Background: This paper focuses on firm relocation for SMEs. A process that due to changing requirements for businesses as well as changing customer needs is a very contemporary issue. Municipalities in both Sweden and the Netherlands have seen that businesses are moving away to the larger regions, mainly due to favourable business location factors in these areas. Over 20% of businesses have considered relocating in the near future. Current literature mainly focuses on business perspectives and specific industries. Research on this topic from the municipality perspective will provide new insights on the topic of relocations.

Purpose: The purpose of this study is to explore how and where municipalities can increase their influence in the relocation process in order to increase the relocation of more small and medium sized businesses to their regions.

Method: This thesis makes use of a multiple case study approach, while conducting semi-structured interviews with a wide variety of SMEs from different industries that have moved in the past five years. A qualitative study will be used to research the topic, and to create a theory that can be used be municipalities on how to influence relocating SMEs. The gathered data was researched using a thematic content analysis.

Conclusion: Results show that municipalities are able to increase their influence on the relocation process in several ways. Firstly, by being proactive when it comes to location drivers, ensuring that their current businesses do not leave. Proactive information provision through several channels to the SMEs that are considering relocation can positively influence relocation. Lastly municipality politics has a clear influence on relocations as it can help keep businesses embedded in their current regions. Or stimulate businesses from outside a region to relocate due to creating favourable regional characteristics.