The Accounts Blog

How stuff works: Fåmansbolagsreglerna

 |  By Mikael Green  |  Posted in How stuff works, Okategoriserad

What’s this about?

Sweden has special rules for small companies with few owners, also known as the “3:12 rules” from an old law paragraph. We’ll use this term here, for lack of a good translation to the common name “Fåmansbolagsreglerna”. These rules regulate a number of things regarding owners in small companies – here we’ll focus on the taxes you pay when you receive dividends or sell shares in your company.

This is an overview of the rules – the idea is to give you an understanding of what the rules are all about, not to teach you to do all the exact calculations or handle every kind of situation. Skatteverket has a brochure on the subject, and BL Information has a whole book.

I haven’t found a good translation for “fåmansbolag”, which literally means a company with few owners. So let’s just use the Swedish term, shall we?

Is your company a fåmansbolag and are your shares qualified?

If you own shares in an unlisted (i.e. not publicly traded) aktiebolag with one or relatively few owners, we can probably assume it’s a fåmansbolag. The formal criteria is that the four largest owners (or fewer) together have more than 50% of the votes in the company.

So can you divide ownership among family members to avoid being classified as a fåmansbolag? Nope, sorry, all close relatives (“close” being defined in the 3:12 rules) are counted as one person in this aspect.

If you work actively in the company and don’t have any larger, passive co-owners, we can assume that your shares are qualified. This basically means the 3:12 rules kick in at full effect. We’ll first go through the rules for qualified shares, but see the end of the post for a couple of exceptions and a deeper dive regarding the term “qualified”.

Note that these rules only apply to individuals who own shares, not for companies owning shares. More about holding companies further down.


The main reason for the 3:12 rules is the progressive taxation of work (salary) income in Sweden. The marginal tax rate (the tax you pay on your next SEK of income) on salary income in Sweden starts at around 29% (well, in practice a bit lower, but let’s go with this) and jumps by 20 percentage points on everything above an annual income of 523 200 SEK (2020). There used to be another 5 percentage point jump on even higher income, but that was removed in 2020. The tax rate on capital income is however a flat 30%, e.g. if you sell shares on the stock market or receive dividends from your stock market investments.

So let’s say you’re making good money in your company, so good that your marginal tax rate would be quite high should you take out all profits as salary. You’d then be inclined to keep your salary down and instead save up profits in the company to later pay out as dividends at the 30% capital tax rate, thereby circumventing the progressive tax rate on work income.

But we can’t have that, now can we? So for people who basically can decide themselves how to allocate their company’s income (i.e. owners in fåmansbolag), the 3:12 rules simply limit the amount of dividends and capital gains that get taxed as capital income, while the rest gets taxed as salary income.

Let’s say you receive dividends from your fåmansbolag. On the amount you can treat as capital income you pay 20% tax, i.e. a bit lower than normal capital income. While on any amounts above this cap, you pay taxes as if it were salary income (i.e. 29% to 55%).

So where exactly is this cap? This is where the “gränsbelopp” comes in – we’ll use the Swedish term, but “dividend allowance” could be an approximate translation.


Each year, every owner who owns shares in the company on January 1 (meaning you must become an owner no later than December 31), gets allocated a gränsbelopp, which simply put is the amount you can receive as dividends (or capital gains) at 20% capital income tax. Another Swedish term is “utdelningsutrymme”, although it can be used for capital gains as well. If you don’t use your gränsbelopp, it’s accumulated and saved for future years.

Note that the amount a company can distribute as dividends depends on the amount of free equity (profits) in the company, and it’s the shareholder meeting that makes decisions about dividends. The 3:12 rules don’t have anything to do with this. The gränsbelopp in the 3:12 rules controls only what happens tax-wise for each co-owner when they receive dividends. However, owners in small companies naturally take their gränsbelopp into account when deciding on dividends.

The gränsbelopp can be calculated in two different ways – a main rule and a simplified rule. Each owner can each year choose which rule to use that year.

The simplified rule

Let’s start with the easiest one. Here the owners of a company get to share 2,75 IBB (inkomstbasbelopp), proportional to their respective ownership share. The IBB is an official number decided on for each year, that’s used for various calculations by Skatteverket and other authorities. For the gränsbelopp we always use the previous year’s IBB. The IBB 2019 was 64 400 SEK so the standard allowance 2020 is therefore 177 100 SEK. In other words, if you own 50% of the shares you get 88 550 SEK as gränsbelopp for the income year 2020.

