The rise of Sweden's ultra-rich

Sweden is known worldwide for championing high taxes and social equality, and has become a hotspot for Europe's super-rich.

Lidinge Island is home to huge red and yellow wooden villas perched on rocky cliffs and white minimalist mansions with floor-to-ceiling windows.

This district, less than 30 minutes' drive from Stockholm city center, is one of Sweden's wealthiest districts.

Serial entrepreneur Konrad Bergström flips a light switch in his wine cellar to reveal the 3,000 bottles stored there. “Bordeaux, France, that's what I love,” he says with a bright, white smile.

Other facilities include an outdoor pool, a gym upholstered in reindeer skin, and a nightclub with a workshop complete with large metal urinals.

“I have a lot of musical friends, so I play music a lot,” Bergstrom explains. He makes money by co-founding businesses such as headphone and speaker companies, and this house is one of his four properties he owns in Sweden and Spain.

This is not a surprising lifestyle for a successful entrepreneur, but what may surprise world observers is how many people in Sweden, a country world-famous for its left-wing politics, Has he become as wealthy as Mr. Strom, or even richer?

Although a right-wing coalition is currently in power, the country has been run by social democratic-led governments for most of the last century, and these governments have grown the economy in a fair way, using taxes to provide strong welfare support. They have been elected on the basis of a pledge to provide funds to the state.

But Sweden has experienced a boom in the ultra-wealthy over the past 30 years.

In 1996, only 28 people had a net worth of more than 1 billion kronor (about $91 million or £73 million at current exchange rates), according to an extensive list published by the former Swedish business magazine Veckans Affärer. Ta. Most of them came from wealthy families.

According to a similar analysis by the daily newspaper Aftonbladet, by 2021 there will be 542 “krona billionaires”, representing 70% of gross domestic product (GDP), which measures the total amount of goods and services in an economy. He is said to have had a wealth of money. .

Sweden, with a population of just 10 million, also has one of the highest per capita rates of $1 millionaires in the world. Forbes magazine has listed 43 Swedes with a fortune of more than $1 billion on its 2024 list of richest people.

This equates to about 4 in 1 million people, compared to about 2 in 1 million in the United States (the country with the most billionaires at 813, but with a population of more than 342 million).

“This happened in a sort of covert way. I didn't really notice it until after it had happened,” said the author, a journalist from Aftonbladet who investigates stable issues. says Andreas Cervenka, author of the book Greedy Sweden. The rise of Sweden's super-rich.

“But in Stockholm, you can see that wealth for yourself and see the contrast between the super rich in some parts of Stockholm and the very poor in others.”

One of the reasons for the rise of the new super-rich is Sweden's thriving technology industry. The country has a reputation as Europe's Silicon Valley, and over the past 20 years it has produced more than 40 so-called unicorn startups, companies with a value of more than $1 billion.

Skype and Spotify were founded here, as were gaming companies King and Mojang. Recent global success stories include financial tech startup Tink, which was acquired by Visa for about $2 billion during the pandemic, healthcare company Kry, and electric scooter company Voi.

At Epicenter, a shared office and community space with a huge glass atrium, veteran entrepreneur Ola Ahlvarsson traces this success back to the 1990s. He said Sweden's tax rebate on home computers “got us all wired or connected much faster than in other countries.”

A serial co-founder himself, he points out that there is a strong “culture of collaboration” in the startup world, with seasoned entrepreneurs often becoming role models and investors in the next generation of tech companies. There is.

Due to its large size, Sweden is also a popular test market. “If you want to see if it works in a larger market, you can try it here at limited cost and without significant risk to your brand or stock price,” says Ahlvarsson. .

But Cervenka insists there is another story that deserves more attention. It's the monetary policies he says have helped turn the country into a paradise for the super-rich.

Sweden had very low interest rates from the early 2010s until a few years ago. As a result, it has become cheaper to borrow money, so Swedes with cash to spare often opt for high-risk investments such as real estate and high-tech start-ups, resulting in the value of many of them soaring.

“One of the big reasons for this huge increase in billionaires is that there has been quite a lot of inflation in asset values ​​over the years,” Cervenka said.

Sweden's high earners are taxed on more than 50% of their personal income, one of the highest rates in Europe, but successive governments on both the right and the left have taxed some taxes in ways that favor the wealthy. He claims that he has been making adjustments.

The country abolished wealth and inheritance taxes in the 2000s, and taxes on money earned from stocks and dividends to shareholders are much lower than taxes on salaries. Corporate tax rates have also fallen from around 30% in the 1990s to around 20%, slightly lower than the European average.

“If you're a millionaire now, you don't have to move from Sweden. And in fact, some billionaires are moving here,” Cervenka says.

Back on Lidinge, Konrad Bergström agrees that Sweden has a “very favorable tax system when setting up a company.” But he says his wealth has had a positive impact because his business and home provide employment for others.

“We have nannies, we have gardeners, we have cleaners… and that creates more work. So we should not forget how we structure our society.”

Bergström points out that wealthy Swedish entrepreneurs and venture capitalists are also increasingly reinvesting their money in so-called “impact” startups focused on improving society and the environment.

In 2023, 74% of venture capital funding for Swedish startups went to impact companies. This is the highest percentage in the EU and well above the European average of 35%, according to figures from Dealroom, which maps data on start-ups.

Perhaps the country's hottest impact investor is Niklas Adelberth, co-founder of unicorn payments platform Klarna. In 2017, he used his $130 million fortune to launch the Norsken Foundation, an organization that supports and invests in impactful companies.

“I don't have billionaire habits in terms of owning yachts or private jets or anything like that,” Adelberth says. “This is my recipe for happiness.”

But some argue that Sweden lacks a nuanced public discussion of billionaire wealth that goes beyond the good-bad dichotomy of how entrepreneurs use their wealth.

A recent study from Orebro University concluded that the media image of Swedish billionaires is mainly positive, and that their fortunes are rarely explained in the context of changes in the country's economic policy. suggested.

“As long as the ultra-rich are seen as embodying the ideals of the neoliberal era, such as hard work, risk-taking, and entrepreneurship, the underlying inequality does not matter,'' says media researcher Axel Wik. Strom says.

Cervenka added that the debate about taxing the ultra-wealthy is not as prominent in Sweden as it is in many other Western countries, such as the United States.

“It's a kind of contradiction. Given the background of our country, which is recognized as a socialist country, one would think that this is a top priority,” says the author. “I think it has something to do with that. [the fact] We have a “winner takes all” mindset.

“So if you play your cards right, you can become a millionaire…And I think this is a pretty significant change in the Swede's psyche.”

Sweden's richest people list also reveals that despite the country's large immigrant population and decades of policies championing gender equality, much of the country's wealth remains concentrated in the hands of white men. There is.

“Sure, it's a place where people can make new money and create new wealth, but it's still very closed and there's very much double standards in terms of who funds your ideas. “It's very expensive,” says Laura Akinmade, a Nigerian-Swedish novelist and entrepreneur. “Sweden is a great country that is a leader in many ways, but many people are still excluded from the system.”