Stockholm – the capital of capital

^{– Patrick Jenkins, Financial Times, 6 October 2025}

Sweden often receives international praise for its capital market, and the acclaim spans the entire ecosystem from the premium pensions (PPM) and pension fund managers to the stock exchange, venture capitalists, angel investors and private individuals. It is the result of a deeply rooted culture of saving and long-term investment, built over decades.

These are not just observations, according to Euroclear Sweden, savings in equities and financial assets increased in 2025 with extensive economic activity across all age groups.^[1] International comparisons highlight the breadth of Swedish households’ participation in the capital market as one of the country’s most distinctive characteristics.^[2] Equity and fund investments strengthen household finances, increase resilience during downturns and democratise ownership. Women’s participation in the capital market has also increased, which contributes positively to a long-term approach to investment and better corporate governance.

^{– CFA Institute, 6 February 2026 [3]}

For nearly half a decade after the financial crash in the early 1990s, Sweden’s financial stability was questioned and our credit rating hit rock bottom. The recovery of confidence since then has been remarkable. Much of the attention is now directed towards Stockholm, but it is fundamentally a testament to the strength of the whole of Sweden Inc.

Success factors – Swedish tradition of innovation and entrepreneurship combined with political pragmatism and willingness to reform

There is no one single factor or event that has brought Stockholm and Sweden to this strong position. It is rather a series of successive reforms and decisions that together have shaped the sophisticated ecosystem we have today. A combination of Swedish innovation and entrepreneurship, political pragmatism and willingness to reform has brought us here.

Institutional stability and a high level of trust are indispensable

Two factors are recurrent throughout Sweden’s financial market history, with the exception of the crisis of the 1990s, and can be traced all the way back to the industrialisation: namely, institutional stability and high levels of trust that characterise Swedish and Nordic society. A strong tradition of self-regulation and responsibility from the business sector has shaped the economy in a broad sense, from the Saltsjöbaden Agreement of 1938 to the present day. The links between trust, stable institutions, and economic prosperity are strong, as was highlighted by the 2024 Nobel Prize laureates in economics.

The importance of this became painfully clear in the aftermath of the 1990s crisis, when confidence in Sweden’s financial stability was at rock bottom. Through transparency and determined institutional reforms, a robust system was gradually rebuilt that allowed Sweden to persevere through the 2008 financial crisis.

^{– Apostolos Thomadakis, Head of Research at the European Capital Markets Institute,
in IPE, 12 December 2025}

The golden trinity: innovation, entrepreneurship and capital

The Swedish capital market has not developed in a vacuum. The development is closely linked to a competitive and innovative business community with active owners. Sweden has a strong culture of innovation and entrepreneurship, and many new companies are being started here. Not all of them become global success stories, but those that manage to scale up in Sweden tend to become larger, grow faster and reach higher valuations than comparable companies elsewhere in Europe. Over the past 50 years, of the 13 EU-founded companies that have reached a valuation of over USD 10 billion, four are Swedish. That is twice as many as any other EU country.

Figure 1. Public from-scratch companies younger than 50 years and valued over US$10 bn

A clear example of the political will to reform and pragmatism that has promoted entrepreneurship are the successive improvements to the rules on the taxation of capital gains in closely held companies, the so-called 3:12 rules. The rules themselves were originally introduced as anti-avoidance provisions, but gradual relaxations and adjustments have strengthened the desire to start companies and encouraged long-term ownership.

Tools that facilitate investment, broaden and democratise ownership

^{– Minister of Finance Elisabeth Svantesson,
in Financial Times, 13 May 2025}

A key driving force behind the growth of the Swedish capital market is households’ active savings. Equity savings among private individuals increased in 2025 and the distribution is unexpectedly broad: the 31-40 age group surpassed those aged 51-60 as the largest equity investors, while the highest percentage increase in equity investing was seen among those aged 81-90.^[8] This reflects a generation with strong financial literacy and confidence in the future. ISK and smart technology have made it even easier and lowered barriers to entry.

Swedish households rank at the top in terms of securities ownership, with nearly half reporting that they hold financial assets. It is not only a question of how many people invest, but also how much: 43 percent of total household assets are invested in equities and funds, significantly above the EU average.

