The rise of Sweden’s super rich

Sweden has a global reputation for championing high taxes and social equality, but it has become a European hotspot for the super-rich.

On the island of Lidingö there are huge red and yellow wooden villas on top of rocky cliffs and white minimalist mansions with floor-to-ceiling windows.

Less than half an hour’s drive from Stockholm city center, this is one of Sweden’s wealthiest neighborhoods.

Serial entrepreneur Konrad Bergström turns on the light switch in his cellar to reveal the 3,000 bottles he has stored there. “French Bordeaux, that’s what I love,” he says, flashing a bright white smile.

Elsewhere, there’s an outdoor pool, a reindeer-hide-covered gym, and a nightclub-turned-workshop, complete with a large metal urinal.

“I have a lot of musical friends, so we play a lot of music,” explains Bergström. He made his money by co-founding companies, including a headphone and speaker company, and this house is one of four properties he owns in Sweden and Spain.

It’s not a surprising lifestyle for a successful businessman, but what might surprise global observers is how many people have become as rich as Bergström – or even richer – in Sweden – a country with a global reputation for its left-wing politics. .

Although a right-wing coalition is currently in power, the nation has been governed by Social Democrat-led governments for most of the last century, elected on promises to grow the economy in an equitable way, with taxes financing a strong welfare state.

But Sweden has seen a boom in the super-rich over the past three decades.

In 1996, there were just 28 people with a net worth of a billion crowns or more (about $91 million or £73 million at today’s exchange rate), according to a rich list published by the former business magazine Swedish Veckans Affärer. Most of them came from wealthy families for generations.

In 2021, there were 542 “crown billionaires,” according to a similar analysis by the daily newspaper Aftonbladet, and among them they possessed wealth equivalent to 70% of the country’s GDP, a measure of the total value of goods and services in the economy. .

Sweden – with a population of just 10 million – also has one of the world’s highest proportions of “dollar billionaires” per capita. Forbes has listed 43 Swedes worth $1 billion or more on its 2024 Rich List.

This equates to about four per million people, compared to about two per million in the US (which has 813 billionaires – the most of any nation – but is home to more than 342 million people).

“This happened in a stealthy way – so that you didn’t really notice until after it happened,” says Andreas Cervenka, a journalist at Aftonbladet and author of the book Greedy Sweden, in which he explores the steady rise of Sweden’s super-rich.

“But in Stockholm, you can see the wealth with your own eyes and the contrast between super-rich people in some areas of Stockholm and quite poor people in other parts.”

One of the reasons for the rise of the new super-rich is Sweden’s thriving tech scene. The country has a reputation as Europe’s Silicon Valley, having produced more than 40 so-called unicorn startups – companies valued at more than a billion dollars – over the past two decades.

Skype and Spotify were founded here, as were gaming companies King and Mojang. More recent global success stories include financial technology start-up Tink, which Visa acquired for around $2 billion during the pandemic, healthcare company Kry and electric scooter company Voi.

At Epicenter — a shared office and community space with a giant glass atrium — veteran entrepreneur Ola Ahlvarsson traces this success back to the 1990s. He says a tax break on home computers in Sweden “connected us all much faster than In other countries”.

A serial co-founder himself, he also points to a strong “culture of collaboration” in the start-up scene, with talented entrepreneurs often becoming role models for – and investors in – the next generation of tech companies.

Sweden’s size also makes it a popular test market. “If you want to see if it works in a larger market, you can – at a limited cost and without much risk to your brand or your share price – try things out here,” says Ahlvarsson.

But Cervenka argues that there is another narrative that deserves more attention – the monetary policies that he says have helped transform the country into a paradise for the super-rich.

Sweden had very low interest rates from the early 2010s until a few years ago. This made it cheap to borrow money, so Swedes with money to spare often chose to invest in property or high-risk investments such as technology start-ups, many of which increased in value as a result.

“One of the big factors that has driven this huge increase in billionaires is that we have had, for several years, quite strong inflation in asset values,” says Cervenka.

Although top earners in Sweden are taxed at more than 50% of their personal income – one of the highest rates in Europe – he argues that successive governments – on the right and left – have adjusted some taxes in a way that favors the rich.

The country eliminated wealth and inheritance taxes in the 2000s, and tax rates on money made from stocks and payments to corporate shareholders are much lower than taxes on salaries. The corporate tax rate has also fallen from around 30% in the 1990s to around 20% – slightly lower than the European average.

“You don’t need to leave Sweden if you are a billionaire today. And actually, some billionaires are moving here,” says Cervenka.

Back on the island of Lidingö, Konrad Bergström agrees that Sweden has “a very favorable tax system if we are building companies”. However, he says his wealth has a positive impact because his businesses – and homes – provide employment for others.

“We have a nanny, a gardener and a cleaner… and that also provides more jobs. So we shouldn’t forget how we are building society.”

Bergström points out that wealthy Swedish entrepreneurs and venture capitalists are also increasingly reinvesting their money in so-called “impact” start-ups, which focus on improving society or the environment.

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

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

“I don’t have the habits of a billionaire in terms of having a yacht or a private jet or anything like that,” Adelberth says. “This is my recipe for happiness.”

But others argue that Sweden is missing out on a nuanced public debate about multimillion-dollar wealth, as well as a good-evil dichotomy about how businesspeople are spending their fortunes.

Recent research from Örebro University concluded that the media image of Swedish billionaires is predominantly positive and suggested that their fortunes are rarely explained in the context of changes in the country’s economic policies.

“As long as the super-rich are seen as embodying the ideals of the neoliberal era, such as hard work, risk-taking and an entrepreneurial attitude, the inequality behind this will not be questioned,” says media researcher Axel Vikström.

Cervenka adds that debates about taxing the super-rich are not as pronounced in Sweden as they are in many other Western countries, such as the US.

“This is something of a paradox. One would think that with our background – being perceived as a socialist country – this would be the most important thing,” says the author. “I think it has to do with [the fact] that we have become more of a “winner takes all” mentality.

“That if you play your cards right, you can also become a billionaire… And that’s a pretty significant change, I think, in the Swedish mentality.”

Sweden’s rich list also reveals that the country’s wealth remains largely concentrated in the hands of white men, despite the country’s large immigrant population and decades of policies that defend gender equality.

“Yes, it’s where people can create new money, create new wealth, but it’s still very closed and the double standards are quite high in terms of who gets funded for their ideas,” says Lola Akinmade, a Nigerian-Swedish novelist and entrepreneur. . “Sweden is an incredible country that is a leader in many ways, but there are still many people excluded from the system.”