Executive Summary
Sweden stands out as one of Europe’s most dynamic and structurally sophisticated equity markets. With 909 listed companies, a total market capitalisation of approximately USD 1.3 trillion (equivalent to 194% of GDP), and four of the ten largest IPOs in Europe during 2025, Stockholm has firmly established itself as the continent’s leading destination by several measures.
The market’s strength is not accidental. It rests on three interlocking pillars. First, a distinctive governance architecture built on self-regulation through the Swedish Securities Council, the Stock Market Regulation Committee and the Corporate Governance Board – that enables commercially sensitive decisions on takeover and shareholder rights matters to be resolved within days, while accommodating entrepreneurial ownership through well-established dual-class share structures. Second, an exceptionally deep and engaged investor base, comprising large family-controlled investment companies, the major public pension buffer funds (AP2–4), and a retail savings culture reinforced by the investment savings account (ISK), through which over a third of Sweden’s adult population participates in the equity market. Third, a well-developed market infrastructure, including a regulated main market and one of Europe’s most active MTF ecosystems, centred on Nasdaq First North, that provides genuine access to public capital for growth companies at every stage.
Recent regulatory developments have further strengthened Stockholm’s position. The EU Listing Act simplifies prospectus requirements and ongoing disclosure obligations for listed companies, reducing the threshold for both IPOs and follow-on capital raisings. Euroclear Sweden’s reintroduction and simplification of CSD links opens the door to greater foreign issuer participation, removing a structural barrier that had been in place since 2021. The RTO (reverse takeover) market has meanwhile emerged as a material and increasingly institutionalised listing route, particularly on Swedish MTFs.
The market is not without challenges. Proxy advisory firms continue to apply governance standards calibrated to Anglo-American norms that are structurally misaligned with Swedish market practice. The Act on Screening of Foreign Direct Investments, despite a high approval rate, introduces process friction into time-sensitive equity market transactions. Net listings on First North turned negative across 2023–2025, and sustaining investor appetite and analyst coverage for many smaller companies remains an open structural question.
On balance, however, Sweden’s equity market enters a period of renewed momentum. IPO activity, subdued following the post-2021 cooling, has recovered strongly through 2025 and into 2026. For issuers, domestic or foreign, seeking a capital market partner with engaged shareholders, a credible governance framework and a regulatory environment shaped by and for market participants, Stockholm presents a proposition that is increasingly difficult to match elsewhere in Europe.
Introduction
Sweden’s position as Europe’s most active equity market is not a recent development, nor is it accidental. With the highest number of publicly listed companies in the EU and a total market capitalisation equivalent to 194% of GDP, Sweden stands significantly ahead of comparable European economies — and the gap is widening.
The scale and composition of Sweden’s institutional investor base is a defining feature of the market. The main public pension buffer funds (AP2–4) are significant long-term holders, while a network of large, domestically owned family investment companies including Investor, Kinnevik, Industrivärden and LE Lundbergföretagen who collectively hold approximately 10% of total Swedish market capitalisation, provide deep, engaged and patient domestic ownership. Retail participation is equally exceptional: unique investors representing over a third of Sweden’s adult population hold dedicated investment savings accounts (ISK), channelling household savings directly into the equity market.
The governance architecture underpinning the Swedish capital market is the product of deliberate structural choices made over many decades. The Swedish corporate governance model is built to a substantial degree on self-regulation rather than legislation. The Swedish Securities Council (Aktiemarknadsnämnden), the Stock Market Regulation Committee (Aktiemarknadens självregleringskommitté) and the Corporate Governance Board (Kollegiet för svensk bolagsstyrning), established through collaboration between the legislator and market participants, and carrying statutory mandates, set and interpret the rules governing listed companies with the flexibility and commercial sensibility of a practitioner-led body. This means that rulings on complex takeover, governance and shareholder rights matters can typically be obtained within days. The framework further accommodates entrepreneurial ownership through dual-class share structures, which have been permitted in Swedish law since the nineteenth century and are today used by companies representing approximately two-thirds of Swedish regulated market capitalisation.
Recent regulatory and market infrastructure developments have reinforced Stockholm’s appeal as a listing destination. The EU Listing Act has reduced the number of transactions requiring a full prospectus, lowering both the threshold and the cost of accessing public markets for IPOs and follow-on capital raisings alike. And for foreign issuers specifically, Euroclear Sweden has restored the CSD link mechanism, allowing international companies in certain countries to list directly on Swedish exchanges without the complexity and investor friction of depositary receipt structures.
