Swedish Credit Unions

If you own financial institution you can legally engage in activities not available with a regular corporation like to take deposits and make loans, issue bank guarantees, letters of credit and other financial instruments.

Sweden has a long history of innovative and alternative financial institutions. One of these is a unique type of credit union. Credit Unions can offer financial services to their members. Credit Union is registered in the form of an ekonomisk forening as it is known in Swedish which means economic association. The Swedish law allows for Economic Associations to take deposits, make loans etc to its own members without the need for bank license, but you can not have more than 1000 members. Financial services are normally restricted to the accepting of deposits and the making of loans to its members. In other words it would typically be expected to operate as a traditional savings and loan institution with the capitalization originating through member “contributions”. However, it is feasible that such an entity could also issue guarantees (c.d’s for example) as well as other financial instruments.

The Economic Association is exempted from the bank license requirement if these "financial services are offered to a group of entrepreneurs with a common financial interest". The common financial interest is established by making the entrepreneur a member of the association. The name of the entity cannot include the word "bank", but names including "Credit Union", “Savings” or "Savings & Loan", "Sparkassa" etc. are all allowed. Members can be of any nationality, but if requested the names of all members may be reportable to the finansinspektionen (Swedish finance and banking authority). In practice this would only be required if the activities of the credit union had been brought to their attention as potentially violating Swedish banking laws. However, even in that situation, only names with no other identifying information (such as passport id) are required. Directors (minimum 3) can also be of any nationality, although at least 50% of the board of directors must be technically residents of the European Union (although in practice an EU mailing address would suffice since there are no residency checks or tests made by the Swedish registration authority). We can arrange for maildrop addresses for this purpose if required.

A Swedish Credit Union can take deposits and make loans to its members, and is exempted from license requirement if it has a maximum of 1000 members at any time. The claim that these members have to be named upfront is 100% false. You can register the CU with 3 directors who also act as founding members, and start marketing your services and accept members after it has been registered. You do not have to name your members or even report to any government authority when you accept new members. Only the board of directors are registered with the company registrar. This is the most attractive deposit taking entity available today.

Main Advantages:

• This entity is registered in Sweden, a full European Union member and a highly respected jurisdiction.

• There is no annual license fee to pay, since the entity is exempted from license requirement.

• There are no qualification or paid up capital requirements since capital is derived from member contributions.
  
  Main Disadvantages:

• High tax levels. Sweden is obviously not a tax haven, and the association would have to pay 30% tax on any reported profit. One way around this is to use this entity together with a Panamanian licensed payment processing company or Uruguay financial company, in order to accumulate profits offshore rather than in Sweden. This company can also offer payment services like e-currency and credit/debit card services to the credit union members.
  
  Document Requirements:
  Directors must provide photocopies of government issued photo ID. Half or more of the directors must provide a European Union mailing address.
  
  A Credit Union, also known as Savings & Loan association or "sparkassa" in Swedish, is exempted from supervision and license requirements as long as it is properly formed and registered and comply with the membership limit of maximum 1000 members at all times. The exemption from license requirement is included in chapter 2, section 7 of the Swedish law (2004:297) regulating banking and financial activities.
  Swedish Banking Act
  
  How to order?
  Click here for details how to order Swedish Credit Union
  If you have more questions about credit unions please contact us.
  
  We offer a complete Credit Union formation package, including:

• CU certificates and bylaws in Swedish and English, both with Apostille

• Certificate of deposit taking and lending status with Apostille

• Assistance with account opening for the CU in Sweden and any other location

• Assistance with third party debit card issuing, including private label cards

• Assistance with acquiring custom software for Internet banking

• We also include all relevant supporting documentation, such as the Swedish banking act complete with certified English translation and apostille.

• Combination with a licensed Panama financial services company.

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The information included in this site is for information purposes only and must not be taken as legal, accounting or other professional advice. Any one seeking to establish any offshore legal entity or bank account should first seek professional legal, accounting or other professional advice.