Setup A Branch Office in Poland in 2024-25
Are you an entrepreneur looking for the perfect location to set up a branch office in the European Union? But what factors do you consider when choosing the ideal location for setting up your branch office?
Although, setting up a business might look like an easy task but there are various factors
that you must consider in order to operate your business smoothly. One such factor is choosing the perfect location for your business.
One of the best locations for setting up a branch office is Poland. It is advantageous to register a branch office in Poland because of its central location in Europe, which facilitates trade with neighbouring nations, its 40 million inhabitants, and its stable economy.
In this article, you will comprehend how a branch office in Poland can be established. You will also understand how a branch office in Poland is a better option than other forms of business structure.
What is a branch office in Poland?
A branch office in Poland is a form of business structure that is established by the overseas parent organization and engages in operations similar to that of its parent firm. A branch office is not a separate legal entity from its parent company and as such the obligations and liabilities of the branch will directly affect the parent company.
Characteristics of a Branch Office in Poland
The characteristics of the branch office in Poland are discussed below:
Not a distinct legal entity
A branch office is not a distinct legal entity and as such the parent firm is completely responsible for all the debts and obligations of the branch.
Local representative
The branch office should have a representative in Poland who is authorized to act on account of the overseas corporation.
Business activities
A branch office is allowed to engage in similar business activities as that of its parent corporation.
Methods to Register a Branch Office in Poland
An international entrepreneur may begin operating in the branch office after getting approval that the branch has been registered in the KRS or National Court Register.
Based on where the international investor is from, there are two methods to establish a branch office in Poland following the requirements of the Entrepreneurs Law in Poland.
1. European Union (EU) or European Free Trade Association (EFTA)
International business owners from the EU and the EFTA operating in Poland must abide by the same regulations as local Polish business owners.
2. Other nations, that are not EU or EFTA
International business owners from non-EU and non-EFTA nations are permitted to establish a branch in Poland only when their place of origin uses the reciprocity method, i.e. when a Polish enterprise is permitted to establish its branch in the region of the international entrepreneur’s place of origin, Unless the home country approved international accords that state differently.
Procedure to incorporate a branch office in Poland
1. An international owner can start a business by registering the branch of the parent company with the National Court Register.
2. When incorporating a branch, the foreign businessperson must appoint an authorized representative to represent them on their behalf.
3. Maintaining distinct accounting documents in the Polish language and in compliance with the Polish accounting rules.
4. Notifying the appropriate ministry if there are any modifications to the branch’s factual and constitutional existence.
• These include:
- The process to liquidate has begun.
- The parent corporation was no longer permitted to engage in business operations.
- The safety and defense of Poland, the confidentiality of state information, or any other significant public concern are threatened by an international entrepreneur’s action.
5. The branch would receive a registration certificate once it has been registered. Additionally, the branch must register for VAT.
6. To conduct specific commercial operations, the branch would require particular licenses and permits.
7. In order to establish a branch office in Poland, it is necessary for the branch office to take the original name and legal form of the foreign company that should be translated into Polish.
Documents required to register a branch office in Poland
To register a branch office in Poland, the following documents are required:
- Information about the individual authorized to act as an overseas business representative in the branch.
- A signature that has been officially certified as belonging to a representative of the international firm in the branch.
- Incorporation documents.
- Approved documents of the Articles Of Association of the international organization must be translated into Polish and has to be authenticated by a Public Notary
- Original excerpt from the registry where the international firm is established.
- Specifics of the activities that will be conducted in the branch office in Poland.
Accounting criteria for a branch office in Poland
- The branch must apply for VAT registration with the Polish Tax Authorities of Poland & must acquire a tax ID number (NIP).
- According to Polish legislation, monthly financial statements must be produced, and also yearly returns must be submitted.
- Additionally, the branch needs to open a Polish bank account.
Taxation policies for the branch office in Poland
An international corporation’s branch office in Poland is only partially obligated to pay taxes of the corporate income tax system in accordance with the Polish tax laws. This means that the branch is liable to give corporate tax only on the profits made on the Polish territory. The branch office in Poland of the international corporation is mandated to register for Polish VAT.
What distinguishes a branch office in Poland from other business models?
- There are fewer registration requirements in the case of a branch office, making it simpler to establish the branch.
- The branch is taxed only on the revenue derived from operating in the Poland territory.
- A branch office in Poland is not obligated to have a certain amount of share capital to operate in Poland.
- The branch must adhere to accounting regulations and maintain separate accounting books in Poland.
- For the purpose of carrying out specific commercial operations, the branch may need specific licenses and approvals.
Conclusion
Establishing a branch office in Poland would be an effective form of business for foreign individuals. The establishment of a branch office in Poland would provide the international company with the assurance that the branch office’s operations are governed by the parent company’s office.
Furthermore, opening a branch office in Poland is less expensive than using another business structure because there is no requirement for minimum share capital, only the money made from opening a branch office in Poland is subject to tax, they do not have a distinct legal personality, etc.
If you wish to open a branch office in Poland, you can consult OnDemand International. We will assist you in setting up a branch office in Poland by guiding you through the procedure.
FAQ’s
A branch office is a company that is established by the parent organization to carry out the same company’s operation in different places.
A branch office can be registered in National Court Register(KRS).
Setting up a branch office in Poland is a better choice because of the following reasons-
- Fewer registration requirements
- Easy to establish
- Taxed only on the revenue service from doing business in the Polish territory
- Not obligated to have a certain amount of share capital
Any foreign corporation opening a branch in Poland must register as an entrepreneur with the National Court Register. Following completion of this, the branch can then begin carrying out its business operations.
