The hidden costs of Sweden’s migration system

As a knowledge-based economy, Stockholm and Sweden need to be able to attract and bring on board highly skilled individuals from abroad, especially outside the EU. The table below shows the proportion of accepted applications for highly skilled labour immigration (specifically pertaining to the standard work visa), which over the period from 2021–2025 was 51% on average. This reveals that on average just over half of Sweden’s labour immigration falls into the highly skilled category. If we are to keep this up and stay competitive, we need to address some key structural challenges that are impacting the system as it looks today.

To provide an overview of the state of today’s system, three different types of visas that specifically target non-EU citizens applying from outside of Sweden were investigated based on uptake, acceptance rates, and processing times. Firstly, the residence permit for self-employment (egenföretagare) which is the closest solution Sweden has to a startup or founder’s visa. This visa is aimed at those either planning to run their own company in Sweden, take over an existing Swedish company, or work as a sole proprietor. Key conditions include 51% ownership of the business, SEK 200,000 capital up front, plus an additional SEK 100,000 for a spouse and SEK 50,000 per child where applicable. Proof of a customer network in Sweden, and previous experience running a business are also necessary, alongside enough funds to sustain the proposed business. There is no exact amount listed for business funds, likely because this depends on the nature of the business and is evaluated during the application process.

The second visa investigated was one of three higher education visas which applies to those who are looking for work or to start their own business (söka arbete eller starta verksamhet) specifically coming from outside the EU. Introduced in 2022, this is a temporary and non-renewable residence permit that allows people with a completed university degree at a master’s level or higher to enter Sweden for a period of 3-9 months.

Lastly, we looked at the standard work visa (arbetstagare), for those that have received a job offer from a Swedish company to come work in Sweden.

Over the last six years 3,509 applications have been received for the residence permit for self-employment, 7,216 for the higher education visa, and 143,038 for the work visa. Since the peak of applications in 2022 there has been a steady decline with the total number of applications for all three visas decreasing by 51% between 2022 and 2025.

One possible answer to this sharp decline could be due to processing times. The average processing time over the last six years for the residence permit for self-employment comes in at 16 months, which, while shorter than the Migration Agency’s own prediction of 18-24 months, is a staggering amount of time. The higher education visa comes in at seven months of processing time, and the work visa averages four months.

The residence permit for self-employment processing time averaging 16 months sends a clear message to founders looking at Sweden as a potential option. Those with growing companies typically do not have this kind of time to wait for a decision. Industry data shows the average time from initial idea to Series A funding is approximately 2.5 years for successful startups, meaning this kind of wait consumes over half the critical window before a founder can really begin.⁸ To contextualise the problem even more, Sweden’s closest competitors across Europe were compiled to compare predicted, average processing times for equivalent startup visas. Across these 13 other countries (shown in Figure 2.4) the average processing time for a startup-visa was 2 months, 8 times faster than Sweden’s residence permit for self-employment at 16 months.

Lastly, we considered the acceptance rates for each type of visa we analysed, and again the results show a clear problem. In 2025, only 7% of applications for the residence permit for self-employment were accepted. For the highly educated visa 12% were accepted, and 57% for the work visa. 

In terms of the residence permit for self-employment, most rational founders would not wait 1.5 years for a visa with a 93% likelihood their application will be rejected. At the same time there is a 76% increase in applications in 2025, which could signal an increased interest in starting or leading a company in Sweden. This can be interpreted as a critical point in time where despite long process times and high rejection rates people still see the value in Sweden.

While the processing times are problematic, many of the conditions for the residence permit for self-employment also do not reflect how entrepreneurship works today. When it comes to ownership, founders often take on VC to grow their business into a viable company, thus giving up a stake. In addition, many share ownership with co-founders which can create even more division, making the requirement of 51% ownership an unrealistic demand. This, along with proof of an established network in Sweden and proof of sufficient funds, all add up to more conditions that exclude founders in early stages.