When we analyse the Swedish capital market, it is important to understand that it has neither developed nor exists in a vacuum. It is a matter of a sophisticated interplay with our innovative and entrepreneurial business community, where the capital serves as an indispensable lubricant for Sweden Inc.

^{– Apostolos Thomadakis, Head of Research at the European Capital Markets Institute,
in IPE, 12 December 2025}

Figure 3. The Swedish financial ecosystem

The number of listed companies on the Stockholm Stock Exchange was 13 percent higher in 2025 than in 2018, while the London Stock Exchange, Euronext Amsterdam, the Frankfurt Stock Exchange and the Oslo Stock Exchange all had fewer listed companies in 2025 than in 2018.

This increased activity was also reflected among households, with equity ownership among Swedes in 2025 reaching its highest level since 2007.^[9]

Corporate deals outside the stock exchange: increased international interest in Swedish and Nordic companies

It is not only on the stock market that activity levels are high. International interest in buying and investing in Swedish and Nordic companies continues to grow. The single largest off-exchange deal in 2025 was Roche’s multi-billion-dollar deal with Zealand Pharma in Denmark, a collaboration and licensing agreement rather than an acquisition. At the same time, the year was characterised by a large number of small and medium-sized acquisitions, with Sweden dominating both in terms of the number of deals and total volume. The Nordic region thus continues to attract international investors who are looking for fast-growing companies.^[10]

The Swedish private equity sector’s unique role

The Swedish private equity (PE) sector has a unique international position. Although London is the largest in absolute terms, Sweden is one of Europe’s most important PE clusters, with the most PE investments per capita. In recent years, Sweden has accounted for 10 percent of total PE investments in Europe.^[11]

Sweden also stands out in how PE firms are divested. Between 2019 and 2023, approximately 29 percent of all PE exits in Sweden took place via stock exchange listings, compared to a European average of 8 percent.^[12] The fact that private equity firms’ holdings are more often divested via the stock exchange benefits households directly, as they gain access to a wider range of well-managed and developed companies to invest in. International players are also attracted to Sweden and the Nordics for the combination of innovative companies in life sciences, technology and B2B services. Because of this, the private equity sector will ideally remain a key driver in the financial ecosystem going forward.

^{– Financial Times, 14 April 2024.[13]}

American boutique banks establish themselves in Stockholm

Long-term interest in Sweden is evident, with American boutique banks beginning to establish themselves in Stockholm. Specialised merger and acquisition (M&A) advisors such as Evercore and PJT Partners have recently opened Nordic offices here, and more are said to follow. The size of the Swedish and Nordic M&A market and access to well-managed companies are important factors, as are transparent and predictable regulations that simplify analysis and valuation.

Outlook: The Nordics

In a changing geopolitical environment, the Nordic region appears to be a stable hub, with our well-functioning markets, sound regulatory frameworks and functioning institutions. At the same time, there are significant differences between the Nordic markets and the strength of the Swedish capital market becomes particularly clear in this context.

In Denmark the stock market is trending in the opposite direction. Despite the market capitalisation having increased significantly, driven by a handful of companies such as Novo Nordisk, the number of listed companies has declined. With the exception of one minor listing, no IPO has taken place in Denmark for more than 1,000 days (from March 2023 to March 2026). Pension capital is instead invested abroad and small investors are passive. A trade association for listed companies, FBV, highlights how taxes, pension rules and Danish-specific requirements together make it increasingly unattractive to be, or become, listed on the stock exchange in Denmark.^[14] The Danish Social Democrats’ ambition to introduce a wealth tax is adding to the concern, with the risk of increased capital outflow.

Since the introduction of the wealth tax in Norway, private capital has largely left the country in favour of other markets.^[15] Over 500 people with assets above NOK 10 million left the country in 2022 and 2023, and two out of five of these are business owners. The tax loss has been estimated at around NOK 6 billion, which is four times more than the expected revenue growth. ^[16]

Finland’s economy and business community have been hit harder than the rest of the Nordic countries by Russia’s war against Ukraine. Activity on the stock exchange has been low, and Finnish companies are instead seeking growth through acquisitions, including in Sweden. However, there is an exciting dynamic with many start-ups, especially in tech and defence tech.

The pattern is clear: capital is mobile, and the totality of regulations for capital markets and innovation determine where capital goes.

