Sweden Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

The EU is a key market for Sweden, but its dependence on trade with EU countries is not as high as in the case of other countries. In 2021, 53.7% of all Swedish exports went to EU countries and 66.6% of all imports came from EU countries. In 2021, Sweden exported SEK 875.0 billion worth of goods to EU countries and imported SEK 1,068.4 billion worth of goods. Germany, Denmark, Finland, the Netherlands and France are Sweden’s largest trading partners in the EU.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 90,565.20 93,986.80 93,057.10 88,892.60 101,531.21
Imports into the EU (million EUR) 71,596.2 75,667.1 75,251.4 70,654.20 83,368.21
Balance with the EU (million EUR) -18,969.1 -18,319.6 -17,805.7 -17,875.3 -18,379.01

Source: European Commission

Trade relations with the Czech Republic

For the year 2021, the turnover of Czech-Swedish mutual trade reached a value of CZK 118.8 billion. Sweden continues to be our 14th most important export partner. This represented CZK 8billion in 2021. The structure of exports to Sweden remains unchanged compared to previous periods. The main Czech export item to Sweden is traditionally the group of goods “machinery and transport equipment”. This accounted for more than half of total exports (approx. 65%). Of the specific items, the most important were road vehicles (approx. 25%), office machines and equipment (11%) or industrial machines and equipment (approx. 9%). The structure of imports did not show significant changes either. The total volume of imports for the year 2021 from Sweden to the Czech Republic reached almost 36 billion CZK. The main import items were iron and steel (14%), road vehicles (12.5%) and industrial machinery (11.5%).

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 31 76.3 75 72.6 83.2
Imports to the Czech Republic (billion CZK) 67 33.1 33.1 29.8 35.6
Balance with the Czech Republic (billion CZK) 36 -43.2 -41.9 -42.8 -47.7

Source: businesscarriers.com

Trade relations with countries outside the EU

Sweden achieves a stable positive balance with countries outside the EU, which contributes to the overall positive result of the trade balance. In 2021, a slight decrease in the trade balance surplus with countries outside the EU was recorded from the original EUR 2billion to EUR 20.7 billion (a decrease of approx. 10%). The most important trading partners outside the EU for Sweden are mainly Norway, China, the United Kingdom and the USA. Oil and oil products remain essential items of trade. Furthermore, Sweden trades with these countries in cars, vehicle parts, gas turbines and packaged medicines. In 2021, trade activity with China, the United Arab Emirates, Norway and Vietnam increased significantly.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 40,517.6 51,028.3 42,068.3 38,594.7 50,951.3
Imports to countries outside the EU (million EUR) 58,385.8 64,884.70 68,169.80 65,090.90 71,632.0
Balance with non-EU countries (million EUR) 17,868.3 14,379.1 19 173.4 22,926.2 20,680.7

Source: EIU, Eurostat

Foreign direct investment

Sweden is a very open economy and has traditionally been a significant recipient of foreign direct investment. It also represents an important investor abroad. The interest of foreign investors in Sweden is focused on progressive hi-tech sectors such as ICT, life-science, clean technologies and others, as well as on classic sectors such as energy and engineering. About 45% of investments are directed to research and development. Investment in the field of financial services is developing very dynamically. The conditions for the entry of foreign capital are very favorable and Sweden does not pose any obstacles. The business environment in Sweden, including the inflow of investments, is one of the most transparent in the world.

Territorially, the most foreign direct investments (FDI) go to Sweden from the Netherlands (SEK 481 billion), Great Britain (SEK 446 billion), Luxembourg (SEK 426 billion), Germany (SEK 283 billion), Norway (SEK 270 billion) SEK), Finland (SEK 252 billion), Denmark (SEK 233 billion) and the USA (SEK 213 billion). In the opposite direction, most Swedish investments go to the US (SEK 582 billion), the Netherlands (SEK 391 billion), Norway (SEK 281 billion), Great Britain (SEK 278 billion), Finland (SEK 255 billion), Denmark (SEK 245 billion), Germany (SEK 174 billion) and Spain (SEK 148 billion).

