Trade unlisted shares

Unlisted shares are ownership stakes in companies that are not listed on a public stock exchange, such as the Stockholm Stock Exchange, Nasdaq or other regulated marketplaces. Instead, they are traded through brokers such as Eqvor. Unlisted shares can be of interest if you want to diversify your portfolio while having the chance of higher returns and the opportunity to join a company’s journey at an early stage.

Through our platform you can buy and sell unlisted shares in new and growing companies that are not yet listed on the stock exchange. We offer a convenient overview with real-time prices and price history, which gives you a clear basis for your decisions. Unlisted shares range from smaller growth companies and startups to larger, internationally known companies such as Klarna.

A company being unlisted does not mean that its shares are less safe or of lower quality than if the company were listed on a stock exchange. On the contrary, many companies today choose to remain unlisted for various reasons. A stock exchange listing can involve significant costs for marketing, auditing and fees to exchanges and banks, among other things. A listing also brings certain risks, such as hostile takeovers and lost business confidentiality, because the company has to make its plans and strategies public. That is information competitors could potentially exploit.

Another reason is that it has become much easier to raise money in the private market, and that listed companies need to focus on growth every quarter, while an unlisted company can focus on its long-term strategy. For these reasons many choose to keep their companies unlisted, but neither the quality nor the safety of the shares changes.

Buying unlisted shares has many advantages. Here we describe some of them.

Remember, though, that past returns do not guarantee future returns, and that you should never invest money you cannot afford to lose.

More stable share prices

In general, unlisted shares tend to hold a more stable value over time. This is because unlisted shares are often traded less frequently and are therefore less affected by the news and market movements that can cause large swings on the major stock exchanges.

Greater return potential

One of the biggest advantages of investing in unlisted shares is that it gives you the opportunity to buy in early, often long before a company is listed on the stock exchange. As an investor, you get the chance to take part in the company’s growth journey from an early stage, and often at a lower valuation. In other words, you get investment opportunities that are not yet open to the broader market and where the return potential can be greater.

You diversify your investment portfolio

Investing in unlisted shares is an effective way to broaden your portfolio. By complementing investments in, for example, funds and listed shares with unlisted holdings, you create a more diversified exposure. This type of investment is particularly common among investors and companies with larger amounts of capital who are looking for opportunities with higher return potential.

Buying unlisted shares also has some disadvantages. Here we describe them.

You take a higher risk

Unlisted companies are often at an earlier stage of their development than listed companies. They may be startups or growth companies that have not yet become profitable, have a limited track record or lack a fully established business model. An investment in unlisted companies can therefore mean a greater risk for you as an investor. So do read our article if you would like tips on how to invest in startups.

Lower liquidity

Unlisted shares have lower liquidity than shares in listed companies. This means it is often harder to buy or sell when you want to, because they are traded within a more limited circle and not on an open stock exchange. As an investor, then, you cannot count on selling your shares whenever you like, as you can with shares in listed companies.

Limited information

One of the major drawbacks of unlisted companies is that access to information can be considerably more limited. One reason is that unlisted companies are not subject to the same legal requirements to release information to the public as listed companies. Some companies nevertheless choose to share information voluntarily to keep their investors informed and satisfied, but that is not always the case.

If the company you own shares in is connected to Euroclear, you can hold the shares in a kapitalförsäkring (a Swedish endowment insurance account) or an ordinary custody account, but not in an investment savings account (ISK, a Swedish account type). Euroclear is a central securities depository that digitises the company’s share register and makes it possible for investors to hold the shares in an ordinary custody account. The company then also does not need to spend time updating the share register manually.

If you invest in unlisted shares through a company, such as a holding company, it is common to hold the shares in a custody account. If you invest as a private individual, some choose to hold the shares in a kapitalförsäkring so that they do not pay tax on gains and instead pay a flat-rate standard tax each year.

If you buy and sell unlisted shares through us at Eqvor, we make sure everything is handled correctly, such as the shares being transferred to the right custody account or the management updating the share register correctly.

The Swedish tax rules for unlisted shares vary depending on whether the shares are owned privately or through a company, and special rules also apply to how dividends are taxed. Here we give an overview of the most important tax rules that apply to unlisted shares in Sweden.

Tax rules for private individuals

Private individuals are taxed at 25% on the gain from both dividends and sales of unlisted shares. One way to reduce the tax is to invest in unlisted shares through a kapitalförsäkring.

When you hold unlisted shares in a kapitalförsäkring, you do not pay tax on gains from dividends or sales. Instead, you pay an annual flat-rate standard tax, which is usually around 1%. The insurance company that provides the policy may, however, charge fees on top.

To hold unlisted shares in a kapitalförsäkring, the shares must be non-qualifying (okvalificerade). Your shares are non-qualifying if:

• You are a passive shareholder who is not involved in the company’s business.
• You are not closely related to anyone who is involved in the company’s business.
• You have not been active in the company for more than 5 years, if you were ever involved in it.

Tax rules for companies

For companies, both dividends and gains on shares are tax-free as long as the money stays within the company. There is therefore usually no need to hold shares in a kapitalförsäkring when they are owned by a company.

Instead, the company pays corporation tax on the total profit from its business, including any return on shareholdings. When the profit is later taken out of the company, for example as salary or dividends, it is taxed under the ordinary tax rules for that form of withdrawal.

The information is general in nature and should not be regarded as personal tax advice. Before you decide how to manage or hold unlisted shares, you should always consult a qualified adviser, as the rules can differ depending on your situation.

There are two common ways to sell unlisted shares. The first is to get in touch with the company’s management and ask either whether they are interested in buying the shares themselves, or whether they know of anyone else who might be interested in buying.

Another way is to go through us, Eqvor. We usually find a good counterparty for your order thanks to our large network of investors. First and foremost, we recommend that you create an account on our platform. There you can put your shares up for sale, and you can do this even for companies we do not trade today. We review the company you want to sell and get back to you with questions and a proposal. You are also welcome to email us at info@eqvor.com, and we will help you find a buyer for your unlisted shares.

The easiest way to invest in unlisted companies is to contact a broker that specialises in trading unlisted shares, as we do at Eqvor. With us you can also place an order simply and digitally, directly on the site, provided you have created an account with us. We can also help with any new share issues.

Another option is to contact people who are selling the share you want to invest in yourself, but this can be difficult if you have limited time or a limited network.