For a foreign company seeking not merely a trading venue but a genuine long-term capital market partnership — one with engaged shareholders, credible governance standards and a regulatory environment built by market participants for market participants — Sweden presents a compelling proposition. On the specific dimensions that matter most to growth-oriented issuers such as retail investor participation, governance responsiveness, access to a functioning growth market ecosystem, and an institutional base with a tradition of long-term engagement, no other European market combines all four to the same degree.
Key Drivers
The numbers alone are striking. Sweden accounted for four of the ten largest IPOs in Europe during 2025 and more than half of all IPO capital raised on the continent in that year. More than half of retail investor savings are allocated to the stock market — twice the average in the euro area. These are not vanity metrics: they reflect a structurally embedded investment culture that generates sustained demand for equity, provides natural liquidity, and gives listed companies a shareholder base that is genuinely engaged with long-term value creation.
Sweden has also developed an unusually deep expertise in smaller growth companies. Domestic investors, both institutional and retail, have a long track record of backing early-stage and scaling businesses, particularly in technology and life sciences. That investor familiarity reduces the information premium that smaller companies often face in unfamiliar markets and means that a Swedish-listed SME is more likely to attract informed, engaged shareholders than it would be in a market where growth company investing is less culturally embedded.
The EU Listing Act has meaningfully lowered the cost and complexity of accessing Sweden’s public markets. Broader exemptions from the prospectus obligation reduce upfront preparation time and expense, while simplified ongoing disclosure rules mean that staying listed is less administratively burdensome than before. Because the rules are harmonised across the EU, every European market benefits from the same simplification — but that simplification is more valuable where the underlying market is already attractive. Sweden enters the post-Listing Act environment with a structural head start: deeper retail participation, faster governance decisions, and a more developed growth market infrastructure than most European peers. The rules lower the entry cost for every market; Sweden’s existing advantages determine which market issuers will choose.
For foreign issuers, a long-standing structural barrier has also been removed. Until recently, a company incorporated outside Sweden that wished to list on a Swedish exchange had to do so through Swedish depositary receipts — a parallel instrument that adds administrative complexity and can limit investor familiarity. Euroclear Sweden has recently restored and simplified the CSD link mechanism, allowing certain foreign issuers to connect their shares directly to Swedish market infrastructure. The practical effect is that Stockholm is now more straightforwardly accessible to international companies as a primary or secondary listing venue — a change that is likely to broaden the pool of issuers considering Sweden and increase inbound listing activity in the years ahead.
Although the rules for traditional listings are being simplified, the market for so-called reverse takeovers (RTOs) has become an increasingly relevant topic. Through an RTO, a previously unlisted company can gain access to the capital market as well as an existing investor base and the established infrastructure of an already listed entity, without an initial offering to the public. A mostly niche phenomenon in the early 2020s, RTOs have in recent years become an established concept in the Swedish SME markets. As an example, in the first half of 2023, out of 14 listings, only one was a traditional IPO, with at least nine being different variants of RTOs. As of the writing of this article, at least five RTOs are planned for 2026 on the Swedish marketplaces. While an RTO can be perceived as a short cut to the capital market, the company will still be subject to a listing review and an approval process (including the preparation of a prospectus or a company description) before an RTO can be completed.
Almost all RTOs have concerned SMEs listing on Swedish multilateral trading facilities (Spotlight Stock Market, Nordic Growth Market and Nasdaq First North). One notable transaction on Nasdaq Stockholm was the listing of Yubico through a merger with ACQ Bure, which is generally considered a type of RTO, but the merged company subsequently re-listed to Nasdaq First North as it was considered a more suitable trading venue for the post-merger company.
The divergence in approach between venues is instructive. Nasdaq Stockholm’s caution reflects the higher governance standards expected of main market issuers and the reputational considerations associated with a regulated exchange. The MTFs’ embrace of RTOs — including Spotlight’s creation of a dedicated RTO market segment — reflects a commercially pragmatic view that the structure, if properly governed, provides a legitimate and efficient route for private companies to access public capital. The deeper significance is that RTOs have become a structural feature of the Swedish growth market, not merely a temporary workaround. They expand the entry points into the listed environment, increase the diversity of pathways to public ownership, and keep the Swedish MTF ecosystem active during periods when traditional IPO conditions are less favourable.
Supporting this ecosystem is a commissioned research model that has developed significantly in Sweden over the past several years. Under this model, smaller listed companies can fund independent equity research directly, increasing their visibility among investors and improving secondary market liquidity — a meaningful structural advantage for companies that would otherwise receive little or no sell-side coverage. For its size, Sweden has an unusually active analyst community, and the commissioned research model has extended that coverage deeper into the SME segment than would be achievable under a purely bank-funded research model.
Taken together, these drivers point to a market that is not merely maintaining its position but actively extending it. A regulatory environment that is becoming structurally simpler, an MTF ecosystem that has industrialised the growth company listing process, and a commissioned research model that sustains coverage and liquidity — each reinforces the others, and each is a product of decades of deliberate market development.
