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How much does it cost to sign Byggavtalet?

In the previous article I wrote about how long it takes to sign the collective bargaining agreement called Byggavtalet. This time I am focusing on the monetary cost of signing it. The total cost varies and is dependent on several factors, such as what legal entity is used, where the entrepreneur resides, the size of the company, etc. The aim of this article is to show the span of the possible investment you need to make and what the different costs consist of.

To narrow down the cost span a bit, I am going to use in my examples an Estonian company with 20 workers that wants to sign Byggavtalet. It is important to consider the location of the company, the firm representative and the area in Sweden where your projects are located. A lot of the costs associated with this investment are related to travel costs. Another thing to keep in mind is that the number of workers have a direct impact on the price of many staff related mandatory services.

A word of caution. Signing a collective bargaining agreement is not a guaranteed endeavour. You might find that you are rejected for any number of reasons, be it for lack of a “proper” office, or your request simply gets ignored. In this process, you have a very limited bargaining position.

Company registrations: 0 – 30 000 SEK

Foreign construction companies usually sign Byggavtalet either with their domestic company or they acquire a Swedish entity. Establishing a branch is also possible, but I don’t recommend it, as it brings with it more obligations than benefits.

If you decide to sign Byggavtalet with your domestic company, you need to register the company for F-tax, and employer status. VAT is optional. Most service providers ask around 5 000 SEK for this service. You can of course apply for these registrations yourself, but it is likely that you will make a mistake and prolong the handling process, if you have no experience in this task.

A second option is to acquire a Swedish AB (Aktiebolag or Limited Company). Theoretically, you could register a new AB but in practice it is nigh impossible for a foreign entrepreneur to do this. This is because the process requires you to open a bank account with a Swedish bank, to deposit the share capital. After the share capital is deposited, the bank issues a confirmation and sends it to Bolagsverket (Sweden’s Business Registry) who will then finalize the creation of the AB. The problem is that Swedish banks don’t tend to open company accounts to foreigners. There is no harm in trying, especially if you happen to represent a famous company. But as a rule, Swedish banks don’t open accounts to unknown foreigners, with no previous history in Sweden.

You might discover that many service providers offer shelf companies, starting from 2 000 SEK and up. This option is also not suitable for foreign entrepreneurs. A shelf company in Sweden, is an AB in the last stage of registration with Bolagsverket but is still dependant on a bank confirmation. So, you will end up in the same situation as with a completely new AB.

The only option left is to buy a ready-made company. There are many service providers in Sweden who offer ready-made, never used companies. These companies have moved past the bank confirmation stage, and you can simply buy them, change the board and owners, and create a bank account at your regular bank. Such companies are sold for between 15 000 – 30 000 SEK.

State fees: 0 – 1 850 SEK

When buying a new Swedish AB, you need to submit applications for changing company information (board, address, name etc), and changing beneficial owners. When using your domestic company, no state fees are required.

The information changing fee is 1 600 SEK, and the beneficial owner fee is 250 SEK.

Fees from various mandatory service providers: 4 800 SEK

To sign the Byggavtalet you are required to have two service agreements. The first is an occupational healthcare policy. The second is an agreement with ID06, one of the leading worksite personnel ledger handling organizations.

There are many occupational healthcare providers with different pricing structures. For the more basic policies, a good rule of thumb is to expect an annual price of 200 SEK/worker. So, in our example with 20 workers, we will estimate the annual fee to be 4 000 SEK.

ID06 pricing is also dependant on the number of workers. In the beginning, when there are no active workers in the company, you can expect an 800 SEK annual fee for the services required by Byggnads.

These agreements are mandatory for both domestic companies and Swedish companies.

Translation of foreign language documents: 0 – 5 000 SEK

When signing Byggavtalet with a domestic company, you need to submit documents from domestic authorities, like a proof of registration and a list of beneficial owners. These documents are likely not written in Swedish, and Byggnads demands that non-Swedish documents be translated to Swedish. In addition to translating the aforementioned documents, it is likely you need to translate at least one work agreement as well, as work agreements are usually drawn up in the language of the country where the company resides. The price depends on the content of the documents, the language pair, and the translation providers pricing policy. A good estimate would be between 1 000 – 5 000 SEK. If you’re using a Swedish company, there is often no need to translate anything.

Company address rent: 0 – 30 000 SEK

When applying for Byggavtalet with a Swedish company there is a small risk that Byggnads will refuse to sign the agreement if the company does not have a proper office address. A postal box address will not be good enough, and sometimes a coworking space address won’t suffice either. Byggnads rationale is that a proper construction company needs a place of operations, where people can work, workers can visit, and tools and materials can be stored. The sincerity of this objection is debatable. I did have a case like this where a company was refused to sign Byggavtalet, because of this reason. Because of this, it can be a good idea to budget for such an expense. Fortunately, this kind of objection does not seem to happen that often.

