What is direct investment?

A direct investment arises when someone, usually a company, directly or indirectly controls 10 percent or more of the number of votes in a company or commercial property located in another country. The annual direct investment survey measures assets such as total equity, financial claims and liabilities within a direct investment relationship, and directly-owned commercial property.  Information on direct investments published in the Statistical Database includes holiday homes and internal trade credits, and is also included in the international investment position, which shows Sweden’s assets and liabilities in relation to other countries. 

Income on direct investment is calculated as profit/loss after financial items, adjusted for write-downs (net, including credit losses), capital gains/losses and taxes. Total income, published in the Statistical Database, also includes interest income and costs on direct investment loans, and income from holiday homes. Income on direct investment is booked on the current account.

Swedish direct investment assets abroad increased

Swedish direct investment assets abroad increased by SEK 275 billion compared with 2017 and amounted to SEK 3 432 billion at the year-end 2018. Total Swedish direct investment assets abroad in the form of equity accounted for SEK 2 941 billion, which was an upturn of SEK 136 billion. Net claims against foreign subsidiaries, fellow subsidiaries, and associated companies amounted to SEK 492 billion, an increase of SEK 140 billion compared with 2017. Sweden’s largest direct investment assets abroad are in the United States, the Netherlands and Norway. Swedish direct investment assets in Luxembourg dropped by SEK 11 billion, which was the largest decrease for a single country. Assets increased the most in the United States, which accounted for an increase of SEK 113 billion. As in previous years, the largest assets abroad are held by Swedish companies operating in finance and insurance, and by companies manufacturing metal and mechanical products.

Development of the Swedish krona

In 2018, the Swedish krona was weakened by about 5 percent compared with other currencies, according to the trade-weighted TCW index.  The Swedish krona was weakened by about 4 percent compared to the euro, and was also weakened by about 9 percent compared to the US dollar. The weakened krona contributes to increased asset value and income on Swedish direct investment abroad.

Foreign direct investment assets in Sweden increased

Foreign direct investment assets in Sweden increased by SEK 61 billion compared with 2017 and amounted to SEK 3 079 billion at year-end 2018. At the end of the year, net liabilities to foreign owner groups had decreased by SEK 10 billion compared with a year ago and amounted to SEK 469 billion. In 2018, equity increased by SEK 71 billion and amounted to SEK 2 610 billion in total.

The Netherlands remains the largest holder of foreign direct investment assets in Sweden, followed by the United Kingdom and Luxembourg. The largest foreign direct investment assets in Sweden are in the industries financial and insurance activities, manufacture of petroleum, chemical products, and rubber and plastic goods.

Income increased on Swedish direct investment assets abroad

Income on Swedish direct investment assets abroad increased by SEK 23 billion compared with 2017 and amounted to SEK 286 billion in total. Income on foreign direct investment assets in Sweden increased by SEK 20 billion in a corresponding comparison, and amounted to SEK 209 billion.