jurisdiction

1. Are members of the armed forces permitted to hold shareholdings in private companies, including startups, provided that they do not participate in management?

We are not aware of any general Swedish rule that prohibits members of the Swedish Armed Forces from holding a passive minority shareholding in a private company, including a startup, solely because they are military personnel.

Instead, the relevant legal framework is based on the rules applicable to public-sector employees regarding outside activities and conflicts of interest. Members of the Swedish Armed Forces are state employees and the Swedish Public Employment Act regulates secondary occupations and outside activities. The key consideration is not share ownership itself but whether the interest could undermine confidence in the employee's impartiality, interfere with official duties or otherwise be incompatible with public employment.

A passive minority shareholding will generally be viewed differently from holding a management position, actively working for the company or carrying out a second occupation alongside military service. However, a different assessment may apply where the company operates in the defence sector, supplies or seeks to supply the Swedish Armed Forces, participates in defence procurement, handles sensitive or classified technology or otherwise creates an overlap between official duties and private financial interests.

2. Is notification or approval required before acquiring a shareholding or establishing a company?

Swedish law does not generally require prior approval before acquiring shares. Instead, employers have oversight mechanisms in relation to employees' outside activities. Employees may be required to provide information about such activities upon request and employers may require employees to cease activities that are considered incompatible with their role.

In practice, individuals in sensitive positions or those investing in defence-related businesses should consider disclosing the investment and seeking guidance in advance, even where the shareholding is intended to remain passive.

3. Are there any notable limitations, thresholds or conflict-of-interest rules?

Swedish law does not impose a blanket prohibition on passive minority ownership by military personnel. The main considerations relate to conflicts of interest, impartiality, security requirements and the individual's official duties. These issues are assessed on a case-by-case basis.