Data center tax haven – in Sweden?!

Wednesday, December 21 2016


Tax havens normally come with golden beaches, warm climates and drinks served in coconuts. Well now you don’t have to put up with any of that. After extensive review, the Swedish government has decided to cut the energy tax for data centers to 0.5 öre per kilowatt-hour – that’s about a tenth of a cent.

Of course it’s not a tax haven in the traditional sense – this is Sweden after all. But it is very smart policy. Sweden has long been seen as a great place to build a data center. State-of-the-art fiber infrastructure connecting locations on the edge of the Arctic Circle. Technological expertise forged in some of the world’s most mature and demanding markets. Almost no seismic activity. And all-green power production. This move adds a significant financial incentive to that list.

Facebook saw the benefits of Sweden a few years ago, and chose us to connect them. However, with the exception of a few small yet important data centers, there have been no major establishments since. But the virtual removal of this tax, combined with already low and very predictable power prices – and locations that spend half the year below freezing – now make Sweden the most favorable data center location in Europe.

Personally, this is a very satisfying outcome. Myself and other industry advocates have worked for 6 years to encourage this change. It’s a great opportunity for data center operators and a great opportunity for us. I already know of several major players who started paying a lot more attention to Sweden as a data-center location as soon as it became clear that this change would happen. There are even some key visits happening as I write. And as every data center will need large-scale connectivity (fiber, waves etc), we are in a great position to be the backbone of their business.

Oh, and if you really want a drink inside a coconut, we can arrange it.

Mattias Fridström