One minute guide to Swedish Law – Part 1
Swedish law – part 1
Swedish legal system
The Swedish legal system is a civil law system belonging to the Nordic legal tradition, characterized by a combination of statute and case law. While legislation enacted by the Swedish Parliament is the primary source of law, case law and preparatory works, also play significant roles. Sweden’s legal framework reflects its EU membership since 1995, incorporating EU law and aligning with international treaties, including the United Nations Convention on Contracts for the International Sale of Goods (CISG).
Contracts
Swedish contract law is based on the principle of freedom of contract. While certain rights and obligations in contractual relationships are stipulated by law, they generally apply only in the absence of an agreement to the contrary. Exceptions include, for example, consumer protection regulations. In cases where the meaning of a contract is unclear, the interpretation should primarily reflect the mutual intention of the parties at the time the contract was concluded. Contracts are generally not subject to specific formal requirements for validity; however, exceptions exist, such as contracts for real estate acquisitions.
Employment
Swedish labor law is based on a combination of legislation and collective bargaining agreements, with trade unions holding an influential position. The Employment Protection Act (LAS) is a key piece of legislation regulating employment relationships, including rules on termination, notice periods, and the “last in, first out” principle for redundancies.
Collective barganing agreements often supplement statutory provisions, setting industry-specific standards and creating a comprehensive framework for employment relationships. Managers and senior executives may be excluded from certain statutory protections and collective barganing agareements, with their terms governed by individual agreements.
Individuals who are not citizens of EU/EEA countries or Switzerland typically require a work permit to work in Sweden. As a general rule, the work permit must be approved before entering the country.
Marketing practice
In Sweden, the marketing of products is subject to regulations and restrictions to ensure compliance with good marketing practices. Marketing must be clearly distinguishable from other types of communication and must not be unfair, misleading, aggressive, or otherwise improper. Specific requirements also exist regarding the information that must be included to ensure marketing messages are not considered misleading. There are additional restrictions on the marketing and sale of certain products, such as alcohol, tobacco, gambling, pharmaceuticals, and financial services.
Regulatory authorities oversee compliance, and breaches of legal requirements may result in sanctions. Sweden also has a self-regulatory organization, the Swedish Advertising Ombudsman, which handles complaints about commercial advertising and provides guidance on good marketing practices based on the Consolidated ICC Code.
Real estate
In Sweden, real estate is governed by key statutes such as the Land Code (JB), the Real Property Formation Act (FBL), and the Planning and Building Act (PBL), which regulate aspects of ownership, development, and use of property. There are no general restrictions on foreign ownership of real estate, although acquisitions of certain types of land may require permission.
To transfer ownership of real estate in Sweden, a written agreement is a legal prerequisite for validity. The agreement must be signed by both the buyer and the seller and clearly specify the property, purchase price, and the transfer of ownership. Registration of the transfer with the Land Registration Authority (Lantmäteriet) must be completed within three months, and ownership records are publicly accessible, with few exceptions.
Property use may be restricted due to zoning regulations or environmental laws. Construction on and changes in the use of a property generally require approval from the local building committee. Additionally, Sweden’s constitutional allemansrätten grants public access to most private and public lands for activities like walking and berry-picking, though it does not apply to private gardens and may be limited in protected areas.
Public procurement
Public procurement in Sweden represents a significant portion of the economy, corresponding to nearly one-fifth of the country’s GDP. The regulatory framework for public procurement in Sweden is defined by several key laws: the Public Procurement Act (LOU), which governs the majority of public procurements, the Act on Procurement in the Utilities Sector (LUF), the Act on Procurement of Concessions (LUK), and the Defence and Security Procurement Act (LUFS). These laws are aligned with EU directives, ensuring adherence to the fundamental principles of the EU internal market, such as transparency, non-discrimination, and equal treatment. In line with these principles, contracting authorities are prohibited from favoring domestic suppliers or previous contractors. The selection of a supplier must be based on commercial considerations, prioritizing the supplier that offers the best product or service under the most favorable terms. Furthermore, all suppliers must be given an equal opportunity to compete for contracts on fair and impartial terms. The outcome of a public procurement process can be challenged and reviewed by an administrative court.
Corporate reorganization and insolvency
In Sweden, if a company becomes insolvent, a district court may declare the company bankrupt upon application by either the debtor or a creditor. Following a bankruptcy declaration, the court appoints a trustee to manage the bankruptcy estate. The trustee’s assignment is to utilise the assets of the bankruptcy estate in favour of the creditors jointly. The bankruptcy estate includes all assets owned by the debtor at the time of bankruptcy, as well as assets recovered through clawback actions.
In certain cases, a financially distressed company may avoid bankruptcy through a court-supervised corporate reconstruction. This process, governed by Swedish law, typically involves renegotiating outstanding debts and restructuring the business. A prerequisite for initiating reconstruction is the existence of a well-founded belief that the process can restore the company’s viability.
Similar to bankruptcy proceedings, a trustee appointed by the court oversees the reconstruction process. For companies that are not insolvent but wish to dissolve their business they can carry out a liquidation. The liquidation process is managed by a liquidator which is normally appointed by the Swedish Companies Registration Office and in some cases the court.
Financial family law
Inheritance in Sweden is governed by statutory rules but can be modified through a will. However, children of the deceased are entitled to a statutory share, amounting to half of what they would inherit under default rules, regardless of the will’s provisions. Strict formal requirements apply to the drafting and signing of wills. Notably, Sweden abolished inheritance tax in 2004.
In marriage, a spouse’s property typically becomes marital property, which is distributed equally between the spouses upon divorce, unless otherwise agreed through a prenuptial or similar arrangement. For unmarried cohabitant partners, only jointly acquired housing and household goods can be treated as shared property under the law, equivalent to marital property.
In the event of disputes concerning the distribution of assets in either situation, a court may appoint an estate administrator to oversee and decide the allocation. Such decisions are subject to appeal.
The purpose of the “one-minute guide” is to give you a brief introduction to Swedish law only, based on the legislation as of 2025. It cannot substitute legal advice.
