A Beginner’s Guide To Renting Commercial Real Estate In Sweden

Renting real estate may seem a simple task, but it can be quite complicated if you do not know the regulations of the country in which you choose to rent.  Nordic countries tend to have more complex regulations than the North American options; therefore, it is important that you are aware of these standards before signing any agreements.  This article will provide information on the different issues involved in renting commercial real estate in Sweden. Go over to google and search for “hyra lediga lokaler Göteborg” and find an office that suits your needs.

 

  1.  What Are The Structures Used For Real Estate Investment?

 

There are many different types of investment structures available when renting commercial real estate in Sweden, including the following:

 

  •    a limited liability company
  •    a limited partnership
  •    a partnership
  •    a non-resident company

 

It is most common for international investors to opt for the non-resident company investment structure with separate subsidiary accounts to hold the assets. This structure is not subject to any real estate restrictions because of the international company entering into a lease agreement. Due to Sweden not having any capitalization regulations, the possibility of highly leveraged private equity structures are being used; thereby reducing the taxable profits for the Swedish real estate market.  It should be noted, however, that government-based reports have suggested a reduction of this financial expense which may affect the tax situation for resident and non-resident investors.

 

  1.  What Are The Primary Sources Of Funding For Commercial Real Estate Rental In Sweden?

 

The most common source for renting commercial real estate in Sweden is via bank loans for real estate investors.  Larger resident investors are now considering the use of capital markets as well, not only because of the increased equity but also to issue preference shares.

 

  1.  What Are The Restrictions On Non-Resident Rental Of Commercial Real Estate In Sweden?

 

Currently, there are no restrictions regarding non-resident ownership or foreigner occupation of real estate in Sweden.  Regulations have been placed on agricultural properties, but this is not based on the investor nationality.

 

  1.  What Is Considered Real Estate In The Jurisdiction?

 

Commercial real estate includes both the land and all buildings place on the area.  According to Swedish land coding, the different types of accessories to the properties – fixtures or installations on the building – are considered part of the property.  The accessories or fixtures may have been installed by a contractor or the owner of the land. All registered commercial real estate has specified names and codes, typically consisting of the municipality name, the area name, and local identification numbers.

 

  1.  What Real Estate Due Diligence Must Be Performed Before Acquisition?

 

Before any rental agreement is signed, it is essential that due diligence is completed by the real estate agent.  The due diligence contract will typically include examination of the following documentation:

 

  •    public registration of the real estate
  •    tenancy relations
  •    planning issues
  •    any pending litigation regarding the real estate
  •    technical investigation
  •    tax issues and financial problems (if any)

 

The result of this real estate due diligence must be summarized in reports where key issues are identified and solutions recommended.