The only caveat is that, if you own shares in several companies (fåmansbolag), you only get to use the simple rule in one of your companies each year.

The main rule

OK, so here’s where it gets a bit more complicated.

The gränsbelopp is calculated as around 10% of your purchase price for your shares, plus sometimes a salary-based component. The “around 10%” is more precisely the state interest rate (statslåneräntan) + 9 percentage points. For the income year 2020 this amounts to 8,91%.

It’s with the salary-based part that things get a bit hairy, so buckle up. We look at salaries of the previous year – for the gränsbelopp for the income year 2020, which is calculated in your income tax return that you submit in the spring of 2021, we use the salaries of 2019.

First of all you need to take out enough salary yourself in order to use the salary-based component. This threshold is a bit tricky to calculate, but it starts around 407 000 SEK (salary year 2019) and increases with total salaries in the company. More precisely, the threshold is either 9,6 IBB (618 240 SEK in 2017), or 5% of the company’s total salaries plus 6 IBB, which for 2019 means 386 400 SEK plus 5% of total salaries.

If you yourself (or a close relative) takes out enough salary, you get to add a salary-based amount of 50% of the company’s total salaries (to all employees) multiplied by your ownership share. Important: if your salary is as little as 1 SEK below the threshold, you can’t use the salary based component at all, so do keep an eye on your salary levels towards the end of the year.

Confused yet? 🙂 Let’s do an example. Let’s say you’re alone in your company, you purchased your shares at 50 000 SEK (e.g. if you started the company yourself before they lowered the limit to 25 000 SEK), the company’s total salaries in 2019 is 1 MSEK and you took out 450 000 SEK yourself. 386 400 SEK plus 5% of 1 MSEK is 436 400 SEK, so your salary of 450 000 SEK is above the threshold and you can add the salary-based amount to your gränsbelopp. Your gränsbelopp for 2020 then ends up at 8,91% of 50 000 SEK plus 50% of 1 MSEK, for a total of 504 455 SEK. Not too shabby, compared to the simplified rule.

Tax return

Owners in fåmansbolag have their very own tax return form called K10. Unless your shares are unqualified (see further down), in which case you’ll use a K12 form instead. In the K10 you calculate your gränsbelopp for the year, as well as any tax on dividends or capital gains, should you have any.

Exception: Unqualified shares

We said before that if you work actively in your company your shares are probably qualified, which is when the 3:12 rules apply. But there are situations where your shares are not qualified, which means an entirely different set of rules. The most common case is if you’re not active in the company, or more precisely if you aren’t “important for the profit generation” in the company. The Swedish term is “verksam i betydande omfattning”. Maybe you own shares but you only participate in a couple of board meetings each year. Or your company owns real estate, but the entire operation is handled by a real estate management company and you don’t lift a finger.

If your shares are unqualified, we can forget everything we said above about gränsbelopp – instead you pay 25% flat tax on all dividends and capital gains, regardless of the amount.

Some business owners accumulate profits in their company and eventually want to retire, go passive in their company and pay out all profits at 25% tax. But there’s a five year “quarantine” meaning you have to be passive for five years before your shares become unqualified. Some people put their company aside for five years in order to later pay out profits at 25% tax.

Exception: External owners (Utomståenderegeln)

If the company has external passive owners with at least 30% ownership (more preceisely, if they have the right to at least 30% of dividends), all shares in the company become unqualified. A common example could be an investor who doesn’t work in the company, but owns 30% or more of the shares.

The reasoning is that if such a large part of the company is owned by others, you don’t have anything to gain from passing up salary for dividends, since such a large part of dividends go to other owners.

Owning through a holding company

The 3:12 rules apply to you as an individual and the shares you own. They don’t apply when a company owns shares in another company. If you have a holding company owning shares in another company, both companies may indeed be fåmansbolag, but dividends and capital gains in the daughter company are tax-free in the mother company, exactly like any other unlisted shares owned by an aktiebolag. It’s only when the holding company pays out dividends to you, or when you sell shares in the holding company, that the 3:12 rules kick in.

However, as long as your holding company owns more than 50% of the daughter company, you can use (your ownership part of) salaries in the daughter company (together with any salary in the holding company) when calculating the salary based amount in your holding company.

Sadly, being active in one of these companies is “contagious”. So being active in the daughter company means your shares in the mother company are automatically qualified.

