Library/Swedish Private Equity & Venture Capital Association (SVCA)

Reform Proposals for Capital Supply to Swedish Companies and Startups (Swedish Private Equity & Venture Capital Association (SVCA))

White paperSwedish Private Equity & Venture Capital Association (SVCA)January 20204 pages6 min readOriginal source

Key number

0.8%

Contribution of venture capital to Swedish GDP p.1

What changed

25%

Potential cost increase for investors without explicit VAT exemption p.4

Summary

According to Copenhagen Economics analysis, Swedish GDP is currently 0.8% higher than it would otherwise be due to venture capital.p.1
The venture capital market in Sweden could double in size if targeted growth-promoting reforms were implemented.p.1
Private equity funds typically perform major transformations and operational investments over an active ownership period of 5-7 years.p.2
Sweden's strong historical standing in private equity stems from 1990s structural reforms, including financial and currency market deregulations.p.2
SVCA highlights that national over-implementation (gold plating) of EU legislation damages Sweden's attractiveness to international investors.p.2
Without tax clarity, risk capital funds face potential triple taxation in Sweden when selling portfolio companies at a profit.p.4
Failing to explicitly exempt VC and PE advisory services from VAT risks increasing investor costs by 25%.p.4

Key insights

Venture capital provides both capital and critical industry expertise to Swedish technology and life science startups.p.1
Relative to its size, Sweden hosts one of the largest and most developed private equity markets in Europe.p.2
Buyout funds provide active ownership that can rescue and restructure struggling companies during economic downturns.p.2
Increasing international competition requires Sweden to offer a more predictable and competitive investment and tax framework.p.3
Key reform proposals from Sweden's 2014 Fund Commission remain unfulfilled, causing Sweden to risk falling behind other nations.p.3
International rules like AIFMD and Solvency II must be balanced to avoid restricting cross-border investments from institutional backers.p.3
Capital gains taxation should fundamentally occur in an investor's home country rather than in Sweden.p.4
Establishing a binding advance tax ruling mechanism at Skatteverket would eliminate cost uncertainty for complex investment deals.p.4

Topics and entities

Europe Nordics Private equity Private markets Regulation Startup ecosystems Startup funding Venture capital Copenhagen Economics Skatteverket Swedish Private Equity & Venture Capital Association

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