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Bank License – Swedish Credit Union – Sparkassa

Swedish Credit Union – Sparkassa

A sparkassa (Swedish credit union) always has the legal form of a cooperative (ekonomisk förening). It cannot be incorporated as a Swedish limited liability company or joint-stock company, but founded under this legal structure.

Members of the board of directors / directors   A sparkassa is a registered cooperative (ekonomisk förening). With such cooperative the following persons have to be resident in the European Economic Area:

  • The director/s (if any)
  • At least half of the members of the board of directors
  • At least half of the vice members of the members of the board of directors (if any)
  • At least one of the company’s authorized signatories (if any)

In individual cases the Swedish register of companies can allow for an exception for these residency requirements upon request. Even then a specific recipient for the sparkassa, who is registered and resides in Sweden, has to be named.   The board of directors of a sparkassa has to consist of at least three members of the board of directors.   A registered cooperative is only required to appoint a director, if at average it employed more than 200 employees in the last two years. Otherwise the appointment of a director is voluntary.

Swedish Credit Union – Sparkassa:  Accountant  

The sparkassa has to have at least one accredited or officially appointed (in Sweden) accountant. Once the cooperative reaches a certain size (more than 50 employees in the last two years, total assets higher than 40 million SEK, net sales more than 80 million SEK) an officially appointed financial auditor is to be appointed. In case no (in Sweden) accredited or officially appointed auditor is appointed, the appointed auditor has to reside in the European Economic Area.

Legitimacy of the formation of a sparkassa according to Swedish law (Swedish Credit Union)  

The formation of a Swedish sparkassa is according to the Swedish law generally still permitted. The following preconditions and requirements have to be observed for the formation and operation of such sparkassa. The sparkassa is to be registered with a Swedish financial auditor. Though the financial auditor does not conduct extensive financial supervision, it regularly controls the compliance with the following criteria:

  • The sparkassa has to have at least one accountant.
  • The maximum number of members cannot exceed 1.000 people.
  • The maximum amount that can be received by a consumer cannot exceed the amount of 50.000 SEK (equates to approx. 5.500 EUR).
  • The articles of association have to include a definite and clear regulation about which criteria a person has to satisfy to become a member of the sparkassa. These articles of association have to be submitted to the Swedish business register.
  • Repayable deposits can only be accepted by the members respectively financial firms.
  • The sparkassa has to be geared towards financing the members‘ borrowing requirement solely through the repayable deposits of the members.
  • The financial auditor is to be informed immediately of all changes at the sparkassa management level.

A sparkassa can be incorporated by a Swedish stock company (aktiebolag), a registered cooperative (ekonomisk förening) or by a foreign corresponding type of company.

Swedish Credit Union – Sparkassa: Capital market law considerations  

For financial services the law of the financial service corporation’s state of residence applies AND the law of the provider / distribution countries. Though within the EU cross approval, EU freedom of establishment and services, European passport take effect. Therefore an EU financial service corporation can serve the whole EU without reapproving the license for the respective EU provider / distribution country. This very thing is an essential advantage of the Swedish credit union (sparkassa): Generally deposit banks in the EU need a minimum opening capital of 5 million Euro. Exempt from this is the Swedish credit union. It is allowed to offer financial services within the entire EU and is exempt from the regulations of the EU financial services directive. It is in principle allowed to realize all bank business provided that it is carried out among the members. Symbolically the minimum deposit capital is one Euro.

Legal business location in Sweden  

The link-up with business center in Stockholm is possible: Postal address, own phone number, individual call reception with the name of the sparkassa, fax, mail forwarding. Fees dependant on business center, between 120 up to 160 Euro per month. Our nonrecurring link-up fee is 450 Euro. The business centers demand a set-up fee of 120 Euro and a deposit of three monthly fees.