Renting office space in Sweden as a foreign company
Office leases in Stockholm usually run for a fixed term, most often three years, and are governed by the Swedish Land Code (Jordabalken). A fixed-term lease longer than nine months requires at least nine months' notice before it ends, otherwise it is extended. The rent can only be index-linked if the lease runs for at least three years, and landlords usually ask for security, often three to six months' rent.
How long do office leases run?
In our experience, most office leases in Stockholm run for three years, and sometimes for five. In some cases it is possible to get shorter periods, such as twelve months at a time, or different exit clauses. A lease can also run for an indefinite period instead of a fixed term.
How much notice do you need to give?
Nine months is the starting point
For a lease that runs for an indefinite period, or for a fixed term longer than nine months, the notice period is nine months, unless a longer period has been agreed.
The lease is extended if nobody gives notice
If you have had the premises for more than nine months, notice must also be given on a fixed-term lease for it to end. Otherwise it is extended, for an indefinite period unless the lease says otherwise.
Notice in writing
Once the tenancy has lasted longer than three months, notice must as a rule be given in writing.
Read more about terminating a commercial lease.
Can the rent be index-linked?
The rent for commercial premises must be a fixed amount in the lease. There are exceptions: the rent can be linked to the tenant’s turnover, and if the lease runs for a fixed term of at least three years, the rent can be set on another basis, such as an index (for example the Swedish consumer price index, KPI).
What security do landlords ask for?
Landlords usually ask for security for the rent, for example a deposit or a bank guarantee. In our experience the amount varies a great deal between landlords and tenants, but it is often between three and six months’ rent.
Is there VAT on the rent?
Letting of premises is exempt from VAT. The landlord can, however, choose voluntary taxation when the premises are used permanently in a business with a right to deduct VAT. VAT is then added to the rent. Check with your accountant how this affects your business.
What is indirect security of tenure?
A tenant of commercial premises has no right to stay when the lease ends. Instead, once the tenancy has lasted longer than nine months, you may be entitled to compensation of at least one year’s rent if the landlord does not want to extend the lease, or if you do not accept the landlord’s new terms. There are exceptions, for example if the landlord’s terms are reasonable.
The right to compensation can be waived in a separately drawn up document. A waiver agreed before the tenancy has lasted nine months requires the approval of the Regional Rent Tribunal (Hyresnämnden), with certain exceptions. Check whether your lease comes with such a waiver before you sign.
Can the lease be in English?
In our experience, a lease in English usually works fine. Many terms in Swedish leases have no exact English equivalent, so make sure you understand what each clause means in practice.
How can Locality help?
We find premises that fit your needs, including upcoming vacancies, and compare the terms side by side: rent, length of lease, notice, indexation and security. We are a sounding board and a bridge between you and the landlord. If you need legal help, we work with the most experienced lawyers in the industry, who have expertise in your particular issue.
Frequently asked questions
- Do we need a Swedish company to rent an office?
- This guide does not cover company registration. Ask the landlord what they require of the tenant, and talk to your advisers about how to set up in Sweden.
- Can we get a shorter lease than three years?
- Sometimes. In our experience it is sometimes possible to get twelve months at a time, or different exit clauses. Keep in mind that the rent can only be index-linked if the lease runs for at least three years.
- When should we start looking?
- Preferably well before you need to move in, and if you already have premises, before you give notice on your current lease, so that the search can be done well ahead of your agreed notice period.