The question of whether to own privately or through a holding company can be complicated and you should get a professional opinion if you don’t know exactly what you’re doing. A rule of thumb is that it’s much easier to create a company structure than to dissolve one, so when in doubt you may want to just wait with creating a holding company structure until you’re sure that’s what you want to do.

Future changes

The 3:12 rules are always a hot topic among business owners and politicians. There’s often talk about reforming these rules, but no significant changes have been made in years, apart from adjusting the percentages and amounts every now and then.


OK so this was a quick summary of the 3:12 rules. Having a general grasp of these rules is good for any owner of a small company in Sweden. You can absolutely take a stab at filling out your K10 form yourself, especially if there’s only you in the company. But with more owners and/or employees comes more complexity, and there are nooks and crannies of the 3:12 rules that we haven’t touched on here, so don’t hesitate to get help from an accountant when things get complicated.

(This post was updated on 2020-08-25 with new amounts and, ahem, some spelling and stuff).


  • Great article! Really valuable info, even though it is 6 years old now.
    Any chance of an update for current regulations and amounts?

    • Hi Allen,

      Thank you, I’m glad you liked it. I did go through it now and updated it with current amounts. Regulations in general are pretty much the same, though.

  • Muhammad Umar Zubair

    Hello Mikael, very usefull information you upload here, My question is that if loss in company happed for example -63365 sek then how share loss>> ???
    best regard zubair

    • Hi Zubair,

      I’m glad you like it. Not sure I understand your question to 100%, but I’ll give it a try. 🙂

      Above we’re talking about aktiebolags, and they are separate legal entities that have their own assets, liabilities and equity. A loss in an aktiebolag simply reduces the company’s equity. Tax-wise, a loss can be accumulated and deducted against profits in future tax returns. All this doesn’t affect the owners directly, other than that the equity is reduced and thereby the amount of dividends that can be paid out and probably the value of the shares. So a loss is never explicitly “shared” among the owners per se.

      For e.g. a handelsbolag it’s different. Although this is also its own legal entity, profits and losses are tax-wise shared among the owners in their private tax returns. Exactly how they are shared is pretty much up to the owners.

      I hope that answers your question.

  • Super helpful piece! I have a question. I believe that saved dividend space gets increased by an interest rate — “Ränta för uppräkning av sparat utdelningsutrymme”. But say in 2021 one wants to use dividend space saved from the previous 5 years (none having been used). Does the interest rate compound each year? I.e. does dividend space saved from say 2016 get increased by c.3% *each subsequent year*, meaning that by 2021 it is c.15% higher? Or is there just a one-off increase? Thanks.

    • Hi Brett,

      It compounds. Each year you calculate your dividend space in your K10 form, which simply put goes a bit like this: You start with any saved amount from last year, you increase by the current year’s “interest rate”, add the additional amount you get for the current year, decrease by anything used for dividends or capital gains, and if there’s anything left it gets saved for next year.

      So yes, your amount from 2016 would be multiplied by 1,03^5, i.e. 15,93% higher (assuming 3% per year as an example). But you’d also get an additional amount each year, of course. And the 2017 amount would be 1,03^4 higher after 4 years and so on.

  • Thanks so much!

  • Hi Mikael – a follow-up question to your reply to Mohammed: can a loss be carried back against a previous year’s profit? (Maybe even to reduce the current year tax bill)

  • Hi Mikael. Please elaborate: is the dividend paid after corporate tax paid by the company or dividend paid before company tax ?

    • Hi Petr,

      After corporate tax. So when a company closes its year we calculate the corporate tax for the year. Whatever is left of the profit after corporate tax becomes free equity, which is what is available for dividend payouts.

  • Well written. thanks Mikael. As this was written sometime back does the same rules apply even today or is there any major change?

    • Hi Aravind,
      I’m glad you liked it. Yup, everything still applies, apart from the amounts that change from year to year.
      The new government has mentioned an overview and possible overhaul of this set of regulations, but then again – so has probably every government for the last 20 years. 😀

  • Wonderful article. If the company has no employees hence all shares are unqualified, and the shareholders draw down shareholder loans to the company at an interest rate , would the earned interest on the loan repaid qualify as dividends payable at a rate of 25% too?

    • Hi Thomas,

      I’m so sorry for the insanely late reply and approval of your comment. I have no idea why this didn’t show up in our comment feed until now.

      Whether shares are qualified has to do with each shareholder’s activity in the business, and to what extent they are important for the income generation in the business. It’s of course more to the story, but the gist of it is that it’s about each shareholder’s situation, and isn’t necessarily affected by whether the company has employees or not.