Opportunities ahead

The transformative power of the capital market makes Stockholm and Sweden more entrepreneurial. In order to build further on that position, however, the supply of capital must remain in the next phase of Swedish growth, with tougher international competition and deeper integration in the European capital markets. How should we attract new companies? And how do we ensure that a strong capital market lays the foundation for the technological and societal development that is required, not least in the field of AI?

The AI and tech sectors lead the way

Sweden is known for its innovation and entrepreneurial tradition, and the Swedish AI and tech sector is currently the brightest example of the strength in our innovative capacity. Particularly exciting are the developments in fintech, defence tech and clean tech, where new innovations seek to solve the major social and environmental challenges of our time.

According to a survey in Dagens Industri in February 2026, there are 91 Swedish tech companies with billion-krona valuations outside the stock exchange. At the top of the list is Lovable, valued at SEK 61 billion, which is remarkable for a company, that a year ago had barely raised more than SEK 75 million in capital.^[17] American Workday’s acquisition of the Swedish AI company Sana in 2025 for USD 1.1 billion is one of the largest AI acquisitions in European history and another testament to the competitiveness of Swedish AI companies.

Large capital needs for innovation despite solid public finances

The solid Swedish public finances and the krona’s regained strength are a good foundation. Sweden has one of Europe’s fastest growing bond markets, yet another sign that our capital market is stable and well adapted to the outside world.

But the major challenges for the future require capital of a different magnitude. The complexity of global societal problems and the pace of internationalisation mean that companies wishing to expand need access to large amounts of capital. Workday’s acquisition of Sana clearly illustrates what is and remains Europe’s challenge going forward: the lack of capital in the volume required to scale world-leading companies. For Sweden to maintain its position, our capital market must continue to develop in step with the companies it is to finance.

Challenges

The competitiveness of the Swedish economy is built on capital-intensive innovation. As we now face major structural challenges in AI, defence and the climate transition, demand for capital is increasing. For an internationalised economy like Sweden’s, it is therefore crucial to continue to be attractive to both national and international investors.

Despite the Stockholm Stock Exchange’s strong position, Klarna and Spotify chose New York over Stockholm for their listings. There are surely several reasons for this, but access to capital in larger volumes is likely a major factor. Whatever the reason, the message is clear: Sweden cannot afford to rest on its laurels. We must continue to strengthen our position as a viable investment and marketplace.

A complementary perspective is that Swedish (and European) pension funds should invest more in Swedish startups. Today, Sweden bears the start-up costs but misses out on the value added when companies scale up with American capital.

Regulations must take competitiveness into account

Capital is mobile and reacts quickly to uncertainty. Any signals about possible changes to the Swedish ecosystem (such as a bank tax, a billionaire’s tax, a reduced limit for the ISK or new reporting requirements) risk casting doubt on the stability of the Swedish system. We already saw the consequences in 2018 of increased capital requirements on banks and the bank tax introduced at the time, both of which contributed to Nordea moving their headquarters from Stockholm to Helsinki. It is enough to follow the capital outflows from Norway following the wealth tax, as well as the discussions in Denmark about a similar one, to see what is at stake.

Another current challenge is the Foreign Direct Investment Screening Act (the FDI Act^[18]) which has been widely criticised for being overly rigorous in both design and application. The government’s Implementation Council (Implementeringsrådet) notes in an evaluation that the law is not compatible with how the stock market functions and that the uncertainty, delays and costs this entails risk having major consequences in the form of weakened Swedish competitiveness.

^{– The Implementation Council, 16 February 2026,
translated by the authors of this report.}

The Implementation Council also emphasises that the FDI Act risks holding back sectors with rapid technological development, such as AI, where foreign direct investments are crucial for scaling operations in an early phase.

As the EU now reviews the regulation on foreign direct investments, which is expected to be adopted in spring 2026 and incorporated into Swedish law in 2027, the government must ensure that the business community and capital market participants have genuine influence over how a regulatory framework that balances economic security and competitiveness should be designed.

A less stringent language requirement for reporting would be welcome. The possibility to use English in prospectuses will be introduced in June 2026 through the implementation of the EU Listing Act, which is a step in the right direction. To fully strengthen Sweden’s attractiveness, however, the same flexibility should also apply to companies’ ongoing disclosures, such as financial reports and other market communications. This would open the door for more international companies to choose Stockholm over London or other markets.