The question for a company evaluating where to list is increasingly not whether Sweden is a credible option, but whether the alternatives can match what Sweden has assembled over several decades.
Sweden’s MTF ecosystem is a key competitive advantage that sets it apart from most European peers and a defining reason why the market works as well as it does for growth companies. At the end of 2025, 551 companies were listed across three MTF platforms representing 61% of all domestically listed companies.1 The three platforms are Nasdaq First North Growth Market, Nordic MTF (operated by Nordic Growth Market NGM) and Spotlight Stock Market, of which Nasdaq First North is by far the dominant venue and the primary entry point for growth-stage companies seeking public market access.
The practical difference between a regulated market listing and an MTF listing is material for a growth company assessing its options. On the regulated Nasdaq Stockholm main market, an issuer must undergo a thorough independent review by a listing auditor and a legal examination, satisfying stringent requirements before admission. On Nasdaq First North, the requirements are calibrated to the realities of earlier-stage companies. There is no listing auditor requirement. Instead, each company retains a Certified Adviser, a firm accredited by Nasdaq from a pool of corporate finance advisers and banks, whose role is to verify listing readiness and provide ongoing support on disclosure and market communications. Nasdaq First North targets a 20 business-day application review period. The result is a route to public capital that is faster, less costly and less resource-intensive than a main market listing — without requiring companies and investors to accept materially lower governance standards, since the takeover, directed issuance and related party transaction rules applicable on First North largely mirror those on the regulated market.
The Swedish MTF market is also a genuine pathway to the main market, not merely an endpoint. Since 2013, an average of 45% of new listings on Sweden’s regulated markets annually have originated from a company already listed on a domestic MTF.2 That graduation rate is not coincidental: because the governance framework with takeover rules, directed issuance standards, related party transaction requirements is substantially the same across both tiers, companies on First North are already familiar with the legal requirements and have had the opportunity to mature in the MTF environment and reach main market standards by the time they consider an upgrade. The transition, when it comes, is evolutionary rather than transformational.
Challenges
The Swedish equity market model is successful, but it does not operate without friction. Several structural, regulatory and commercial challenges must be acknowledged if the model is to remain competitive and continue to attract both domestic and international capital.
One practical challenge facing Swedish listed companies is the approach of major proxy advisory firms, in particular Institutional Shareholder Services (ISS) and Glass Lewis, whose voting recommendations often fail to account for the distinctive features of the Swedish corporate governance model.
Directed share issuances, authorised by the general meeting under a two-thirds or nine-tenths majority requirement and widely used in incentive programmes, are a routine and commercially important tool in Sweden. Yet proxy advisors routinely recommend voting against these structures when measured against their standard templates, producing a systematic disconnect between global proxy advisory guidelines and what is entirely standard and legally sound under Swedish market practice.
This creates friction in general meetings, undermines the effectiveness of Sweden’s shareholder-centric governance model when applied to internationally held companies, and can distort outcomes in contested situations (specifically when it comes to incentive programmes with a 9/10 majority requirement). Swedish market participants, regulators and listed companies have increasingly flagged this issue, but a durable solution requires either reform at the proxy advisory level or significantly better education of international investors about how the Swedish model operates.
Beyond the proxy advisor issue, the broader challenge is that certain structural features of the Swedish corporate governance model are seen as unfamiliar or problematic by international investors accustomed to different governance frameworks. This can act as a deterrent for larger international companies considering a Swedish listing and means that larger Swedish companies seeking a broad global investor base sometimes find deeper or more globally integrated markets to be a better fit.
Another structural challenge that has attracted increasing attention is the declining turnover ratio on Swedish exchanges. The ratio on Nasdaq Stockholm fell from over 60% in 2014 to 41% in 2024, before recovering to 45% in 2025 — placing Sweden second among European peer countries. Sweden’s market capitalisation-weighted free float stands at 76%, in the middle range among peer countries. This is partly explained by the concentrated ownership stakes held by large family-controlled investment companies; however, it should be noted that such holdings often take the form of A-shares carrying higher voting rights, which does not affect the free float as significantly as concentrated holdings in a single-class share structure would. Wider market fragmentation and the growth of off-exchange trading also contribute to the picture.
First North’s role in the Swedish growth ecosystem has also come under pressure in recent years. Net listings turned negative through 2023–2025, for a combined net loss of 51 companies across First North and 66 across all Swedish MTFs. Many smaller listed companies particularly in capital-intensive sectors such as life sciences, pharmaceuticals and clean technology, have found it difficult to raise follow-on capital in the more cautious market environment that followed the post-2021 cooling. Sustaining investor appetite and sufficient analyst coverage for many small, listed companies remain an open structural challenge, and one without an obvious near-term resolution.