Czech investments in Sweden are at a relatively low level. The company LINET is one of the few Czech companies that invested in Sweden (in 2007) on a larger scale and is currently, through its subsidiary LINET Sweden AB, the leader in the Swedish or the Scandinavian hospital bed market. Most of the Czech investments directed to Sweden are of a smaller nature, where a Czech company buys a local distributor (Servis Climax as – Jaretegs Interiör AB) or a manufacturer (Česká zbrojovka as – Spuhr i Dalby AB). On the other hand, a number of Czech industrial companies have significant activities in Sweden in the form of project deliveries. The Czech construction company SUBTERRA implements several important projects in Sweden, including a prestigious contract (for approximately five billion CZK) for the construction of the Stockholm metro. Other Czech companies, which operate in the form of project deliveries in Sweden are, for example, the construction company FENESTRA WIEDEN or the industrial and energy companies HUTNÍ MONTÁŽE, ČKD Blansko and many others. Among the most important activities related to the Czech Republic are the import and distribution of ŠKODA Sverige passenger cars from the Volkswagen Group Sverige AB, while ŠKODA is currently the eighth best-selling car on the Swedish market.

FTAs and treaties

Treaties with the EU

Sweden has been a member of the European Union since 1995.

Contracts with the Czech Republic

  • Treaty between the Kingdom of Belgium,… the Kingdom of Sweden,… and the Czech Republic,… on the accession of the Czech Republic,… to the European Union. The contract was signed on 16/04/2003 in Athens, entered into force on 1/5/2005.
  • Additional protocol to the European Agreement on trade in textile products between the EEC and the Czech Republic, initialed on 7 December 1995, supplemented by an agreement negotiated in the form of an exchange of letters between the EC and the Czech Republic in connection with the entry of Sweden, Finland and Austria into the EU.
  • Protocol on adjustments to the trade aspects of the European Agreement between the Czech Republic, on the one hand, and the European Communities and their member states, on the other, with regard to the entry of Austria, the Republic of Finland and the Kingdom of Sweden into the European Union and the results of negotiations on agriculture within the framework of the Uruguay Round, including the improvement of the existing preferential regime (Brussels, 27 October 1998).
  • Agreement between the Czechoslovak Socialist Republic and the Kingdom of Sweden on the prevention of double taxation in the field of income and property taxes dated 6 February 1979 (9/1981Coll.).
  • Agreement between the Czech and Slovak Federal Republic and the Kingdom of Sweden on the support and mutual protection of investments, which entered into force on 11/13/1990 for a period of 20 years. Note The Czech Republic proposed the termination of this Agreement due to the need for harmonization with EU legislation.
  • Agreement between the Government of the Czech Republic and the Government of the Kingdom of Sweden on mutual cooperation in customs matters signed on 24 June 1995, which entered into force on 10 September 1996 (249/1996 Coll.).

Developmental cooperation

Sweden is a leading provider of development and humanitarian aid, contributing 1% of GDP, which is the highest per capita in the world. It operates in 35 countries around the world. The agenda is managed by the government agency SIDA (Swedish International Development Cooperation Agency). Cooperation with companies takes place most often in the areas of economic sustainability or support of scientific development.

Prospective fields of study (MOP)

Transport industry and infrastructure

The Swedish transport sector is undergoing a rapid transformation. Sweden is investing heavily in the development of smart solutions for cities, intelligent transport systems and autonomous mobility. More and more resources are being channeled into the development and implementation of electric technologies, autonomous cars, batteries, charging infrastructure and fuel cells. At the forefront of developments in electrification and mobility is the Smart Transport ecosystem, which connects global players such as Volvo Cars and Volvo Group, Scania, Bombardier and Ericsson with leading researchers and technology innovators, including companies such as Einride, Nevs and Polestar. Sweden has a strong tradition of manufacturing vehicles and components with a world-renowned reputation for innovation and safety. Swedish automotive clusters are very dynamic: new technologies and concepts are often developed in a cooperative environment,

Very good opportunities exist in building the infrastructure for the electric car. Sweden has one of the highest shares of plug-in cars among EU countries. In 2021, plug-in cars, i.e. plug-in hybrids and electric cars, represented 45% of new car registrations, a total of 135,302 plug-in cars, and in 2022, 60% percent of passenger cars sold in Sweden should be plug-in cars.

