The branch must keep its own accounting records that must be held separate from the accounting records of the foreign-based company. How the accounting records are to be prepared and filed with Bolagsverket depends on whether the foreign-based company is situated within the European Economic Area (EEA) or not.
Which documents do you need to file?
Each year a branch must file a certified copy of the foreign-based company’s annual report. In some cases an auditor’s report must be filed as well. The managing director of the branch is responsible for making sure this is done and for signing the annual report.
Certain branches must also file the branch’s own annual report. The table below shows which branches this applies to.
|Type of branch||Do you need to file the foreign-based company’s annual report?||Which document should the branch’s accounting records be closed with?||Do you need to file the branch’s annual report?|
Branch of a company within the EEA, equivalent to a Swedish limited company
|Yes||Annual accounts or annual report||No (but you can if you want to)|
|Branches of foreign-based companies within the EEA, not comparable with limited companies||Yes||Annual report||Yes|
|Branches of foreign-based companies outside the EEA||Yes||Annual report||Yes|
If the branch must prepare and file an annual report according to the table above, it must do so even if the branch is not currently conducting business activities in Sweden and considers itself to be dormant.
If the foreign-based company considers itself to be a dormant company, it must still prepare and file an annual report with Bolagsverket. An exception can be made if the foreign-based company does not need to prepare and file an annual report in the country where the foreign-based company is situated because the company is dormant. Unless this is verified, Bolagsverket will require that the annual report is filed. The verification should be issued by the registration authority of the country where the foreign company is situated.
File annual reports within three months
Annual reports for the branch and the foreign-based company must be filed with Bolagsverket within three months from the date that they are presented to the company’s shareholders and within seven months from the end of the financial year of the branch.
What happens if you do not file the annual report?
If the branch has not filed its annual report or the foreign-based company’s annual report for the two most recent financial years, Bolagsverket can deregister the branch.
Bolagsverket may decide to fine the managing director of the branch if the annual report is not filed on time or if it is not in Swedish.
Which branches need to have an auditor?
A branch must have an auditor and file an auditor’s report with Bolagsverket if it has fulfilled at least two of the following criteria for each of the two most recent financial years:
- an average of more than 3 employees
- a balance sheet total exceeding SEK 1.5 million
- a net turnover exceeding SEK 3 million.
In addition, branches within the financial sector must, in accordance with chapter 12, section 2 of the Foreign Branch Offices Act (1992:160), always have an auditor.
The auditor must
- review the annual report, the accounting records and the managing director’s administration of the branch
- compile an auditor’s report directed at the managing director of the branch.
If the annual report is not a public document
You do not need to file the foreign-based company’s annual report if it has not been made public in the country of origin. However, you must file a statement which certifies that the annual report has not been made public. Such a statement must be filed every time this is the reason for not filing an annual report.
The annual report must be in Swedish
Annual reports and other accounting documents filed for the branch and the foreign-based company must be written in or translated into Swedish. Bolagsverket does however accept other documentation for the foreign-based company written in or translated into English, Danish, or Norwegian.
Branches can use either SEK or EUR as their accounting currency.
Special regulations for branches of banking and insurance companies
In addition to the regulations for branches based on whether the foreign-based company is situated within or outside the EEA, there are special requirements applying to branches of banking and insurance companies. These branches are also governed by:
- the Annual Reports Act for Credit Institutes and Securities Companies (1995:1559)
- the Annual Reports Act for Insurance Companies (1995:1560)
- the Book-keeping Act (1999:1078).
Branches in the process of being wound-up
The branch must continue to keep accounting records until the day we deregister it. The final financial year may therefore be shorter than 12 months if deregistration takes place before the end of the financial year.
Reminder for branches
We send out a reminder (in Swedish and English) to every registered branch each year about the rules that apply for filing annual reports.