother with these proceedings as it is much easier to acquire a already registered shelf-company and adapt its articles of association to the needs and intents of the investor.

- Selling Factors/Techniques

Selling techniques are comparable to the practices in the U.S. General competitive factors such as price, quality, promptness of delivery and availability of service are those which determine the success of a supplier. Swedish firms do not change suppliers readily and many commercial relationships have been built up and maintained over decades.

- Advertising and Trade Promotion

Advertising plays a major role in Sweden's commercial life. All types of media are available. Daily newspapers and other publications are by far the most important media accounting for over half of all advertising expenditures. Direct mail is the second most important advertising medium, followed by radio and television commercials. Other forms, useful for certain types of products, are point-of-sale advertising, motion picture advertising, outdoor posters, and billboards. Until recently radio and television in Sweden were government-run, but now commercial broadcasting exists and is growing in importance.

In order to place advertisements in newspapers, magazines, and trade journals, an agency must be authorized to do so by the Swedish Publishers Association (Svenska Tidningsutgivareforeningen) Box 22500, 104 22 Stockholm. Tel: 46-8-692 46 00. Fax: 46-8-692 46 38.

Authorization requires that the agency have experience in advertising and that its books be open for audit by the association.

The major metropolitan papers in Stockholm, Gothenburg and Malmo have wide geographical circulation. The three large Stockholm dailies - Dagens Nyheter, Svenska Dagbladet, and Dagens Industry - enjoy nationwide circulation. While the large dailies in Gothenburg and Malmo (Goteborgs Posten, Sydsvenskan) provide important media for advertising exposure in western and southern Sweden.

Advertising sources are listed below:

Advertising Brokers

Carat Sverige AB Box 7054, S-103 86 Stockholm
Tel: 46-8-698 68 00; Fax: 46-8-791 84 64

Gester & Co AB
Box 1782, S-111 97 Stockholm
Tel: 46-8-679 33 00; Fax: 46-8-679 33 90

Mediekompetens i Stockholm AB
Saltmatargatan 5, S-113 59 Stockholm
Tel: 46-8-33 16 50; Fax: 46-8-33 53 75

Annons-Krantz AB
Skeppargatan 8, S-114 52 Stockholm
Tel: 46-8-663 85 10; Fax: 46-8-661 14 25

TV-Commercials

Airtime AB
Box 21127, S-100 31 Stockholm
Tel: 46-8-562 024 00; Fax: 46-8-562 024 10
Major Newspapers:

Svenska Dagbladet
S-105 17 Stockholm
Tel: 46-8-13 50 00; Fax: 46-8-13 51 40

Dagens Nyheter S-105 15 Stockholm
Tel: 46-8-738-10 00; Fax: 46-8-738 19 11 Sydsvenskan
Krusegatan 19, 205 05 Malmo
Tel: 46-40-28 12 00; Fax: 46-40-93 54 75

Goteborgs-Posten 405 02 Gothenburg
Tel: 46-31-62 40 00; Fax: 46-31-62 43 23

Business Magazines/Trade Journals

Affarsvarlden (Business weekly)
S-106 12 Stockholm
Tel: 46-8-796 65 00; Fax: 46-8-20 21 57

Bizniz (Business monthly)
S-113 90 Stockholm
Tel: 46-8-736 49 90; Fax: 46-8-736 58 06

Dagens Industri (Business daily)
S-113 90 Stockholm
Tel: 46-8-736 50 00; Fax: 46-8-31 19 06

Aktuell Sakerhet (Safety & Security)
Kaknas, S-115 27 Stockholm
Tel: 46-8-663 25 63; Fax: 46-8-660 01 40

Computer Sweden (Computer industry)
Sturegatan 11, S-106 78 Stockholm
Tel: 46-8-453 60 00; Fax: 46-8-453 60 05

Dagens Medicin (Medical)
Box 3396, S-103 68 Stockholm
Tel: 46-8-545 123 00; Fax: 46-8-411 01 0
Datateknik (Computer technics)
S-106 12 Stockholm
Tel: 46-8-796 66 80; Fax: 46-8-613 30 38

Elektronik i Norden (Electronics)
Box 1387, S-172 27 Sundbyberg
Tel: 46-8-29 97 40; Fax: 46-8-98 65 40

ForsakringsVarlden (Insurance)
Kammakargatan 38, S-103 54 Stockholm
Tel: 46-8-791 17 00; Fax: 46-8-10 22 71

Kemisk Tidskrift (Chemistry)
Engelbrektsgatan 5, S-100 41 Stockholm
Tel:46-8-611 60 30; Fax: 46-8-679 90 50

Miljo i Sverige (Environment)
Box 1167, S-221 05 Lund
Tel: 46-46-14 11 02; Fax: 46-46-13 49 32

Skydd & Sakerhet (Safety & Security)
S-115 87 Stockholm
Tel: 46-8-783 74 50; Fax: 46-8-663 96 52