The importance of complying with existing rules

In recent years, several cases of insider trading have attracted attention on both the Stockholm Stock Exchange and First North Growth Market, as well as failures to issue profit warnings that have in turn inflated or even fabricated revenues. This is particularly the case in medium-sized companies that are not subject to the same requirements as the large ones.

Insider trading and regulatory violations erode the trust that has been built up over decades. We have a long tradition of self-regulation in the business community and have thus been able to avoid legislation. When select actors abuse that trust, one of the pillars of our success is undermined. Capital market participants must act swiftly and decisively to ensure that misconduct is identified and sanctioned.

All of this is fundamental to ensure that individuals continue to pass on and develop our long-standing tradition of active saving and investment, which spreads and democratises ownership.

The EU and the capital markets

The ongoing work to implement the conclusions of Mario Draghi’s report on European competitiveness requires close attention and active engagement. This is particularly true of the European Savings and Investment Union Strategy (SIU), presented in March 2025, which aims to strengthen Europe’s competitiveness by, among other things, activating idle savings and fostering a culture of saving and investment among European households.

As the EU now seeks to strengthen its capital markets, Sweden must be active and prepared, both as a role model and as a clear voice for an open, efficient and trust-based ecosystem. Draghi’s report urged the EU to incentivise stock market investment for households’ approximately €1.4tn of annual savings, pointing to Sweden’s approach as a model worth replicating across Europe.

Sweden and Swedish policymakers must engage actively and advocate for regulatory frameworks that facilitate investment, innovation and entrepreneurship. At the same time, centralised bureaucratic regulatory burdens must be avoided.

The same applies to the European Commission’s proposal for a 28th legal regime known as “EU Inc.”, which seeks to establish a single harmonised set of corporate rules across the EU, designed to make it easier for companies, particularly startups and innovative firms, to register and operate across borders. Its design must support, not hinder, innovation and growth.

The shortage of talent is one of the companies’ greatest risks

Sweden has built a strong entrepreneurial culture, with a growing cohort of alumni from successful companies such as iZettle, Klarna and Spotify. But neither these companies, nor our large industrials or the next generation of growth companies can manage their skills supply without access to international talent. The fastest-growing Swedish AI companies are already highlighting the difficulty of attracting foreign top talent as one of their main business risks.^[19]

The government’s strict migration policy, with a raised wage floor and tightened rules for family reunification, is primarily aimed at low-wage occupations, but the consequences also reach highly educated workers. A growing number of foreign tech entrepreneurs are hesitating and asking themselves whether Sweden is the right destination. That is a risk we cannot afford to ignore.^[20]

In a turbulent global environment, institutional stability, predictability and capital market-friendly regulation are of strategic importance for Sweden. The Swedish capital market is dynamic, but there is still room for improvement. The objective should be for Sweden to remain as one of the world’s leading countries for innovation, company-building and growth. Sustaining a high level of dynamism in our capital market is key to achieving this.

Taxes and regulation influence not only when investors choose to act, but also when they choose not to. Sweden must continue to demonstrate a willingness to reform and a clear ambition to be an attractive country for company-building and investment. Upcoming political decisions should therefore carefully consider the importance of stable rules and a high degree of predictability for innovation and entrepreneurship. A well-functioning capital market is essential for the development of both Sweden’s and the EU’s competitiveness.

Harness the benefits of internationalisation…

As global attention increasingly turns to Sweden and our unique financial ecosystem, we have a strategic interest in ensuring that the outside world understands what has driven our success. Sweden must take a leading role in Europe, contributing to mobilising private capital and encouraging more European households to invest their savings. This includes sharing experiences around how private investment can be broadened. Investment savings accounts (ISKs) are already being highlighted as an important tool in this context. Poland, for example, is now introducing similar structures, a positive and welcome development.^[21]

At the same time, it is a balancing act. We must safeguard the factors that have created our strong position: openness, innovation capacity, and the pragmatic reforms and structures that support long-term saving. Our competitiveness must not be eroded by restrictive regulation or unnecessary bureaucracy.

