Sweden is politically and economically stable. The country has a tradition of minority rule and consensual politics. A party must receive at least 4% of all votes in the election to gain representation in the Riksdag. The government holds executive power but is accountable to the Riksdag. The Riksdag appoints the prime minister, who is tasked with forming a government and selecting the Cabinet. The judiciary is independent from the executive and legislative powers. Media and civil society operate freely and provide effective checks and balances. Democratic institutions are well-established, reducing the threat of serious political instability and the threat of unconstitutional change in government. The country is a member of the EU and firmly anchored in the regulatory and institutional framework of the organisation. Policymaking is transparent and free market standards are entrenched.

The political environment in Sweden is favorable for business. The country enjoys basic political stability and a tradition of consensual politics normally prevents serious instability. However, the fragmentation of the party system in recent years has made stable coalitions more difficult to forge, as evident by the prolonged government formation process after the September 2018 elections. This increases the scope for occasional government instability and policy disruption but is unlikely to jeopardize basic political stability. There is broad agreement on the country’s pro-Western orientation and free-market principles are entrenched. Policymaking is transparent.  

There is a long tradition of minority rule – most often led by the Social Democratic Party (S) – and politics is generally consensual. However, the rise of the far-right Sweden Democrats (SD) has started to erode some of this consensus, including through challenging established rules and practices. As stated above, the September 2018 general elections produced a highly fragmented parliament. The strong performance of the far-right populist Sweden Democrats (SD) meant that neither of the traditional blocs secured a majority. This led to a lengthy government formation process. Prime Minister Stefan Lofven of the Social Democratic Party (S) now leads a minority coalition of S and the Green Party (MP), supported by the center-right Centre Party (C) and the Liberal Party (L). The government is likely to be stable in the coming year, but the diverging agendas of the coalition and its supporting parties are likely to occasionally pose a challenge to its effectiveness and could jeopardize government stability in the longer term.

The country is a member of the EU and enjoys good relations with neighbors and key allies. Sweden faces no diplomatic or border disputes and has no longstanding external animosities that might affect business activity. Sweden maintains friendly relations with most countries, though outspoken foreign policy positions can at times strain diplomatic relations with specific countries.

Sweden’s relations with Russia are in line with the relations maintained by other EU countries. However, diplomatic disputes have become more common in recent years, often in relation to perceived military provocations by Russia near or in Swedish territory. 

Sweden is considered a Full Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 3 out of 167 countries scored.

The country ranks 7 at the Human Development Index developed by the United Nations Development Programme.

Sweden has one of the world's most internationally integrated economies and welcomes foreign investment regardless of which government holds office. Foreign companies face few operational obstacles. Petty and high-level corruption is very rare. While the costs of complying with both Swedish and EU regulations can be high and the tax burden for companies is relatively high, businesses encounter few serious obstacles from the public apparatus.

The transport and communications infrastructure are of the highest quality, with efficient rail and road networks, and secure and modern ports. The domestic telecommunications network is deregulated and among the best in Europe. From an international perspective, unit labor costs are comparatively high and labor laws are very protective of workers' rights. However, workers are well-educated and highly-skilled. Relations between employers and trade unions are generally accommodative. Although labour unions are influential, strikes normally take place in a transparent manner within established legal frameworks. Sweden's integration in global value chains renders it especially vulnerable to an economic downturn as a result of the coronavirus disease (COVID-19) virus pandemic.

As in other Western European countries, the level of environmental awareness is high. Environmentally sensitive business projects require careful planning, both to meet stringent legal requirements and to pre-empt any adverse publicity or protests from environmental pressure groups or local communities. Radical environmentalists are active and sometimes launch campaigns against companies that are deemed to condone, promote, or actively pollute the environment. Environmentalist and local community groups – including the indigenous Sami population in the north of Sweden – have actively campaigned against projects in, for example, the mining sector, including through petitions, demonstrations, and legal challenges.

Potential visitors should take note of a few useful points prior to departure: vehicles are required to be fitted with snow tires from November 1 until April 30. The Swedish motorway is in excellent state.