      If a shareholder loans money to the company, and the interest rate is deemed to be at “market level” (i.e. not too high), this is normally considered interest income for the shareholder at 30% tax rate. So it’s not dividend and not part of the qualified/unqualified rule framework.

      If the interest is higher than what is deemed “market level”, I guess that could either be considered as work income (similar to salary) or dividend. My guess is work income however, so probably a higher tax level than interest. It would not make sense that the company has a tax-deductible interest cost, which is then taxed at only 25% (or even 20%) for the owner, which would be lower than interest income.

  • Hi Mikael. Thank you for the detailed article. I would like to check additional questions: I have two companies one in Sweden and second one is outside of EU. Both companies are 100% owned by me and I am active in both companies (according to your article is it fåmansbolag and are my shares are qualified). Is it the same rules apply (described in your article) to pay dividents from the second company (outside of EU) to me as resident in Sweden ? If not , how does it work for small companies owned outside of EU ?

    • Hi Petr,

      If you’re a tax resident in Sweden, the same rules generally apply regardless of whether the company is in Sweden or abroad. But I’m saying “generally”, since I can’t say for sure that this is always the case. One thing is that it may be difficult to say whether a foreign company is exactly equivalent to a Swedish fåmansbolag. Another is that local regulations may apply to the foreign company that will affect taxation.

      So the general principle is that it should work the same way. But to be sure you would probably have to look closer at each individual case.

  • Great work!
    Sorry have some questions that might sound inappropriate given my total ignorance.
    If one was offered to purchase shares in a foreign small company for a certain price. Company sold its assets 1 year later and the deal involved paying part in cash and part as shares in the new holding company. Role in small company was consultant. No role in the new holding company. This income would be cosidered as capital gain of unqualified shares and the new shares are not taxable for the moment?

    • Hi Mo,

      I’m sorry, but that’s really hard to answer on a blog. Too many unknowns, and the risk is just that I’ll give you the wrong info. I think you need to bounce this off someone who has all the details of your situation. Sorry about that. 🙁

  • I would also like to know whether there is a way to carry back losses. Especially if I know in advance that after a high income year I will have worse years.

    • Hi Johnny,

      Well, it’s not really related to the topic of the blog post, since it deals mainly with the situation of an owner of shares in a small company.

      However, to answer your question, you can’t carry back losses per se in Sweden. Assuming that by carry back losses you mean retroactively applying a loss to a previous year’s income tax return. However, you can achieve a similar effect if you think ahead and in a previous profitable year set aside profits in a tax allocation reserve (“periodiseringsfond”). This means profits won’t be taxed that year, and instead in a future year are brought back to the income statement. So if profits are set aside in the tax allocation year in a profitable year, and brought back in a loss year, you’ll receive the same effect.

  • Hi Mikael
    A very good and simplified explanation.
    Maybe it’s a dumb question but I still wanted to ask you! I have recently become a partner from feb 2023 and my partner says that my k10 declaration will be done in 2025 and not in 2024. I don’t understand that and wanted to ask about it? Is it ok to do so or there is something I should know? Also we are not planning to take our profits this year anyway. When I read online it’s says that we should fill our aK10 every year but my partner has planned to fill it every other year! Please can you give som insight or link to read further
    Thanks and regards

    • Hi Monika,
      No, it’s a pretty good question and many people mix the years up when it comes to the K10.
      So you’ll get a dividend allowance (“utdelningsutrymme” or “gränsbelopp”) every year if you own the shares at the beginning of the year. So for the income year 2023 (which we are currently submitting tax returns for), you won’t get an allowance amount since you became an owner in February 2023.
      If you received dividend or sold shares in 2023 you of course need to submit a K10 form anyway, since it’s on that form we declare those things. However, with no dividend, no share sale and no allowance amount in 2023, there’s no point submitting a K10 for 2023, since it would be completely empty.
      Starting next year (2025) you should submit a K10 form (for 2024), however. Even if you have no income in the K10, you’ll get the allowance amount which will accumulate and be rolled over to future years.
      Nothing would actually happen if you left out your K10 for those years you have no dividend income or share sales. But it’s really recommended to submit a K10 form every year, in order to keep track of your dividend allowance. So when some day in the future you need that accumulated allowance, you don’t have to retroactively redo your old K10s and explain to Skatteverket where your accumulated allowance comes from.

Write a comment

Your email address will not be published. Required fields are marked *