Sweden’s national transport plan includes investments of 70 billion euros for the period 2018-2029 and offers options for the delivery of major infrastructure projects. Most of the funds are spent on the construction of railway and road infrastructure and other large projects. Czech companies can participate in the construction of highway tunnels, the expansion of Stockholm metro stations, the planned construction of a high-speed railway connecting the three largest Swedish cities Stockholm, Gothenburg and Malmö, in the modernization of bridges in the Baltic Sea or the improvement of the infrastructure of regional airports.

Energy industry

Sweden occupies an international position as a leader in environmental policy. Sweden’s goal is to become the first carbon-neutral country in the world by 2045. In the energy sector, the goal is to achieve 100% electricity production from renewable sources by 2040. The current 55% share of electricity production from renewable sources is the highest of all countries in the EU and will continue to increase in the coming years.

In the field of traditional renewable sources, the wind energy sector is developing most dynamically in Sweden, which is supported by new technologies and reductions in production costs. The solar energy market is limited in Sweden, but it is starting to develop gradually mainly due to government funding and investment support. At the same time, opportunities for cooperation exist in the area of ​​modernizing transmission networks and increasing the energy efficiency of buildings, for which the Swedish government has allocated separate government resources.

There are very good opportunities for Czech companies in the field of modern renewable resources. The Swedish company’s rapid electrification is increasing demand for supplies and services for building charging infrastructure and sustainably produced batteries. As part of the hydrogen strategy, a number of large industrial projects using renewable, clean hydrogen are being prepared in Sweden. Examples are the activities of Scania and Volvo in the field of hydrogen-powered truck development, or the production of steel using fossil-free hydrogen, which is being prepared by the Swedish companies SSAB and Ovako. The efficient and sustainable use of biomass energy is another important part of Sweden’s fossil fuel substitution policy and presents opportunities for possible cooperation.

Information and communication technologies

The share of the ICT industry as a share of GDP is one of the highest in the world: the digital sector accounts for approximately 20% of Sweden’s GDP. Sweden is the absolute world leader in the use of digital technologies to support sustainable growth, productivity and social development. Swedish SMEs are at the forefront of using e-commerce and internet sales.

The strengths of the Swedish digital technology ecosystem are: 1) more than 30 test facilities focusing on artificial intelligence (AI), Internet of Things (IoT), 5G/6G networks, gamification, IT security, connectivity, cloud computing, mobile technology, advanced robotics and distance learning; 2) resilient, low-carbon digital infrastructure with the highest level of network and technology readiness in the world; 3) a sector employing 6.1% of the population (double the EU average) with a renowned startup scene; 4) world-class skills in automation, artificial intelligence, machine learning, e-commerce, AR/VR, wearables, cybersecurity, cloud delivery and data centers and 5) four times more connected devices per person than anywhere else in the world.

Opportunities exist for Czech hardware and software providers, digital innovators, startup companies or scientific research cooperation in the areas of production, e-mobility, retail, banking and financial services and other areas.

Construction industry

The construction industry is a priority of the Swedish government and belongs to the most promising sectors for possible cooperation. This applies to both residential and industrial buildings as well as infrastructure projects. The Swedish construction market has a turnover of approximately 68 billion euros. Of this, approx. 52 billion of annual investment goes into housing construction and approx. 16 billion euros into other construction works including roads, railways, power plants, heating plants, waste water treatment plants, engineering activities related to post and telecommunications, etc.

One of Sweden’s long-term problems is the lack of residential housing. More than 80% of Swedish municipalities face a housing shortage. These investments consist of the construction of new apartments and the renovation of existing ones and related investments in utility networks. The Swedish government plans to invest over 150 billion euros in new residential construction by 2025, while approximately 700,000 new apartments and offices should be built by 2030.

Swedish construction companies are not able to cover such a huge construction demand on their own. Opportunities for Czech companies exist in the field of supply of large transport structures, bridges, tunnels, projects for industry and civil structures, both for public and private investors. Chances also exist in the field of innovation and development of new materials with the aim of applying sustainable and ecological construction technologies. Czech companies can apply in the field of subcontracting construction works and services with a higher added value.