Motormagasinet (Automotive)
Svenska Pro Motor AB
Box 83, S-260 35 Odakra
Tel: 46-42-16 83 00; Fax: 46-42-16 39 15

Habit (Fashion)
Box 27817, S-115 93 Stockholm
Tel: 46-8-670 41 00; Fax: 46-8-661 64 55

Tidningen RES (Travel)
Biblioteksgatan 3, S-111 46 Stockholm
Tel: 46-8-679 82 82; Fax: 46-8-679 57 10

Allt om mat (Food)
Sveavagen 53, S-105 44 Stockholm
Tel: 46-8-736 53 00; Fax: 46-8-21 40 84

Aperitif (Food)
Box 15, S-101 20 Stockholm
Tel: 46-8-545 120 10; Fax: 46-8-545 120 12

ICA-Kuriren (Food)
Box 6630, S-113 84 Stockholm
Tel: 46-8-728 23 00; Fax: 46-8-728 23 50

There are three major trade fair venues in Sweden.
Together they host approximately two million visitors each year. The largest is Stockholmsmassan (Stockholm International Fairs) with one million visitors, followed by the Svenska Massan (Swedish Exhibition and Congress Center) and the Sollentunamassan (Sollentuna Fairs). For further information, contact the addresses below.

StockholmsmŠssan
S-125 80 Stockholm
Tel: 46-8-749 41 00; Fax: 46-8-99 20 44

Svenska Massan
Box 5222
402 24 Gothenburg
Tel: 46-31-708 80 00; Fax: 46-31-16 03 30

Sollentunamassan
Box 174
191 23 Sollentuna
Tel: 46-8-92 59 00; Fax: 46-8-92 97 74

- Pricing

Prices are set individually by companies. According to the new Swedish Competition Act (which is in line with EU rules), companies are not allowed to practice price fixing. All goods and services are subject to VAT, which ranges from 12 percent to 25 percent.

Products in Sweden are priced using the following formula: CIF price + import duty + excise tax + profit + VAT

- Sales Service/Customer Support

Sales services and customer support are comparable to the practices in the United States. American firms wishing to enter the Swedish market will have to provide outstanding service and support to successfully replace a Swedish supplier.

- Selling to the Government

In Sweden the EC Council directive on public works contracts has been implemented by means of the Public Procurement Act. Bodies governed by public law must procure goods and services in a businesslike, competitive and non-discriminatory way.

The act applies to bodies that award public works contracts: central government agencies, municipalities, county councils and Church of Sweden units. Also covered by the Act are central and local government-owned companies, associations, special districts and foundations established to perform tasks for the benefit of the public.

The act applies to large as well as to small procurement. In the case of procurement above certain threshold values, the EC directive's rules on advertising, grace periods, and so forth must be applied. The threshold values are denominated in European Currency Units, with goods and services valued at ECU 200,000 and construction contracts valued at ECU 5,000,000. To make it possible for all conceivable suppliers to become aware of forthcoming and concluded procurement, notification of such procurement shall be published in the Supplement to the Official Journal.

Procurement below the threshold values must follow the same basic principles as procurement above the threshold values, but the tender procedure is not regulated in as much detail.

The Public Procurement Board is responsible for contacts with public agencies, organizations and the public. One of the tasks is to provide information and general advice on how the Public Procurement Act and the WTO agreements shall be interpreted.

Under the WTO "Agreement on Government Procurement," signatories to the agreement, including Sweden, will not discriminate against or among the products, certain services and construction of other signatories in purchases covered by the agreement. The agreement's coverage extends to purchases of goods by specified government entities (e.g. ministries and Government authorities) listed in the agreement on contracts valued at 130,000 Special Drawing Rights (about $190,000). The list includes all the central government entities of the major developed countries.

The agreement does not apply to purchases of national security items, purchases by local governments, or purchases by any entity that has not been specified as being covered. To eliminate discrimination against foreign products at all stages of the procurement process, the agreement includes detailed requirements as to how government procurement is to be conducted. Many Swedish government procurement announcements, covered by the code are published in the U.S. Department of Commerce's publication, Commerce Business Daily. Code-covered tenders are also published in the Journal of Commerce, a private sector newspaper.

- Local Government Procurement

Local government procurement has become increasingly significant and in some cases offers American companies excellent trading opportunities. Local governments are not subject to the national procurement procedures but are free to adopt their own procurement rules. The Swedish Association of Local Authorities and the Federation of Swedish County Councils have, however, adopted a recommendation aiming at rules for local government procurement, which follow closely the rules of the national procurement regulations. As is also the case with procurement on the national government level, purely business considerations determine the methods and sources of procurement by local governments and similar bodies, and no distinction is made between domestic and foreign suppliers or contractors. The normal procedure in inviting bids is through circular letters addressed to firms known to be reputable and reliable. Such firms could be Swedish or foreign, the latter often being the local subsidiary or sales representative of a foreign company. Local governments and their procurement procedures and practices are reputed to be liberal and completely nondiscriminatory in character.

