Accounting documents for branches of foreign enterprises in Sweden

Content

Accounting documents

The branch is to keep its own accounting records which must be held separate from the accounting records of the foreign business enterprise. Concerning how the accounting records are to be concluded and filed, there are certain differences between branches of foreign business enterprises which are subject to the legislation of a state within the European Economic Area (EEA) and those that are not.

Summary of the provisions

The provisions regarding setting up and filing of accounting documents may be summarized as follows:

Deadline for filing is three months

The accounting documents for both the branch and the foreign business enterprise must be filed with Bolagsverket within three months from the date that the accounting documents and – when required – the auditor's report of the foreign enterprise were presented to the owners of the enterprise, however not later than seven months from the end of the financial year of the branch.

When is an auditor required?

Branches fulfilling at least two of the following criteria for each and every one of the two most recent financial years must have an auditor

• more than 3 employees (as an average)
• a balance sheet total of more than 1.5 million kronor
• a net turnover of more than 3 million kronor

Branches carrying on financial business activities pursuant to Article 12, second paragraph of the Foreign Offices Branch Act (1992:160) must always have an auditor.

Branches of business enterprises within the EEA

If the foreign business enterprise has a legal form, which is comparable with a limited liability company, the accounting records of the branch office are to be concluded by annual accounts (årsbokslut), prepared in accordance with the Book–keeping Act. When auditor is required, he/she must examine the annual accounts, the accounting records and the managing director's administration. The auditor's report is to be submitted to the managing director of the branch. The annual accounts are to be signed by the managing director of the branch.

Each year, the branch is to file a certified copy of the annual report (or the equivalent) of the foreign business enterprise and – when required – the auditor's report with Bolagsverket, if these documents have been made public in the country of origin of the business enterprise. The annual accounts of the branch are not to be filed with Bolagsverket.

The branches of business enterprises within the EEA that does not correspond to limited liability companies follow the same rules as branches of business enterprises outside the EEA, see below.

Branches of business enterprises outside the EEA

If the foreign business enterprise, regardless of the form of the enterprise, is situated outside the EEA, the accounting records are to be concluded by an annual report (årsredovisning) drawn up in accordance with the Annual Accounts Act. When auditor is required, he/she must examine the annual report, the accounting records and the administration. The auditor's report is to be submitted to the managing director of the branch, and he/she is to sign the annual report. A certificate of adoption (fastställelseintyg) on the annual report of the branch is not required since there is no annual general meeting of shareholders for branches.

Each year, the branch is to file a certified copy of its own and the foreign business enterprise's annual report (or the equivalent) and – when required – the auditor's report with Bolagsverket. The documents of the foreign business enterprise only need to be filed if they are made public in the country of origin of the foreign business enterprise.

Branches of banking and insurance companies

Regarding branches of banking and insurance companies, the same provisions as above generally apply, i.e. the provisions apply according to whether the foreign enterprise is registered within or outside the EEA. The applicable provisions are stipulated in the Annual Accounts Act for Credit Institutions and Securities Companies and the Annual Accounts Act for Insurance Companies. Furthermore, the Book–keeping Act is applicable for the annual accounts.

Language

The accounting documents for the branch are to be drawn up in Swedish or translated into Swedish.

The accounting documents for the foreign business enterprise are in accordance with the Foreign Branch Offices Act to be drawn up in Swedish or translated into Swedish. However, Bolagsverket also accepts accounting documents in (or translated into) English, Danish or Norwegian.

Deregistration and conditional fine

Bolagsverket may – without application from the branch – deregister the branch off the register if no accounting documents for the branch or the foreign company have been filed with Bolagsverket for the two most recent financial years.

Furthermore, Bolagsverket may by a conditional fine order the managing director of the branch to file the accounting documents if they have not been filed within the statutory time limit. As the Foreign Branch Office Act states that the accounting documents must be drawn up in or translated into Swedish, Bolagsverket may include this requirement in the conditional fine order.

The final accounting documents

The branch is required to maintain accounting records until the date it is struck off the register. The last financial year may therefore be shorter if the deregistration takes place before the end of the financial year. If the foreign enterprise is situated within the EEA the final accounts of the branch must be annual accounts, otherwise an annual report.

References

The Foreign Branch Offices Act (1992:160)

The Foreign Branch Offices Ordinance (1992:308)

Nr 190 e, 20 July, 2010