Any foreign company headquartered outside Poland can open a Polish branch. A branch is a suitable organizational and legal form for a foreign company wishing to establish a presence in Poland to initiate business and maintain contacts with business partners.
Subsidiaries in Poland
A subsidiary company is a limited liability company, which is obliged to comply with all rules and regulations for taxation and accounting applicable in Poland. The opening of subsidiaries in Poland is usually chosen by small and medium-sized enterprises.
Benefits of subsidiaries
The subsidiary in Poland is independent of the parent company abroad. It is a great advantage over the Polish subsidiary. A foreign company that wants to open a branch in Poland is liable for all of its obligations. However, the subsidiary is considered a Polish company and is responsible for its activities in Poland.
Those wishing to register a company in Poland have to complete several basic steps, as well as comply with the rules regarding the minimum amount of the authorized capital and the mandatory list of documents for registering a company.
Setting up a subsidiary in Poland
Registration of a limited liability company in Poland requires a minimum share capital of PLN 5,000, divided into shares. The name of the limited liability company must be unique and the subsequent termination of “Spolka z o.o.” Management is provided by the Board of Governors, whose members are elected by the Supervisory Board or by the general meeting of shareholders.
A subsidiary is a legal entity and has the same rights and obligations as a Polish company. That is why it is necessary to register for VAT.
Branches in Poland
The branch in Poland is essentially an extension of the parent company located in another country. Opening a branch is an excellent solution for international companies that want to expand their activities in Poland and control the activities of their office within the country.
Alternatively, a foreign company can register a subsidiary in Poland. The activities of the branch should coincide with the activities of the head office. Moreover, the peculiarity of the branch is that it is completely dependent on a foreign company.
The branch is part of a foreign company. It does not have the status of a legal entity, therefore any actions or obligations of the branch in Poland directly affect the foreign company. The name of a branch opened in Poland must be the same as the name of the foreign company translated into Polish and with the addition of the term: “oddział w Polsce”.
There is no minimum authorized capital for registering a branch, but the branch itself must meet several criteria for registration.
How to create a branch in Poland
A foreign company, to register a branch in Poland, must have the right to use the premises that will be registered behind the branch as an office in Poland by providing a lease agreement.
In addition, it is necessary to appoint a representative authorized to act on behalf of the foreign company and the Polish branch. This person does not have to have Polish citizenship, but rather staying at an address in Poland. This address can be the same as the address of the branch.
To open a branch in Poland, it is necessary to register in the National Court Register. Online registration is not possible. The forms are only available in Polish.
Additionally, the following documents must be attached to the application for registration of a branch:
- Name and address in Poland of the person authorized to head the branch. This representative does not need to have Polish citizenship. It is enough to stay at an address on the territory of Poland.
- Notarized signature of the person. The signature can be made by a Polish or foreign notary. If the certification is done abroad, then a notarized translation into Polish by a certified Polish translator is required.
- The statutory fund agreement, memorandum of association, or articles of Association with certified translation into Polish (if the foreign entity acts based on these documents).
For those persons to whom this regime applies, taxes are withheld solely from income received in connection with the performance of duties in Poland or acquired from Polish sources.
Income tax for legal entities in Poland is one of the lowest in Europe, at 19%. Partnerships do not pay corporate income tax.
VAT in Poland
The standard VAT rate in Poland is 23% from 2011. Like many other countries, Poland also provides VAT exemptions for various services such as postage and financial services and has reduced rates of 8% and 5% for some food products, books, newspapers, and other categories of goods. However, it is possible to recover VAT by applying it to the tax authorities.