Travel costs to Byggnads office: 0 – 20 000 SEK

When Byggnads invites you to sign Byggavtalet, the firm representative must attend the meeting in person, at their office. In addition, an authorized interpreter must be present (more on that in the following section). The location of the firm representative and the location of the Byggnads office that you intend to enter the agreement with, determines the mode of transportation and the price. Usually, the firm representative of a foreign construction company does not live in Sweden, and you should expect to pay at least for flight tickets and car rental. Sometimes even accommodations to stay the night if necessary.

Hiring an authorized interpreter: 5 000 – 20 000 SEK

Unless you have a Swedish speaking firm representative, you have to provide an authorized interpreter for the agreement signing meeting. This is one of the more recent Byggnads demands that came into effect only a few years ago. The interpreter is to interpret everything being said during the meeting from Swedish to the firm representatives language, to ensure the representative fully understands the terms of the collective bargaining agreement. Here too the price range is quite wide. The final price depends on the language pair, the location of the interpreter, and the individual pricing policies of the interpreter. Generally, most authorized interpreters are based in larger cities. If the Byggnads office is located outside of the bigger cities, then the probability that you’ll also have to pay the interpreters travel expenses is high.

Byggnads service fees: 21 701 SEK

When the Byggavtalet is finally signed, Byggnads will invoice you for two annual fees. The first one is an annual general service fee for having the agreement, 3 501 SEK. The second fee, which is a new addition since 2023, is an annual fee to finance the organization Svensk Byggkontroll (Swedish Building Control). This is a new entity within Byggnads whose sole purpose is to check and make sure construction companies comply with collective agreement rules. To finance the activities of Svensk Byggkontroll, companies who have signed collective bargaining agreements with Byggnads independently, are invoiced yearly. The size of the invoice is dependant on the number of workers. In this example, when we use 20 workers, the annual price will be 18 200 SEK.

Bonus: Travel expenses for all the workers: 0 – 50 000 SEK

Usually, companies are not required to bear this cost but it is worth mentioning. Byggnads has the right to demand the physical presence of all the workers falling under the collective bargaining agreement, during the agreement signing meeting. I have never personally seen this happen, that Byggnads actually enforces this rule, but it’s a risk worth taking into consideration. Therefore you might see a cost increase in your investment, if Byggnads decides to enforce this demand. The cost would depend on the number of workers, their geographical location, and selected means of travel.

Summary

Let’s summarize all the fees.

Company registrations: 0 – 30 000 SEK
State fees: 0 – 1 850 SEK
Mandatory service provider fees: 4 800 SEK
Translation fees: 0 – 5 000 SEK
Office or accommodation rent: 0 – 30 000 SEK
Travel expenses for Byggnads agreement signing: 0 – 20 000 SEK
Interpreter fee: 0 – 20 000 SEK
Byggnads service fees: 21 701 SEK
Bonus: Travel expenses for all workers: 0 – 50 000 SEK

Total: 26 501 – 183 351 SEK

As you can see, the span is quite wide, and the final price will be decided based on each individual company’s circumstances. If you are visiting this website, it is likely you are a foreign construction entrepreneur with no previous experience in Sweden and a limited contact network. In that case, you should be prepared to invest at least a 100 000 SEK to get the Byggavtalet. I advise you to look at this process not as a cost, but as an investment. Signing the Byggavtalet agreement needs to be done only once, and it gives you access to all projects where the main contractor requires a collective bargaining agreement. Even after you have concluded all your business in Sweden, it is possible to sell the company to a new owner. A ready-made company with history and an active collective bargaining agreement is very valuable, as it enables new entrepreneurs to win projects that are dependent on being able to start working on the project site quickly. Buying your company would save a new owner 3+ months of waiting time.

On average, foreign contractors should be ready and willing to make a 80 000 – 100 000 SEK investment to sign Byggavtalet (or other collective bargaining agreements). However this would assume you do everything yourself, without using outside help. For first timers, it can be difficult to buy a ready-made Swedish company, to fill out the registration forms correctly, to find a good healthcare policy, translation bureau, interpreter, and knowing how to communicate with Byggnads.

My Full Service – Project Sweden package takes care of all of that. In many cases time is more valuable than money, and by hiring an experienced expert to help out with signing the collective bargaining agreement you maximize your chances to get the agreement signed in time and being compliant with all the regulations set out by Swedish law and the collective bargaining agreement.

Feel free to reach out to me if you want to know more about signing collective bargaining agreements.

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