Income increased on direct investment assets

Income on Swedish direct investment assets abroad increased by SEK 102 billion in 2021 compared with 2020 and amounted to SEK 406 billion in total. The largest contribution came from companies manufacturing metal and mechanical products. Income on foreign direct investment assets in Sweden increased by SEK 38 billion in a corresponding comparison, and amounted to SEK 243 billion. The largest contributor to this increase was also companies operating in the manufacturing of metal and mechanical products.

Swedish direct investment assets abroad increased

Swedish direct investment assets abroad amounted to SEK 4 330 billion at the end of 2021. This is an increase of SEK 498 billion compared with the end of 2020. Equity accounted for SEK 3 866 billion of total Swedish direct investment assets abroad, which was an increase of 18,8 percent compared with the end of 2020. Net claims against foreign subsidiaries, fellow subsidiaries, and associated companies amounted to SEK 465 billion, a decrease of 19,6 percent compared with 2020.

Sweden’s largest direct investment assets abroad are located in the United States. There are also large Swedish direct investment assets in several European countries, such as the Netherlands, Norway and the United Kingdom. Swedish direct investment assets in the United States amounted to SEK 938 billion at the end of 2021, which is an increase of 35,0 percent compared with the end of 2020. The United Sates was the country where the Swedish direct investment assets increased most in 2021. Part of the increase could be explained by a weakened Swedish krona against the US dollar, which was approximately 10,4 percent. In 2021, assets decreased the most in Germany, which accounted for a decrease of SEK 90 billion. As in previous years, the largest assets abroad are held by Swedish companies manufacturing metal and mechanical products, and by companies operating in finance and insurance.

Among total direct investment assets abroad, SEK 113 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 2021, the Swedish krona was weakened by about 4,0 percent compared with other currencies, according to the KIX index. The Swedish krona was weakened by about 1,9 percent against the euro, and also by about 10,4 percent against the US dollar. A weakened Swedish krona contributes to increased asset value on Swedish direct investment abroad, expressed in Swedish kronor.

Foreign direct investment assets in Sweden increased

Foreign direct investment assets in Sweden increased by SEK 263 billion at the end of 2021 compared with 2020, and amounted to SEK 3 722 billion at the end of 2021. In 2021, equity increased by 11,4 percent to SEK 3 273 billion. At the end of the year, net liabilities to foreign owner groups amounted to SEK 449 billion, down by 14,0 percent compared with the end of the previous year.

In terms of foreign direct investment assets in Sweden, the United Kingdom has surpassed Luxemburg as the largest holder country. The United Kingdom’s assets in Sweden amounted to SEK 624 billion at the end of 2021 and Luxemburg’s assets amounted to SEK 539 billion. The United Kingdom’s assets increased by SEK 196 billion compared with the end of 2020 and this accounted for the largest increase.

The largest foreign assets in Sweden are noted in the industries financial and insurance activities, manufacture of petroleum, chemical products, rubber and plastic products. Companies operating in information and communication increased their assets most in Sweden in 2021. Among total direct investments in Sweden, investments in Swedish SPEs accounted for SEK 220 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 SCB’s 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 in the current account.