Overview: Subsidiary Company Registration In Poland (2024-25)
Poland is an excellent location for any firm to expand its business. Poland grants corporate organizations from other European nations the same freedom to set up enterprises as it does for its own citizens. When foreign entrepreneurs decide to establish a business in Poland, they could either open a branch office in Poland or do a subsidiary company registration in Poland.
When a foreign businessperson wants to launch a firm in Poland, they have the option of creating either a branch office or a subsidiary company there. One of the most popular business forms for foreign investors is a subsidiary since, unlike a branch, a Polish subsidiary is a separate company in Poland with full accountability. Additionally, a subsidiary business in Poland may be founded as either a joint-stock company (SA) or a private limited liability company (Sp.z.o.o.).
In this article, we will be covering the procedure for subsidiary company registration in Poland. Along with that, we will also cover the advantages, characteristics, and documentation required for subsidiary company registration in Poland.
Meaning of Subsidiary Company
A firm owned or managed by a parent corporation is referred to as a subsidiary company. The parent firm often owns a majority of the shares in the subsidiary firm. As a result, the parent company gains control over the subsidiary.
In Poland, the subsidiary is usually a limited liability company or a joint stock company that must adhere to all relevant laws and standards on accounting and taxation. Small and medium-sized enterprises are the companies that will probably decide to acquire a subsidiary company registration in Poland.
How to Open a Subsidiary Office in Poland?
Subsidiary company registration in Poland can be done by taking the following actions:
1. Select a name
One of the most crucial steps for subsidiary company registration in Poland is to choose a name for your subsidiary. It’s not necessary for the name to be similar to the name of the foreign enterprise.
2. Prepare the Articles of Association
The second phase of subsidiary company registration in Poland is to draft the articles of association (AOA) of the firm. The AOA must include the name, address, regulations, objectives, shareholder information, and data about the initial shares. All this information must be notarized in Polish.
3. Deposit the share capital
It is necessary to set up a bank account in Poland for the Polish subsidiary where the corporation’s share capital has to be deposited. At least a minimum share capital of 5,000 PLN must be deposited if you are setting up a subsidiary company in the form of a private limited company.
4. Subsidiary company registration in Poland with the National Court Register (KRS)
All businesses must do their subsidiary company registration in Poland by applying to the National Court Register (KRS). Firms can also use an online form on the Ministry of Justice portal for a subsidiary company registration in Poland.
5. Register for tax purposes
Every company that has applied for registration is given a tax identification number (NIP) after applying at a local tax office and also has to apply for VAT registration.
5. Register with the Social Security Agency
Register the business with Social Security and the business will also need to obtain a REGON number.
Documents Required for Opening a Subsidiary Office in Poland
For a subsidiary company registration in Poland, the following documents are essential:
1. The preference of the foreign business to do a subsidiary company registration in Poland.
2. Each holding firm’s designated signatory executes a notarized power of attorney.
3. The Article of Association of the subsidiary company that states the following:
- Name and location of the subsidiary
- Internal policies and goals
- Shareholder’s details along with their capital contribution
- Information about their shares.
4. Bank account details of the subsidiary company.
Characteristics of a subsidiary company in Poland
A subsidiary company has the following characteristics-
- The subsidiary is not required to do business in the same ways as the parent corporation because it is a distinct legal entity with its own legal competence.
- The Polish subsidiary must file a VAT registration since it is a legal entity with the same rights and responsibilities as a local business.
- The subsidiary adheres to the accounting and reporting obligations in Poland.
- The subsidiary must adhere to the rules of Polish taxation. Due to its classification as a locally registered corporation, the corporate income tax will be applied to all of its international income.
- Since the foreign firm often only has access to a particular portion of the shares, it cannot exercise full control of the firm.
Advantages of a subsidiary company registration in Poland
For international companies who decide to start doing business in Poland, subsidiary company registration in Poland is the most common business structure due to the following advantages-
- The primary advantage of subsidiary businesses stems from the concept that they are distinct legal businesses from their parent business.
- The subsidiary and parent businesses can restrict their joint liabilities and responsibilities and would be treated separately for regulatory and tax purposes.
- The parent and subsidiary firms’ potential legal and financial obligations are reduced.
- Parent companies can diversify their operations with the help of subsidiaries while eliminating any associated risks.
- One of the main advantages of a subsidiary company registration in Poland is that the entrepreneur can immediately begin hiring staff, processing payroll, and doing other business operations.
Taxation for a subsidiary company in Poland
The subsidiary company in Poland has to abide by all taxation requirements in a similar manner as compared to a Polish corporation.
Here are the taxation rates in Poland for the year 2024:
- The general rate of corporate income tax is 19%.
- If the taxpayer is a small taxpayer or began its commercial activity, the lower CIT rate of 9% may be taken into account for earnings other than capital gains, given that the founding of the organisation was not the consequence of a merger or transformation during the 1st year.
- The withholding tax on dividends that firms are generally subject to is 19%; however, there are some exclusions.
- The normal rate of value added tax is 23%, but certain goods and services are subject to lower rates of 8%, 5% and 0%.
Conclusion
A lot of foreign entrepreneurs prefer doing a subsidiary company registration in Poland due to the numerous benefits that the structure has to offer. A subsidiary firm is a separate legal entity from its parent companies, enabling autonomous management and liability protection. Companies may develop a local presence, interact with Polish customers, and successfully navigate the market by establishing a subsidiary company in Poland.
In order to do a subsidiary company registration in Poland, you can contact our business formation experts at OnDemand International. Our experienced team will help you in choosing the most suitable structure for your subsidiary, select a name, and further help you in registering your subsidiary in Poland.
FAQ’s
A firm owned or managed by a parent corporation is referred to as a subsidiary company.
The benefits of establishing a subsidiary company are-
- Reduced financial liability.
- Distinct legal entity.
- favorable tax rates.
The documents required to register a subsidiary corporation in Poland are-
- Notarized Power of Attorney
- Articles of Association containing-
- name and location of the subsidiary
- internal policies and goals
- shareholder’s details along with their capital contribution
- information about their shares.
In order to register a subsidiary company in Poland you must follow the steps given below:
- Firstly, you have to execute the article of association of your firms.
- Secondly, you should open a bank account and deposit the necessary minimum capital.
- You can then apply for subsidiary company registration in Poland with the KRS and deposit the necessary capital.
- Lastly, establish a management board and register with the tax authorities.