The driving is on the right side of the road. Due to the important number of accidents linked to wild animals, it is advised to be very careful when driving outside of cities. There is no tolerance towards driving under the influence of alcohol. Drivers are charged a toll when entering or leaving Stockholm between 06:30 and 18:30 from Monday to Friday. Efficient ferry services operate between Sweden and neighboring countries on the Baltic Sea.

It should be noted that public transit systems are reliable and punctual. Modern trains offer travel throughout the country. In this calm country, social movement (e.g. a trade union strike that took place in June 2014 disrupting rail travel within Sweden and between Sweden and Denmark) or inevitable weather conditions during winter could impact on the travelers' comfort. Air and rail traffic often suffer from disruptions during the winter.

Taking a taxi, especially independent taxis or small companies, can be very expensive. It is advised to check the posted prices before leaving, as they can be exorbitant for numerous foreign travelers.

Overall, Sweden ranks 10 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 3 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

Sweden enjoys a favourable security environment, with no serious threats to foreign businesses. Petty street crime is the threat most likely to affect business personnel, but it is minor. Although various violent groups have a presence in the country – including right-wing extremists, organised criminal groups and Islamist extremist supporters – they pose a very low direct threat to businesses or their personnel. Security threats are marginally higher in the larger cities: the capital Stockholm, Gothenburg and Malmo.

Overall levels of crime have been largely static since 2015, with a slight uptick in the number of reported crimes each year. According to data for 2018, the number of reported crimes increased by 2% year-on-year. Crimes against the person increased by 1% year-on-year.

Organized criminal activity is concentrated in Stockholm, Gothenburg, and Malmö. Malmö is a particular hotspot because of its location in southern Sweden, across the Öresund Bridge from the Danish capital, making it a node in arms and drug trafficking routes from continental Europe to Scandinavia. There has been a significant increase in the number of shootouts and IED attacks in all three cities in recent years, indicating the growing recklessness of criminal gangs operating in Sweden.

In August 2018, up to 200 vehicles were set ablaze by youth in the outskirts of Uppsala, Gothenburg, and other cities in western Sweden. The incident was reminiscent of the week-long riots in Stockholm and other cities in May 2013 and February 2017 and demonstrates the potential for unrest among disaffected youth. Triggers for renewed rioting would be instances of police brutality. The suburbs of Stockholm, Gothenburg, and Malmö are most at risk. There is also a risk of violence in connection with neo-Nazi and anti-Nazi demonstrations across the country. Although Sweden has several active protest groups across a range of issues, public protests are generally peaceful, lawful and relatively small, and present a very low threat to business operations, assets or personnel. 

Sweden recently reintroduced military service and stationed troops on Gotland, the largest island on the Baltic Sea, for the first time in a decade. These measures reflect the deteriorating security situation in the Baltic region, which follows the growing Russian military assertiveness since 2014. War risks remain low, but there is a heightened risk of unintended escalation due to Russian aerial and maritime incursions into Swedish territory. Although Swedish membership in NATO remains unlikely in the one-year outlook, the situation could change if Finland, Sweden's historical ally, takes concrete steps towards accession.

The terrorism risk in Sweden is LOW, in line with the overall threat in Western Europe, but lower than in more high-profile countries such as France, the UK and Belgium. Counter-terrorism capabilities are strong and the country has strengthened legislation, intelligence sharing and cooperation with other EU countries and key partners in recent years. Extremist groups including Islamic State (IS) and al-Qaida have supporters in the country, which hosts sizeable immigrant communities that could be vulnerable to exploitation by radical elements. On 7 April 2017, a hijacked truck was driven into crowds in central Stockholm, killing four and injuring 15 people. The terrorist attack highlights the continued risk of Islamic State-inspired vehicle-impact attacks. However, the risk of more complex and co-ordinated attacks similar to the November 2015 attacks in Paris is lower than in other Western European countries such as France or the United Kingdom, which are of greater strategic and symbolic significance.

Overall, Sweden ranks 15 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

No vaccinations are required to enter the country.

Sweden ranks 7 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

Summers can be very hot but become shorter and shorter as you head north. Winters can be very cold, particularly in the north. Following the weather conditions in the case of traveling is essential.

If you plan to visit Sweden, stay informed by the Emergency Preparedness.