The competitive disadvantage

As shown in the previous section, Sweden’s current startup visa is neither competitive nor reflective of contemporary entrepreneurship today, both when it comes to its conditions and processing time. Of the 13 comparable countries in Figure 2.4, 11 offer a fast-track route specifically targeting startup founders and entrepreneurs. Two of those 11 stand out as potential models for Sweden to adopt, in the UK’s Innovator Founder visa and Denmark’s Startup Denmark scheme.

Inspiration abroad

The UK’s Innovator Founder visa (administered through Home Office–approved endorsing bodies) requires a new venture that meets three tests: it must address an identified gap in the market, be viable through a credible, realistic plan, and be scalable showing evidence of job creation and growth into national and international markets. Successful applicants receive a three-year permit and in addition must attend meetings with their endorsing body at the 12- and 24-month marks to demonstrate progress. The route is not necessarily easier; results must be delivered in order to continue, but it offers a transparent, fast path to getting started.

Startup Denmark is similar in spirit. To apply, you must have a business idea with demonstrable scalable growth potential, be a full or partial owner of the company, and play an active role in running it. As with the UK route, the process has two stages: first, an independent expert panel assesses the business plan (typically within six weeks); then, with an approved business plan, the applicant applies separately for a residence and work permit from the Danish Agency for International Recruitment and Integration (Styrelsen for International Rekruttering og Integration).

Several features distinguish these schemes from Sweden’s residence permit for self-employment:

• Focus on innovation

  Both the UK and Danish routes explicitly target new, innovative business ideas. Sweden’s system, while rooted in equal treatment, is arguably misdirected in not differentiating between business types. In practice, someone opening a restaurant, their own consultancy, or a retail shop are assessed in the same pool as someone building a scalable growth company.

• Independent endorsement

  Sweden does not offer endorsement by a qualified body that can vouch for an applicant’s track record or business concept. The UK and Denmark both rely on independent endorsing bodies or expert panels to assess business viability, making the criteria for a strong application far more transparent. In comparison, Sweden’s process is smoother administratively but offers little guidance on what constitutes a strong application, likely a key driver of its high rejection rate.

• Capital requirements

  Sweden requires roughly 11 times more capital upfront than the UK (SEK 200,000 versus SEK 17,800), before any additional costs for accompanying family. Sweden also requires significant industry and business experience alongside an established network of contacts and potential customers, neither of which is required by the UK or Denmark.

In short, while the UK visa has the most rigorous process, with ongoing accountability, it is fast and favours high-growth concepts, attracting ambitious founders. Denmark’s scheme on the other hand is the most transparent and allows co-founders to apply together. These kinds of targeted schemes start with a strong set of underlying requirements while also addressing the urgency of a founder’s time.

Transitions that are too short

In addition to the lack of a startup visa, the system for transitioning between visa categories also compounds the problem. Pathways between statuses do exist on paper, but they are short, conditional, and poorly connected to the long-term routes that matter. The friction this creates falls hardest on exactly the people Sweden should most want to retain.

The work-to-entrepreneurship track on one such grey area. Although the job-seeking permit nominally allows a graduate to ”explore the possibilities of starting a business,” founding one means being on the self-employment permit, a separate, first-time application carrying its own demanding conditions as detailed previously. Similarly, there is not always a straightforward progression from a work permit; for instance an employee who develops an idea and wants to build a company cannot simply move into a founder status, because no such bridge exists. Swedish do allow certain students and work-permit holders to apply for a new permit category from within Sweden. The policy problem is therefore not the complete absence of legal routes, but their conditions, predictability, processing times and practical continuity. The people with potential to become Stockholm’s next generation of founders, with local knowledge, networks, and credibility that make a venture likely to succeed and stay, therefore face a choice between abandoning the idea or leaving the country to pursue it elsewhere.