A further challenge deserving mention is the pressure being placed on Sweden’s successful model of self-regulation, as European legislation increasingly enters areas historically governed by Swedish self-regulatory bodies, leaving less room for Swedish market norms. In practice, this means that certain governance arrangements widely accepted in Sweden — relating to shareholder rights, board composition, remuneration reporting and related party transactions — must increasingly be reviewed against mandatory EU frameworks that were designed with other market structures in mind. The challenge for Sweden is to find ways to preserve the philosophy and practical benefits of self-regulation within new European frameworks, adapting rather than abandoning a model that has served the market exceptionally well.
A further friction point is Sweden’s Act on Screening of Foreign Direct Investments, which entered into force in December 2023 and has generated a volume of filings strikingly disproportionate to comparable European jurisdictions. In 2024, its first full year of operation, Sweden received 1,261 screening applications which is nearly six times the average among Belgium, Finland, France, Germany, the Netherlands and Spain combined. The commercial problem is not the approval rate, which stands at 97%, but the process itself: screening timelines introduce material delays into transactions that were previously standard, including secondary public offerings and intra-group restructurings that are time-sensitive by nature. The Swedish government’s Implementation Council and the OECD have both recommended a review with a view to recalibrating the Act’s scope, and reform in this area would have a direct positive effect on equity market efficiency.
Outlook: What Comes Next?
Sweden’s capital market enters the second half of the 2020s from a position of renewed strength. After a period of subdued activity following the post-2021 cooling all driven by rising interest rates, geopolitical uncertainty and a more cautious risk appetite among investors, IPO activity recovered strongly through 2025 and has continued into 2026, with several transactions already completed and a healthy pipeline in preparation. The structural conditions that drove that recovery; regulatory simplification, restored CSD access, a maturing RTO market and a functioning takeover pipeline on the MTFs, are durable. The question is not whether Sweden’s market will remain active, but how much further its competitive position extends as the new frameworks bed in.
The EU Listing Act has already reduced the administrative case against listing at both ends of the lifecycle — for companies considering an IPO and for those already listed seeking to raise follow-on capital. The cumulative effect, disproportionately significant for smaller companies, is now bedding in.
For foreign issuers, the restored Euroclear CSD link mechanism has removed the most significant structural barrier to a Swedish listing, and inbound interest is expected to grow as awareness of the change spreads.
The one area where further regulatory reform would have an immediate positive effect is the Act on Screening of Foreign Direct Investments. A recalibration of its scope — preserving its national security function while removing standard equity market transactions from its reach — remains the single most actionable improvement available to policymakers.
The recovery in primary market activity has been accompanied by a significant uptick in takeover activity, particularly on the MTF markets, where the post-boom consolidation of the 2020–2021 vintage of listings has generated a steady pipeline of public M&A transactions. This dynamic is itself a marker of market maturity: a functioning takeover market is evidence that equity capital raised through Swedish platforms is being put to work, and that the markets can efficiently reallocate ownership when circumstances change.
Conclusion
Sweden’s equity market occupies a genuinely distinctive position in Europe. The combination of governance sophistication, investor depth, market infrastructure and a savings culture that channels retail capital into equities has produced a market that is, by several measures, the most active on the continent. That position is the result not of historical accidents but of deliberate and sustained investment by legislators, regulators, and market participants in a model of principled self-regulation and entrepreneurial ownership.
The regulatory environment is evolving in directions broadly favourable to continued growth. The EU Listing Act lowers the cost and complexity of accessing public markets. Euroclear’s restored CSD link infrastructure creates a credible route for certain foreign issuers to tap Swedish investors without the friction of depositary receipt structures. A potential recalibration of the Act on Screening of Foreign Direct Investments, if it materialises, would further reduce process friction in equity market transactions.
The challenges are real and should not be understated. Misalignment between international proxy advisory standards and Swedish governance norms remains a structural tension without a near-term resolution. The pressures on the First North ecosystem – falling net listings, funding difficulties in capital-intensive sectors, and the growth of off-exchange trading — require attention if Sweden’s strength as an entry point for growth companies is to be maintained. And the creeping expansion of mandatory EU frameworks into areas historically governed by Swedish self-regulatory bodies demands careful navigation.
Yet the market’s trajectory is one of resilience and renewal. Sweden’s fundamental proposition, a market built by practitioners, for practitioners, with long-term engaged shareholders and a governance framework flexible enough to accommodate entrepreneurial ambition, remains compelling. For companies seeking not merely a trading venue but a genuine capital market partnership, Stockholm continues to offer, in many respects, the most attractive environment in Europe.