Estonian Company Run from Sweden: Tax Rules

Many Swedish entrepreneurs form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from Sweden. Swedish law decides a company's residence differently from most countries in this series: a legal person is a Swedish taxpayer without limit because of its registration, not because of where it is managed. But Sweden's rules on foreign legal persons with low-taxed income can reach a Swedish owner directly — individuals included — and a fixed place of business in Sweden is taxed there. This guide sets out these rules with the official texts, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask a Swedish tax adviser (skatterådgivare) before you form or buy the company. We read the Income Tax Act (inkomstskattelagen, 1999:1229) as amended up to SFS 2026:1393 on the Swedish Parliament's official site riksdagen.se, and the treaty in its English text — the authentic text — in Riigi Teataja, on 21 October 2026; the English wording of the Swedish act below is our translation.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In Sweden: registration decides, a permanent establishment is taxed

Swedish legal persons. Legal persons are taxable without limit if, because of their registration or — where there is no registration — the seat of their board or a similar circumstance, they are Swedish legal persons (Income Tax Act, chapter 6, section 3). A taxpayer without limit is taxable on all its income from Sweden and abroad (chapter 6, section 4).
Foreign legal persons. Foreign legal persons are limited taxpayers (chapter 6, section 7). A limited taxpayer is taxable, among other things, on income from a permanent establishment (fast driftställe) or real property in Sweden (chapter 6, section 11, point 1).

An Estonian OÜ is registered in Estonia. Whether its activity in Sweden — an office, a place of management, staff — forms a permanent establishment there, and what income is attributed to it, is the question your Swedish tax adviser answers with your facts.

In Sweden: the rules on low-taxed foreign legal persons

For any Swedish owner, individuals included. A taxpayer counts as an owner (delägare) of a foreign legal person if, at the end of the owner's tax year, shares with together at least 25 percent of its capital or votes are held or controlled, directly or indirectly, by the owner alone or with persons in a community of interest with the owner (Income Tax Act, chapter 39 a, section 2).
When income is low-taxed. The net income of a foreign legal person is low-taxed if it was not taxed, or taxed more lightly than it would have been in Sweden if 55 percent of it had been the business profit of a Swedish limited company carrying on the same business there (chapter 39 a, section 5).
Estonia on the list — with exceptions. Even if it is low-taxed under that test, the income of a foreign legal person that belongs to and is taxable in an area listed in Annex 39 a is not treated as low-taxed (chapter 39 a, section 7). Estonia is listed — except for income from banking and financing, other financial activity, insurance, royalties and other income from intangible rights (Annex 39 a, Europe).
A real establishment in the EEA. Income of a foreign legal person in a state of the European Economic Area is also not treated as low-taxed if the person is a real establishment there from which a commercially justified business is carried on; its own premises, equipment and staff and their independent day-to-day decisions are weighed (chapter 39 a, section 7 a).

So for an Estonian company with ordinary business income the Swedish list applies, while financial and royalty income can still be tested — and then the EEA real-establishment rule decides. Your Swedish tax adviser answers that with your figures.

What the Estonia–Sweden tax treaty says

Resident in both countries. If a person other than an individual is resident in both states, the competent authorities endeavour to settle the question by mutual agreement and determine how the convention applies to it; without such an agreement the person is, in each state, deemed not to be a resident of the other state for the convention (convention signed in Stockholm on 5 April 1993, article 4(3); RT II 1993, 35, 110).
Permanent establishment. A permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried on; it includes especially a place of management, a branch and an office (article 5(1) and (2)). The profits attributable to it may be taxed in the state where it is (article 7(1)).
Directors' fees. Fees a Swedish resident receives as a member of the board of directors or a similar organ of an Estonian company may be taxed in Estonia (article 16) — see board member fee or dividend from abroad.
Dividends. Dividends paid by an Estonian company to a Swedish resident may be taxed in Sweden; if Estonia also taxes them at source, the treaty limits that tax to 5 percent of the gross amount for a company holding directly at least 25 percent of the capital, and 15 percent in all other cases (article 10(1) and (2)).

Because the Swedish act decides by registration, an Estonian OÜ is a foreign legal person and so a limited taxpayer in Sweden (chapter 6, section 7) — the treaty's double-residence rule is written for the case where both states count a company as resident. What matters in Sweden is the permanent establishment and the rules on low-taxed foreign legal persons. The multilateral convention on tax treaty measures (MLI) can change the rules of tax treaties; how it applies to your company is a question for your Swedish tax adviser — we do not give that ruling.

What to decide before you form or buy the company

Where the work is done. An office or other fixed place of business in Sweden can be a permanent establishment.
What the company earns. Ordinary business income and financial or royalty income are treated differently under the Swedish list.
What the company has in Estonia. Premises, equipment and staff of its own count for the EEA real-establishment rule.

What we do on the Estonian side

online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. Swedish tax returns and Swedish tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; Swedish tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in Sweden if I run it from Sweden?

Partly, it can be. Sweden decides a company's residence by registration: an Estonian OÜ is a foreign legal person and a limited taxpayer, taxable in Sweden on income from a permanent establishment there (Income Tax Act, chapter 6, sections 3, 7 and 11). In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). A Swedish owner holding 25 percent or more can be taxed on low-taxed income of a foreign legal person (chapter 39 a); Estonia is on the Swedish list except for financial and royalty income, and an EEA real establishment is excepted. Ask a Swedish tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from Sweden: what is taxed where