- Health Care Equipment Procurement

The county councils arrange centralized equipment procurement for the medical care sector. The 23 councils are autonomous units, and the degree of centralization varies.

The normal procurement procedure is for the county medical care authority, together with end-users of the equipment, to survey the equipment needs for hospitals and forward them to the purchasing departments. In the case of replacements, the procurement request originates in the hospital department involved, with the decision to purchase made by the county authority. There is a high degree of uniformity in the Swedish hospital organization.

- Protecting Your Product from IPR Infringement

The Swedish legal system provides adequate protection to all property rights, including intellectual property. As a 1993 signatory to the EEA agreement, Sweden has undertaken to obtain adherence with a series of multilateral conventions on industrial, intellectual, and commercial property.

Sweden is a member of the "Paris Union" International Convention for the Protection of Intellectual Property (patents, trademarks, commercial names, and industrial design) to which the United States and about 80 other countries adhere. American business executives and inventors are thus entitled to receive national treatment in Sweden (treatment equal to that accorded Swedish citizens), under laws regarding the protection of patents and trademarks.

American nationals are also entitled to certain other benefits, such as the protection of patents against arbitrary forfeiture for non-working and a one-year "right of priority" for filing a patent application. The "right of priority" period for trademarks is 6 months. Applications or inquiries pertaining to intellectual property should be addressed to:

Director General
Patents and Registration Office
(Patent & Registreringsverket)
Box 5055, S-102 42 Stockholm
Tel: 46-8-782 2500; Fax: 46-8-666 0286

- Patents

Patents are adequately protected under the terms of the EEA agreement, which states that the signatory countries comply in their law with the substantive provisions of the European Patent Convention of 1973, which Sweden ratified in 1980. Protection in all areas of technology may be obtained for 20 years.

Patent applications are examined for inventiveness and, if accepted, published for opposition for 3 months. If no opposition is filed or it is successfully overcome, the application is allowed and a patent is granted.

- Copyrights

Law No. 729 of 1960 as amended governs protection of copyrights in Sweden. The term of copyright protection of a work is for the author's life plus 50 years after the author's death. It includes all literary, dramatic, musical, and artistic works. Copyright includes the sole right to produce and reproduce the work or a translation of it; to publish such a work or translation; to perform it in public; and to authorize others to do so.

Sweden is a signatory to various multilateral conventions for the protection of copyrights. It is a member of the Universal Copyright Convention to which the United States and about 60 other countries adhere. Works of American authors copyrighted in the United States are entitled to automatic protection in Sweden. Authors need only show on such works their name; year of publication and the symbol "C" in a circle to obtain copyright protection.

Sweden is also a member of the "Berne Union" Copyright Convention. Although the United States is not a member of this convention, U.S. authors may obtain protection in Berne Union countries by publishing work in a Berne Union country at the same time it is first published in the United States.

Swedish copyright law also protects computer programs and databases. However, there have been complaints from American software companies that the law is ineffective since compliance investigations cannot be instituteded without prior notification.

- Trademarks

Sweden protects trademarks under the Trademark Act, effective January 1, 1961 and has undertaken to adhere to the 1989 Madrid protocol. Sweden has adopted the Nice International Classification System for registration purposes. Trademark registrations are valid for 10 years from the date of registration and are renewable for like periods.

The first applicant for a trademark is entitled to receive a registration and exclusive ownership. However, if another party can prove he was the first user, he may have the trademark canceled and re-registered to himself. After 5 years, a registration becomes incontestable on grounds of prior use.

Applications are examined and, if acceptable, published for opposition for 2 months. Swedish or foreign official emblems or words, or markings contrary to public order or good morals cannot be registered as trademarks. A trademark registration may be canceled if not used within 5 years, unless the registrant shows an acceptable reason for non-use. The EEA agreement's Article 4 of Protocol 28 covers the subject of semiconductor chip layout design and protection.

- Need for a Local Attorney

This publication gives only general information on business activities in Sweden. Detailed advice in legal, accountancy, fiscal and other matters should be sought from professional advisors. A list of Swedish attorneys can be obtained from the Consular Section of the American Embassy in Stockholm, 46-8-783-5300.

- Performing Due Diligence/Checking Bona Fides

Credit reports on Swedish companies can be obtained by contacting any of the sources below:

Dun & Bradstreet Sverige AB
Box 1506
SE-171 29 Solna, Sweden
Tel: 46-8-705 10 00
Fax: 46-8-27 53 35

AB Svensk Uppplysningstjanst
Box 244
SE-211 25 Malmo, Sweden
Tel: 46-40-729 00
Fax: 46-40-23 29 45

UC AB
SE-114 96 Stockholm, Sweden
Tel: 46-8-670 90 00
Fax: 46-8-670 9 20
(UC AB, the Swedish Business and Credit Information Agency, is jointly owned by all Swedish commercial banks).