Foreign entrepreneurs, who want to start operations here in Poland, often wonder which company form is the best to choose. They have two main options: either setting up a branch of their existing company, or establishing an entirely new entity. It is commonly known as a subsidiary, most often in the form of a limited liability company (sp. z o. o.).
Read our article on setting up a limited liability company (sp. z o.o.) in Poland. You’ll find key information there to help you compare an LLC with a branch. What’s more, our next blog post will cover exactly this topic.
In this article, we’ll clearly and concisely explain how to establish a branch of a foreign company.
What are we talking about here?
A branch of a foreign company is essentially an “extension” of your foreign business into the Polish market. The branch itself does not have legal personality — the parent company is directly responsible for all its actions and liabilities.
To begin with
Entrepreneurs from European Union countries can open a branch of their company in Poland without major restrictions. For companies from outside the EU, the situation is a bit different. The possibility of setting up a branch depends on the principle of reciprocity. Simply put, it comes down to whether international agreements grant Polish entrepreneurs similar rights abroad.
A branch can only carry out the same business activities as the foreign company performs in their country of registration. This is an important limitation. Unlike a newly established LLC, which can operate for any purpose permitted by law.
Key considerations
Although a branch is not a separate legal entity, it is still subject to nearly all the fundamental requirements that apply to an LLC. This includes, among others:
- a registered office, which the branch must have and to which it must hold legal title. This can also be a virtual office — the law does not prohibit it,
- accounting — full accounting is required, in accordance with the Polish Accounting Act,
- representation — although a branch does not have a management board, it is necessary to appoint a person within the branch who will represent the foreign company. Interestingly, there are no specific requirements as to who this person must be. This means they do not have to be someone who officially represents the foreign company.
An interesting aspect of a branch is its name, as there is no room for flexibility here. The branch’s name must include the original name of the foreign company, the translated legal form in Polish and the phrase “oddział w Polsce” (branch in Poland). You are not allowed to add anything else to the name.
There is also one feature that distinguishes a branch from other legal forms in Poland. Funds, goods, materials, and other fixed or current assets can be freely transferred to and from the branch — all between the branch and the parent company. The convenient part is that no additional documentation is required for such transfers — no contracts, invoices, or similar paperwork. You simply send the assets, and that’s it. However, it’s important to remember that these transfers must be recorded in the accounting ledgers. So, you’ll need to inform your accountant about the amounts of money or the value of any non-monetary assets being transferred.
All about the application
You know where you stand and let’s assume you have decided to open a branch of your foreign company. First step is to submit a registration application to the National Court Register (Krajowy Rejestr Sądowy – KRS).
The application for registration must be submitted only electronically through the PRS portal. Fill everything out in Polish and submit it to the court having jurisdiction over the address of the branch office.
A number of documents must be attached to the application. Here they are:
- a statement indicating the address in Poland of the person representing the foreign company,
- a certificate from the Polish representation confirming the principle of reciprocity,
- the founding act, agreement, or articles of association of the foreign company — with a sworn translation into Polish,
- an excerpt from the register of the foreign company — also with a sworn translation into Polish,
- optionally, other documents, such as a power of attorney.
The registration court reviews the application within 7 days from the date it is received.
Costs
- 500 PLN – court fee for the entry
- 100 PLN – fee for publishing the entry in the Court and Economic Monitor (Monitor Sądowy i Gospodarczy)
You pay the fee through the portal.
What should I do after registration?
There is still some paperwork to be done, mainly related to taxes, that is:
- submit the NIP-2 form to the tax office through the parent company in order to obtain a tax identification number (NIP) for CIT and VAT purposes. The taxpayer for these taxes is the parent company, not the branch,
- register for VAT, also through the parent company. VAT registration is required from the first sale. Foreign entrepreneurs are not entitled to exemptions, so registration is mandatory regardless of the circumstances,
- submit a supplementary NIP-8 form to the tax office. There you provide, among other things, the address of the branch office and possibly other places of business, bank account numbers, the accounting company with which you cooperate, the expected number of employees.
After submitting the NIP-8 form, a second NIP is assigned specifically for the branch, to be used for social security (ZUS) contributions and PIT on employee salaries. In these cases, the branch itself is the taxpayer.
Taxes in a branch of a foreign company are exactly the same as in an LLC. So if you want to learn more about taxation, be sure to check out our article on taxes in LLC. Naturally, dividends do not apply to branches. As mentioned earlier, profits can be freely transferred from the branch to the parent company.
That’s it! And finally
Establishing a branch is a cheaper and less formal solution. For example, it does not require share capital, and no notarial deed is needed when setting it up. In practice, it’s simply an “extension” of the business into the Polish market without creating a separate legal entity. However, this also comes with limitations — the branch cannot engage in activities different from those of its foreign parent company.
We’ll explain the differences between a branch and a separate LLC in more detail in our next article. Everything will be presented there in a clear and easy-to-understand way.
As always, accounting remains a very important matter. As mentioned earlier, a branch must maintain its accounting records in accordance with Polish regulations and in the Polish language. This is a legal obligation that cannot be overlooked and should be carefully considered when deciding to operate in Poland.
Fortunately, you’re not alone — we’re here for you and ready to take over everything that might feel overwhelming. As a professional accounting firm, we’ll answer your questions, assist you with registration, and handle your ongoing full accounting ledgers. We’ve been helping foreign entrepreneurs for years and know this process like the back of our hand!
Contact us now and let us save you this unnecessary stress and potential consequences.