Taken together, these gaps describe a system that is leaking at both ends of the talent pipeline. It admits skilled people, allows them to accumulate exactly the experience and connections that make them valuable, and then provides no smooth route to convert that value into a long-term contribution for Sweden, whether as an employee progressing toward settlement or as a founder building a company. The transitions are not so much broken as poorly built to reach the other side.

The onboarding gap

If companies are successful at both attracting talent to Stockholm and getting their visa accepted, a third problem follows: getting the new arrival and their family genuinely established in Swedish society with a foundation solid enough that they stay. Attraction and admission are necessary but leave the job half done when retention is the next crucial hurdle decided in the first months on the ground. It is a make-or-break moment where Sweden risks losing talented people.

The core failure is the absence of structured relocation support. Sweden offers incoming international talent no single point of contact on arrival to streamline processes. Many companies offer support, but this is a unique perk to larger, often more international organisations that understand the difficulties of supporting foreign talent.

The one-stop shop option

Competing countries have managed to tackle some of these challenges with two strong examples in Denmark and the Netherlands. Denmark’s International Citizen Service notably co-locates all the relevant authorities in one place. This way a newcomer can complete the CPR (personal identity) number, tax card, health insurance card, and residence permit in a single sitting.

Operating in six cities, the services are free, and it extends beyond paperwork into career guidance, recognition of foreign professional qualifications, and in the Copenhagen region includes job programmes for the newcomer’s spouse.

The Netherlands runs the same style of programme at greater scale across eleven official expat centres where a single combined appointment settles both municipal registration and immigration formalities. The clear focus of this strategy is speed on the one document everything else depends on, the Dutch citizen service number, which is issued within about five working days through the centres, against up to thirty via the ordinary municipal route. Companies can also begin this procedure while the employee is still abroad, so the family completes several formalities in one visit.

No fast lane

Sweden offers incoming international talent no equivalent. In place of a coordinating institution there is a do-it-yourself model that in practice means assembling a personal identity number, a bank account, a BankID, school placements, and housing, each through a separate authority, on its own timeline, much of it in Swedish, with several steps locked in a sequencing problem where each prerequisite depends on the last. The personal number (personnummer) bottleneck is the clearest example. It gates the bank account and BankID yet has no fast lane of the kind Denmark and the Netherlands have deliberately built. A move that a competing city addresses in one guided appointment, Sweden leaves to the newcomer.

Support for spouses and partners is missing entirely, and this matters more than it first appears, simply because the trailing partner can be a strong predictor of whether a relocation succeeds. Foreign qualification recognition, language training, and job-seeking support for partners are not part of Sweden’s offer; competing countries provide them as standard. A senior hire whose partner cannot work, cannot requalify, and cannot find a foothold is a senior hire who leaves within two years, regardless of how good the job or the visa was.

The partner blind spot

Two frictions sit above all the others, raised repeatedly by Stockholm companies across every size and sector: housing and long-haul flight connectivity. On housing, the binding constraint is supply, not price. Affordability is real, around 60% of young people in Stockholm report difficulty finding affordable housing, but the deeper problem for an incoming professional is that suitable housing simply cannot be secured quickly through normal channels, regardless of budget. A relocating family with money to spend still cannot easily convert it into a place to live, and that is an attraction problem, not merely a cost-of-living one.

Long-haul connectivity tells a similar story from a different angle. Arlanda remains a capable European hub, but the intercontinental routes that matter most for recruiting senior talent and closing cross-border deals have thinned considerably. Arlanda has comparatively fewer direct links to the business centres global companies route through. Therefore, a candidate weighing Stockholm against London, Amsterdam, or Copenhagen will often find the practical question of how easily they can get home and back to headquarters, tilting against the city.

None of these gaps are impossible to close. Structured relocation support, partner integration, housing supply, and direct flights are all solved problems elsewhere; Sweden’s disadvantage is one of omission, not difficulty. A company can run a flawless recruitment process and clear a successful visa application and still watch the hire leave, because the city never gave the family a reason, or the realistic means to stay.