…but avoid European centralisation

Large-scale EU-solutions do not suit all markets. Local flexibility is a prerequisite for an ecosystem like Sweden’s to continue to develop. We must ensure that competitiveness is not undermined by centralisation or proposals to establish a single European stock exchange in Frankfurt or Amsterdam. While the technological development we face will require access to large amounts of capital, a centralised EU exchange cannot resolve the region’s structural competitiveness challenges.

The fact that Verisure chose to list on Nasdaq Stockholm is a testament to the exchange’s international standing. That the listing was made in euros rather than Swedish kronor points to the opportunities offered by a more internationalised exchange, which leaves room for opportunity and further development.

A strategy for Stockholm as a financial centre

Sweden’s next export success should be its model for a capital market that combines both breadth and depth – a model that enables active institutional pension saving alongside broad and engaged household participation.

The role of households in the capital market should not be underestimated. We must therefore continue to encourage household saving in both funds and equities. The ISK, in combination with platforms such as Avanza and Nordnet, have democratised ownership and made financial assets accessible to a wide share of the population. At the same time, we must remain vigilant regarding how information is spread across these platforms’ various forums, to ensure that trust in our ecosystem is not eroded.

Everything that supports innovation, entrepreneurship and talent recruitment also strengthens the dynamics of the broader ecosystem of investors, entrepreneurs and capital market participants. It is an interconnected whole that requires long-term commitment and deliberate action.

How do we strengthen Stockholm as a financial hub?

Sweden and Stockholm now have a unique opportunity to consolidate our strategic position through increased internationalisation of the capital market. Stockholm has been a hub for innovation, entrepreneurship and capital formation ever since the industrialisation. What is now needed is a clearly defined vision of what we want Stockholm and Sweden to become.

To stay the course over the long term, a strategy for Stockholm as a financial centre should be centred around five key priorities:

• 1

  Increased internationalisation of the capital market

  The Swedish capital market must become more international and ensure that investors and companies continue to be drawn here. In line with the European Commission’s proposals under the framework of a Savings and Investments Union (SIU) barriers to capital flows between the Nordic and Baltic countries should be removed. This can be achieved by harmonising EU legal acts and national legislation, enabling further integration of securities settlement across countries, and allowing listings in additional currencies, such as US dollars or euros. This would make Sweden and Stockholm even more attractive as a listing venue and help secure our position as a leading capital market in the EU.

• 2

  Predictable and competitive regulatory frameworks

  Sweden’s future competitiveness will largely depend on how well we facilitate both founder-led companies and the capital market. A decisive factor is predictability and stability in regulation. Rules that strengthen credibility should be protected, while those that hinder development should be avoided.

• 3

  A service mandate for relevant authorities

  The Swedish Financial Supervisory Authority (Finansinspektionen), the Swedish Inspectorate of Strategic Products (ISP), the Swedish Tax Agency (Skatteverket) and other relevant authorities should be given a clear service-oriented mandate to promote innovation and entrepreneurship. Regular engagement with industry stakeholders for knowledge exchange should be a minimum requirement, alongside a strong understanding of how the capital market functions in relation to regulatory application.

• 4

  Access to international talent

  Greater internationalisation requires simple and predictable rules for labour migration. A restrictive migration policy risks limiting the ability of businesses to attract international talent, with processing times and requirements that, in practice, treat foreign entrepreneurs as an exception rather than strategic assets. The upcoming increase in the median salary requirement also risks disproportionately affecting early-stage entrepreneurs, where revenues are often reinvested in growth rather than taken out as salary. In an increasingly international business environment, Sweden must be a country where talents and entrepreneurs both want, and are able, to come.

• 5

  An aviation policy that strengthens competitiveness

  Sweden and Swedish business are internationally oriented and therefore depend on strong global connectivity, including air travel. Since 2019, Sweden has lost a third of its international flight connectivity. A forward-looking aviation policy is needed, one that prioritises accessibility while driving the sector’s green transition.

A possible vision would see Sweden as a new Switzerland, characterised by thriving companies, well-capitalised banks and a growing share of households engaged in active financial saving. Or, as the Swedish Prime Minister and the Minister for Finance put it in a joint op-ed: the goal must be for Sweden to become the richest country in the EU.^[22]

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