Startups and Bitcoins in Sweden

Export-orientated Swedish industries are not in a good shape because of the European protracted post-crisis economic stagnation. Sweden's GDP growth rate has not yet recovered to its 2007 levels. The unemployment rate has been decreasing only too slowly, moving from 10% in 2010 to about 7% in 2017. Those factors have negatively affected the growth perspectives of the local startup ecosystem. Additionally, the heavy tax burden, needed to maintain Sweden's generous welfare system, has encouraged many tech founders to move their companies outside of country's borders.

Sweden together with Norway and Denmark are striving to become cashless countries. Bitcoin and its peers are right up to Sweden authorities' alley. Not surprisingly then that "Sveriges Riksbank" (Sweden's central bank) is considering issuing a digital currency of its own. However, there are no laws in Sweden regulating digital currencies use. So far it has been substituted by government's departmental bylaws. For example, the Swedish Tax Agency has given a preliminary ruling on Value Added Tax (VAT) on Bitcoins, stating that trade in Bitcoins is not subject to Value Added Tax. At the same time, Finansinspektionen (Financial Supervisory Authority) is more likely to be treating Bitcoins as a currency. Meanwhile, trading crypto and organizing ICOs stay legal in Sweden.

Business Notes for Startups Founders:

political climate: friendly;
economic climate: marginally friendly;
regions to focus: locally;
industries to focus: mobile entertainments, FinTech;
major limitations: economic slowdown (GDP growth rate has dropped from 5-6% in 2015 to 2-3% in 2017), very high taxes;
stimulus: population of about 10 million inhabitants, high-income consumers (per-capita about $50000), fixed Internet penetration rate exceeds 90%;
opportunities: to build an e-business aimed at the growing population of young users of mobile Internet in sectors of FinTech and entertainments;
Cryptocurrencies and ICOs (outlook): legal (positive).
The author: Svyatoslav (Svet) Sedov

Angel investor and founder of The First International Incubator for Silicon Valley Companies (FirstInternational.In) in the Bay Area, CA, USA.

Twitter: https://twitter.com/SvjatoslavSedof