Setup A Branch Office in Poland in 2022-23
Poland is a rapidly expanding economy in the European Union. Poland is a great alternative for international investors who wish to start a business. An entrepreneur can set up a branch of their company in Poland to begin conducting business there.
Setting up a branch office in Poland is a great option for entrepreneurs as this kind of business structure will be less expensive to incorporate and the parent company will have control over its operations. Moreover, it is easy and more convenient to set up a branch office in Poland.
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.
Meaning of a Branch Office
A branch office is a company that is established by the parent organization to carry out the same company’s operation in different places. International entrepreneurs can choose to set up a branch office in Poland to conduct business in Poland.
In essence, the branch office in Poland is an expansion of the foreign-incorporated parent firm. This is a great option for foreign corporations that desire to grow their operations in Poland and have authority over the activities of their office in the nation.
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.
- 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.
- 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.
Activities of a branch office in Poland
A branch office in Poland is permitted to carry out a range of commercial and business operations provided that:
- The operations performed by the branch office in Poland resemble those of its holding company.
- The registered branch office name matches that of its holding company.
- This business type is a component of an international business. It lacks legal identity, and any responsibility or action taken by the Polish branch will have an immediate impact on international business. But this type of corporate entity is simpler to establish and can start operating more quickly.
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.
Legal personality of the branch office in Poland
Under Polish commercial law, a branch of an international corporation operating in Poland lacks legal personality. The branch is merely a distinct organizational form of an international enterprise that conducts its business elsewhere.
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.
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 ODINT Consulting. We will assist you in setting up a branch office in Poland by guiding you through the procedure.
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