Dance trio Swedish House Mafia created an offshore company in the British Virgin Islands — a well-known tax haven — where it held the ownership to the band’s name, logo and music tracks, including hits like “Don’t You Worry Child,” according to a report Sunday from Swedish broadcaster SVT.
The band formed the entity, SHM Holdings Ltd., in 2009 — the same year they released “Leave the World Behind” with Laidback Luke, which helped launch the group’s success — and kept it operating as late as 2017, SVT reported. The broadcaster’s report was part of Pandora Papers, a leak of 11.9 million documents investigated by more than 600 journalists in 117 countries in collaboration with the International Consortium of Investigative Journalists, which became public over the weekend.
The entity’s three owners — Axel Christofer Hedfors, known as Axwell; Sebastian Ingrosso; and Steve Josefsson, who goes by Steve Angello — set up the entity through another offshore company on the island of Nevis, Marsham LLC, which in turn is controlled by a wealth adviser in Switzerland, SVT reported. Initially, the plan was to name the company Swedish House Mafia Ltd., but officials in the British Virgin Islands wrote that “mafia” was “not acceptable for use in a company name,” SVT reported.
In addition to “Don’t You Worry Child,” the group’s biggest hit, the entity also reportedly contained the rights to “Save the World.”
Music copyrights are easy to move between countries and well-suited for tax planning — but also for possible tax evasion. Some countries have attracted intellectual property rights with low taxes on royalty income, says Lena Bergkvist, a coordinator of the Swedish Tax Agency dealing with international tax avoidance.
Had the band been trying to allocate copyrights to a corporation on BVI, “you could be trying to put income in a place with low or no tax — and then get that money to an ultimate beneficial owner with no tax [applied],” Bergkvist tells Billboard. “That is the reason for doing [an entity like] this.”
A spokesperson for Swedish House Mafia confirmed to SVT the existence of the entity but said in an email that the arrangement — including the collaboration with the wealth adviser — was terminated in 2013. “[There were] question marks as to whether the construction could be perceived as a way of, so to speak, concealing assets, which could be to the detriment of the SHM brand,” the spokesperson told SVT.
The spokesperson added the company probably never withdrew any money. “The purpose of the company was not to evade tax,” the spokesperson added in the statement to SVT. (A spokesperson did not respond to requests for comment from Billboard.)
At their peak, in 2013, Swedish House Mafia ranked fourth on Forbes’ list of the world’s highest-paid DJs, earning $25 million. When the band broke up that year, two of its members — Axwell and Angello — were living full-time in Los Angeles. Since reuniting in 2018, all three members have been living in Sweden.
The band released two new singles in July, “It Gets Better” and “Lifetime,” and announced plans to release their first studio album, Paradise Again, later this year.
Sweden is traditionally known as a high-tax country but eliminated its wealth tax in 2008. The Pandora Papers contains information about some 200 Swedish offshore entities involving politicians, business leaders and entertainers, Bergkvist said she had been told. The leaked documents span a period from the early 1970s to 2020.