Income decreased on direct investment assets

Income on Swedish direct investment assets abroad decreased by SEK 33 billion in 2020 compared with 2019 and amounted to SEK 293 billion in total. The largest contribution came from the manufacturing industry, in which income fell from SEK 164 billion to SEK 147 billion. Income on foreign direct investment assets in Sweden decreased by SEK 22 billion in a corresponding comparison, and amounted to SEK 201 billion. The largest contribution to this downturn was also the manufacturing industry, which decreased from SEK 114 billion to SEK 97 billion.

Swedish direct investment assets abroad decreased slightly

Swedish direct investment assets abroad amounted to SEK 3 802 billion at the end of 2020. This is a decrease of SEK 23 billion compared with the end of 2019. Equity accounted for SEK 3 231 billion of total Swedish direct investment assets abroad, which was an increase of SEK 11 billion compared with the end of 2019. Net claims against foreign subsidiaries, fellow subsidiaries, and associated companies amounted to SEK 571 billion, a decrease of SEK 34 billion compared with 2019.

Sweden’s largest direct investment assets abroad are located primarily in the United States. There are also large Swedish direct investment assets in several European countries, in which the Netherlands, the United Kingdom and Norway are the main contributors. Swedish direct investment assets in the United States amounted to SEK 703 billion at the end of 2020, which is an increase of 22.8 percent compared with the end of 2019. Decreases in direct investment assets in the Netherlands, Denmark, and Finland had the largest impact in 2020. As in previous years, the largest assets abroad are held by Swedish enterprises manufacturing metal and mechanical products, and by enterprises operating in finance and insurance.

Among total direct investment assets abroad, SEK 110 billion was controlled by “special purpose entities” (SPEs). SPEs are enterprises that are ultimately controlled from abroad and, beyond owning assets and liabilities, have limited activities in Sweden. Reporting SPE data separately provides a useful measure of a country’s incoming and outgoing direct investments, by making it possible to exclude capital that only passes through a country on its way to other destinations.

Development of the Swedish krona

In 2020, the Swedish krona was strengthened by about 7.2 percent compared with other currencies, according to the KIX index. The Swedish krona was strengthened by about 3.8 percent against the euro, and also by about 12.1 percent against the US dollar. A strengthened Swedish krona contributed to a decrease in the value of direct investment assets and income abroad, expressed in Swedish kronor.

Foreign direct investment assets in Sweden increased

Foreign direct investment assets in Sweden increased by SEK 159 billion at the end of 2020 compared with 2019, and amounted to SEK 3 390 billion at the end of 2020. In 2020, equity increased by SEK 68 billion to SEK 2 861 billion in total. At the end of the year, net liabilities to foreign owner groups amounted to SEK 529 billion, up by SEK 91 billion compared with the previous year.

In terms of foreign direct investment assets in Sweden, Luxembourg has surpassed the Netherlands as the largest holder country. Luxembourg’s assets in Sweden amounted to SEK 486 billion at the end of 2020, while the Netherlands’ assets amounted to SEK 476 billion. The United States was the country that noted the largest increase, at SEK 170 billion, compared with the end of 2019. United States’ assets in Sweden amounted to SEK 399 billion at the end of 2020.

The largest foreign assets in Sweden are noted in the industries financial and insurance activities, manufacture of petroleum, chemical products, and rubber and plastic products. Enterprises operating in finance and insurance increased their assets most in Sweden in 2020. Among total direct investments in Sweden, investments in Swedish SPEs accounted for SEK 238 billion.

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. This information 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 on holiday homes. Income on direct investment is booked on the current account.