Head Office Accounts
Section 373(1) of the Companies Act (the “Act”) requires a foreign company which is required to hold an annual general meeting (“AGM”) and to prepare a balance sheet and the requisite documents by the laws of the place of its incorporation or origin, to file its balance sheet and the requisite documents (hereafter termed as “Head Office Accounts”) within 2 months after its AGM.
For a foreign company which is not required to hold an AGM and to prepare a balance sheet and the requisite documents in its place of incorporation or origin, Section 373(4) of the Act allows the foreign company to file a balance sheet and such requisite documents as if the foreign company is a public company incorporated under the Act (i.e. a set of audited accounts which complies with the Singapore Financial Reporting Standards (“SFRS”)), within 7 months from the end of its financial year. A declaration verifying that the accounts are true copies is also required to be lodged with the accounts.
Branch Accounts
In addition to filing of Head Office Accounts mentioned above, a foreign company is also required under Section 373(5) of the Act to lodge the audited accounts of its Singapore branch that, in so far as is practicable, complies with the SFRS and which gives a true and fair view of the branch’s operations in Singapore for the last preceding financial year of the foreign company (hereafter termed as “Branch Accounts”).
The local agents of the foreign company are required to do the lodgement “Annual Filing of Account by a Foreign Company” via BizFile.
What if the foreign company is unable to comply with the filing requirements?
A foreign company which is unable to comply with the requirements may apply to the Registrar under Section 373(7) for relief from the requirements relating to the form and content of accounts or reports lodged. This is applicable to both the Head Office Accounts and the Branch Accounts.
The foreign company may also apply under Section 373(5) for waiver to file its Branch Accounts. However, there is no provision under the Act to waive the filing of the Head Office Accounts.
Is there a time frame to apply for such a relief under Section 373?
To apply for the relief from the requirements relating to the form and content of accounts or reports lodged under Section 373(7) or waiver from filing its local branch accounts under Section 373(5), the foreign company should make the application before the due date of its filing of accounts (where Section 373(1) is applicable) or within 7 months from the end of the foreign company’s last financial year (where Section 373(4) is applicable) for ACRA’s consideration.
Applications that do not adhere to the time frame above will be rejected.
Applications must be made at least one month before the filing deadline to give ACRA adequate time to assess the applications.
What is the application fee for such a relief under Section 373?
The application fee is $30.
Are there any conditions to satisfy for the application to be approved?
Relief from requirement as to Form and Contents of Accounts and Report under Section 373(7)
The application under Section 373(7) for relief from the requirements relating to the form and content of accounts or reports lodged will only be approved if it meets the following conditions:
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Compliance with the requirements would render the accounts or reports misleading;
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Compliance with the requirements is inappropriate to the circumstances of the foreign company; or
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Compliance with the requirements would impose unreasonable burden on the foreign company.
An application for relief under Section 373(7) must be accompanied by a statutory declaration (made by either a local agent or director of the foreign company) which contains the following information:
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Schedule of Compliance setting out the requirements under Section 201 of the Companies Act which the foreign company is able to comply with and those that it is unable to comply with;
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The specific requirements under Section 201 from which the foreign company is seeking relief;
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The specific condition under Section 373(8) which the foreign company is able to satisfy;
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Facts to support that the company satisfies the condition; and
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The financial year in respect of which the application is being made.
Under Section 373(7), ACRA is only empowered to waive the requirements relating to the form and content of accounts or reports lodged. However, there is no provision under the Act which provides for waiver from filing of the Head Office Accounts.
With effect from financial periods commencing 1 January 2012, ACRA will no longer accept the lodgement of a foreign company’s immediate or intermediate or ultimate holding company’s accounts in lieu of its Head Office Accounts.
BizFile transactions to be filed:
Waiver from Filing Local Branch Accounts under Section 373(5)
As for the application under Section 373(5) for waiver from filing local Branch Accounts, it will only be approved if it meets the following conditions:
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It is impractical to comply with Section 373(5) having regard to the nature of the foreign company's operations in Singapore;
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It would be of no real value having regard to the amount involved;
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It would involve expense unduly out of proportion to its value; or
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It would be misleading or harmful to the business of the foreign company or to any company which is deemed by virtue of Section 6 to be related to the foreign company.
An application for waiver under Section 373(5) must be accompanied by a statutory declaration (made by either a local agent or director of the company) which contains the following information:
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The specific condition (i.e. (i) to (iv)) under Section 373(5)(b) which the foreign company seeks to rely on;
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Facts to support the claim that the foreign company satisfies the particular criteria;
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The financial year in respect of which the application is being made;
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The date of the foreign company's AGM or impending AGM (if any); and
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The unaudited income statement and balance sheet of the branch, which represents the foreign company's operations in Singapore, regardless of whether the transactions (income or expenses) are recorded or borne by the Singapore Branch or the foreign company.
BizFile transactions to be filed:
Can a foreign company request for an extension to file annual return or hold an AGM?
For a foreign company which is not required to hold an AGM and to prepare a balance sheet and the requisite documents by the laws of its place of incorporation or origin, ACRA is prepared to grant a one-off extension of up to 2 months upon payment of a $30 fee, provided that the application is made within the 7 months from the financial year end of the foreign company.
The local agents of the foreign company branch are required to put up the application via BizFile as follows:
Relevant Practice Direction
ACRA had issued Practice Direction 1 of 2012 "Applications for Exemptions under Sections 373(5) and 373(7) of the Companies Act, (Cap. 50)" on 5 January 2012 to provide further clarity on the legal requirements relating to financial reporting imposed on foreign companies, the policies supporting these requirements and the criterion and conditions imposed by ACRA for exemptions under Sections 373(5) and 373(7). Please refer to the Practice Direction for more information and guidance.