Engineering industry

The engineering industry is the backbone of the Swedish economy. The export of engineering products represents approximately 33% of total Swedish exports. The Swedish engineering industry includes both major renowned global corporations (ABB, Assa Abloy, Ericsson, Husqarna, Scania, Volvo, etc.) and a large number of other companies of all sizes that develop technologically advanced products and services. The Swedish engineering industry has traditionally taken a leading role in the use of new technologies and in the implementation of new business models. A third of research spending in Sweden comes from engineering firms. As a global leader in innovation and digitization, Sweden is an ideal place to create highly competitive intelligent industrial solutions.

Czech companies can apply both for the supply of standard engineering components and for cooperation in the field of selected high-tech technologies. Cooperation with Swedish companies is usually the gateway to the markets of other Northern European countries. Due to their global scope, Swedish engineering companies are also sought-after partners for cooperation anywhere in the world. The coronavirus pandemic and the associated economic recession have shown the limits of global supply chains, as a result of which stable sub-supplies for the Swedish engineering industry have been disrupted. Czech suppliers can be even more effective in the supply of parts for the automotive industry, data processing machines, parts for office machines, compressors and other components for practically all industries. Since Swedish engineering companies are world leaders in the field of innovation, Czech companies are also increasingly trying to assert themselves on the Swedish market with selected top technologies from the fields of advanced engineering and advanced production. Examples are possible deliveries using 3D printing, metal injection or powder metallurgy technologies.

Entertainment and leisure

In the entertainment and leisure sector, the gaming industry dominates the opportunities. Today, Swedish video games reach more than a billion players worldwide, and Sweden is one of the main centers of the European gaming industry. The industry is a pioneer of new technologies and has proven to advance innovation potential in areas such as augmented reality, artificial intelligence and defense. The development of the gaming industry in Sweden is supported by a functioning system of government support and a very efficient startup ecosystem. There are currently more than 660 gaming companies in Sweden, which generate an annual turnover of billion euros. Each of the seven largest game companies (Embracer Group, King, Mojang, Stillfront Group, Paradox, G5 Entertainment and EA DICE) achieves an annual turnover of more than 100 million euros.

Czech companies are offered a number of opportunities for direct cooperation or to acquire unique know-how. One possibility is cooperation in the form of investments and acquisitions, as a large number of investors from literally all over the world are concentrated on the Swedish market. Another option is the workforce area. These are not only positions related to development, but also to the fields of creative arts, business and marketing. A number of specialized fairs and conferences also encourage cooperation. Events such as the “Nordic Game” or the “Sweden Game Conference” directly target the creation of business opportunities through matchmaking platforms. Last but not least, opportunities are also emerging in sectors linked to the gaming industry, i.e. cloud services, streaming platforms or very popular e-sports, in which Sweden is often at the forefront of world events.

Agricultural and food industry

Sweden has long been among the five most important markets for the export of Czech beer. Traditional classic Czech beers are especially in demand. Such beers are practically not produced in Sweden today, and the demand for them has been growing in recent years. Over the past eight years, the export of Czech beer to Sweden has almost doubled. Traditional classic Czech beers, i.e. light lagers or draft beers, or even semi-dark and dark beers of the classic type, are most in demand.

There are currently around 450 breweries in Sweden. Five larger enterprises mainly brew light European-style lagers. Most Swedish breweries are focused on American IPA and New England IPA beers, modeled after current American craft breweries. A number of beer brands from well-known foreign breweries are also imported to Sweden. What is really missing in Sweden are traditional Czech-type beers. Basically, no brewery in Sweden today brews a typically Czech beer, i.e. a drink with good fullness and a delicate aromatic hop character.

The retail sale of alcohol and beer (with a volume above 3.5% alcohol) in Sweden is exclusively run by the government-owned company Systembolaget, which offers several types of Czech beers. Any other Czech supplier applying for inclusion on Systembolaget’s sales list must expect a relatively complex process of negotiations, which usually take the form of tenders. Potential partners for the import of beer to Sweden can also be found among licensed alcohol importers, with about twenty of the more important ones in Sweden.

Sweden Trade