Foreign road transport operator and its branch in Poland – regulations and requirements

In one of our previous publications, we analysed the concepts of an entrepreneur and economic activity in the context of the Entrepreneurs Act of 6 March 2018 and presented different interpretations of these concepts within individual branches of law. Now we continue those deliberations, focusing on the activities of a branch of a foreign entrepreneur and the profession of a road transport operator. If you are a foreign entrepreneur who wants to start business involving road transport services in Poland, this article is for you.

The concept of an entrepreneur and economic activity and legal regulations

The basic legal act containing the definition of an entrepreneur and economic activity in the Polish legal system is the Entrepreneurs Act of 6 March 2018.

An entrepreneur – in accordance with Article 4(1) and (2) of the said Act – is a natural person, a legal person or an organisational unit not being a legal person that is granted legal capacity by a separate act of law, conducting economic activity. Partners in a civil law partnership are also entrepreneurs within the scope of the economic activity conducted by them.

On the other hand, according to Article 3 of the said Act, economic activity is organised gainful activity, conducted in one’s own name and on a continuous basis.

Entrepreneur and economic activity in transport

The Road Transport Act of 6 September 2001 does not independently define the concepts of entrepreneur and economic activity, but refers to the Entrepreneurs Act. Therefore, it should be concluded that a road transport operator is an entrepreneur within the meaning of Article 4(1) and (2) of the Entrepreneurs Act, who performs economic activity in the field of road transport services, which is a special type of economic activity defined in Article 3 of the Entrepreneurs Act.

Definition of a branch of a foreign entrepreneur in Polish law

The definition of a branch of a foreign entrepreneur and the rules governing the conduct of economic activities by branches of foreign entrepreneurs on the territory of the Republic of Poland are set out in the Act on the Rules of Participation of Foreign Entrepreneurs and Other Foreign Persons in Business Turnover in the Republic of Poland of 6 March 2018.

Pursuant to Article 3(4) of the same Act, a branch of a foreign entrepreneur is a separate and organisationally independent part of the economic activity carried out by the entrepreneur outside the entrepreneur’s registered office or main place of business. Pursuant to Article 4(1) of the same Act, foreign persons from the Member States of the European Union may take up and carry on an economic activity on the territory of the Republic of Poland under the same conditions as Polish citizens.

Permit to practice the profession of a road transport operator

Taking up and performing road transport services requires, in accordance with Article 5(1) and (2) of the Road Transport Act, obtaining authorisation to pursue the occupation of road transport operator, on the terms set out in Regulation (EC) No. 1071/2009 of the European Parliament and of the Council of 21 October 2009. An authorisation to pursue the occupation of road transport operator is granted to an undertaking if it satisfies the requirements set out in Regulation (EC) No 1071/2009.

According to Article 3 of Regulation (EC) No 1071/2009, one of the conditions imposed on an undertaking for authorisation to pursue the occupation of road transport operator is to have an effective and stable establishment in a Member State.

Branch of a foreign entrepreneur as a road transport operator in Poland

In the light of the above-mentioned regulations, the question arises as to whether a foreign entrepreneur operating in the Republic of Poland may perform the activity of a road transport operator through a branch established in our country. In other words, it is reasonable to ask whether a branch of a foreign entrepreneur may independently apply to the Chief Inspector of Road Transport for authorisation to pursue the activity of a road transport operator on the territory of the Republic of Poland and for a Community licence for international carriage of goods by road for hire or reward.

Such a question was the subject of a decision in a case conducted before the Supreme Administrative Court under file no. II GSK 184/20, in which the judgment was delivered on 17 November 2022.

In the above-mentioned case, the Supreme Administrative Court considered a final appeal by a branch of a foreign entrepreneur against the judgment of the Provincial Administrative Court in Warsaw, which upheld the decision of the Chief Inspector of Road Transport refusing to grant an authorisation to a branch of a foreign entrepreneur to pursue the occupation of road transport operator.

The Supreme Administrative Court, after a detailed analysis of the concepts of entrepreneur, economic activity and road transport activity, as well as an analysis of the conditions that must be fulfilled by a road transport operator in order to have access to the possibility of exercising the profession of road transport operator, came to the conclusion that none of the provisions cited in the grounds of the judgment recognises a branch of a foreign entrepreneur as a separate entity that can act independently and thus be an entrepreneur. As the Supreme Administrative Court pointed out, a branch of a foreign entrepreneur is only a part of a foreign enterprise, which in Polish law is defined in Article 55¹ of the Civil Code of 23 April 1964. Moreover, a branch is not an organisational unit that is not a legal entity and is not granted legal capacity by a separate legal act, as the issues of conducting business through branches are regulated only by the Act on the Rules of Participation of Foreign Entrepreneurs and Other Foreign Persons in Business Turnover in the Republic of Poland, without reference to other legal acts in this regard. Thus, a branch is not an entrepreneur and does not have a separate legal personality from an entrepreneur.

Further, according to the Supreme Administrative Court, a foreign entity operating in Poland in the form of a branch is treated as a single entity – a foreign entrepreneur. The registration of a branch of a foreign entrepreneur is equivalent to the registration of a foreign entrepreneur. Therefore, the branch has only organisational independence (it is separated from the structures of the parent company), but it does not have the ability to conduct economic activity in its own name and on its own account, and the conducted activity is only a part of the economic activity of the foreign entrepreneur. In such circumstances, according to the Supreme Administrative Court, a foreign entrepreneur remains an entity conducting business in Poland (despite the establishment of a branch in Poland).

In the light of the above, the Supreme Administrative Court found that the position of the Chief Inspector of Road Transport, who refused to grant a branch of a foreign entrepreneur a licence to pursue the profession of road transport operator, was correct. According to the Supreme Administrative Court, a branch cannot be an entity with rights and obligations, nor can it independently carry out economic activities in the field of transport in Poland. It is the foreign entrepreneur who should apply for an authorisation to pursue the occupation of road transport operator, but not on the territory of the Republic of Poland, but in the country where it has its registered office. The detailed conditions for applying for an authorisation to pursue the occupation of road transport operator for a given foreign entrepreneur should be determined in accordance with the legal regulations of the country in which the foreign entrepreneur has its registered office.

Road transport in Poland – a special purpose vehicle as an optimal solution

In the light of the above-mentioned position of the Supreme Administrative Court, it should be noted that a branch of a foreign entrepreneur may not obtain an authorisation to pursue the occupation of road transport operator in the Republic of Poland, nor a Community licence for international carriage of goods by road. The current position of the Chief Inspector of Road Transport corresponds to the position expressed in the above-mentioned decision of the Supreme Administrative Court.

If a foreign entrepreneur intends to start transport activities in Poland, a much safer solution is to establish a separate special-purpose company. Such a company will be able to apply without any obstacles both for an authorisation to pursue the occupation of road transport operator on the territory of the Republic of Poland and for a Community licence for international carriage of goods by road for hire or reward. Alternatively, a foreign entrepreneur, in particular one with its registered office in one of the EU Member States, may apply for the appropriate authorisations for carrying out transport activities in the country of its registered office and, on this basis, carry out road transport operations in Poland.