23.08.2023 Business law

How to set up a branch of a foreign company in Poland?


One of the ways for a foreign entrepreneur to enter the Polish market is to open and run a business in the form of a branch. This solution allows you to control the activity in a selected country without establishing a separate business entity, which allows a foreign entrepreneur to save time and capital however, despite the advantages, as it usually happens in practice, this solution is also not without disadvantages, which we describe further below.  

A branch in Poland is an extension of the activity of a parent company registered in another country. A branch acts ” in the name and on the behalf” of a foreign entrepreneur.   

A branch is a part of the economic activity of a foreign enterprise, which is: 

  • organizationally separated; 
  • organizationally independent; 
  • performed outside the registered office or principal place of business of the entrepreneur. 

What are the characteristics of a branch of a foreign entrepreneur? 

Below we present the main features of a foreign branch in Poland: 

  1. no separate legal status – a branch is only an extension of the  activities of a foreign parent company, not a separate business entity. 
  1. lack of legal capacity and capacity to sue and be sued – the branch  does not act on its own behalf; any acquired right or liability incurred directly affects the foreign company; the parent company is responsible for legal acts performed by the branch. 
  1. lack of capacity to sue and be sued – a branch cannot be a party to a  lawsuit; a potential party to the process will be a foreign company; the branch may not perform acts before the court on its own behalf. 
  1. limited scope of activity – the branch must perform the same type of business as the foreign company, its activity may not exceed that specified in the parent company deed. 
  1. dependence on a foreign company 
  1. lack of separate bodies – the branch does not have its own bodies such the management board or the general meeting of Shareholders, etc.  
  1. no separate assets – the branch may freely use the capital of the parent company;  however, the branch may be obliged to  provide up-to-date documentation that allows for the assessment of its financial situation, for example, when the branch takes part in a tender. 
  1. no requirement to contribute share capital 
  1. identical company name – the name of the Polish branch must be identical with the name of a foreign company with the addition of a legal form translated into Polish and the addition of words “oddział w Polsce” (branch in Poland). 

Who can open a branch in Poland? 

A branch in Poland can be opened by foreign entrepreneurs from other EU Member States or European Free Trade Association (EFTA) member states. 

If the foreign company is not a member of the EU or EFTA, then it can open a branch only on the basis of reciprocity. Opening a branch in Poland will be possible only if the Polish company can open a branch in the country of origin of the foreign parent company and exercise economic rights similarly to local entities. 

Registration of a branch of a foreign company in the National Court Register 

A branch may start operating only after registration in the National Court Register. An application for entry may be submitted only in electronic form via the  Court Records Portal – PRS.  

The following documents must be attached to the application: 

  • memorandum of association, articles of association or company deed of the parent company with a certified translation into Polish language; 
  • copy of an entry from business register with a certified translation into Polish; 
  • address in Poland of a person authorized in a branch to represent a foreign entrepreneur; 
  • a certificate of reciprocity; 
  • resolution of the management board of the parent company on the establishment of a branch and the appointment of a person representing a foreign entrepreneur in a branch; 
  • other documents, such as a power of attorney and proof of payment of stamp duty for the power of attorney. 

In accordance with the regulations, the registry court examines an application for entry in the National Court Register within 7 days from the date of its receipt by the court. In practice, however, it takes much more time,  about a few weeks. 

Remember: the branch cannot conduct any activity in Poland until the registration process is completed

How much does it cost to register a branch of a foreign company? 

PLN 500 – court fee for entry 

PLN 100 – fee for announcing an entry in the court gazette Monitor Sądowy and Gospodarczy 

The costs of certified translations of the required documents should also be taken into account and added.   

In the case of a branch, the so-called one-stop shop rule does not apply, therefore, immediately after registration in the National Court Register, the entrepreneur must apply for registration at the Tax Office, the Central Statistical Office and the Social Insurance Institution, if it employs workers.  

Who represents a branch of a foreign entrepreneur in Poland? 

A foreign entrepreneur  that established a branch is obliged to appoint a person authorized in the branch to represent the parent company in Poland – an agent for representation also known as a branch representative. This obligation is linked to the fact that the branch does not any have formal separate management bodies. Therefore, the affairs of the branch are conducted  by a person indicated by the foreign entrepreneur. 

Polish law does not specify any requirements for the selection of a representative – it does not have to be Polish a citizen or employee of a branch, or a person who speaks Polish. However, the representative must have an address in the territory of the Republic of Poland.  

Bookkeeping for a branch in Poland 

The branch is obliged to keep separate accounts for the branch in the Polish language in accordance with the provisions of the Accounting Act. Accounting books do not have to be kept in a branch – it is possible to keep them at the headquarters of a foreign parent company.  

Tax Identification Number (NIP) and tax obligations  

The issue of registering a branch with the Tax Office may arouse doubts because tax authorities are of the opinion that a foreign entrepreneur must have two tax IDs (NIP numbers) – one for itself as a taxpayer in order to settle VAT and CIT, and the other for a branch, acting as a remitter, in order to settle PIT and ZUS contributions. According to the tax office, it is not permissible for the two entities to have the same tax ID. Nevertheless, the position of some administrative courts is entirely different.  

Branch in Poland – tax obligations 

It is the foreign entrepreneur who is a CIT taxpayer, not a branch (due to the lack of legal personality). The parent company is obliged to pay corporate income tax (CIT) in Poland. The parent company should pay VAT directly in Poland.  

As a rule, a foreign company must register in Poland as  a VAT taxpayer if its activity is subject to VAT. 

Employing workers by a branch triggers the obligation to pay social security contributions and income tax advances for workers. 

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Grzegorz Witczak Director of the Commercial Law and Property Department, Advocate
TGC Corporate Lawyers
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