Open a Company Branch in Poland
A company branch registered in Poland is a legal unit operating under another, already established business. A company branch is a separate and organizationally independent part of a business activity, carried out by an entrepreneur outside his registered office or main place of business. In the case of opening a branch in a country other than the company’s headquarters, the executive authority is always located in the headquarters. The branch and its representatives operate according to the guidelines provided by the company owner.
By opening a branch of the company in Poland, the entrepreneur does not need to undertake the process of starting a company in Poland, and at the same time expands the company’s development opportunities. The business benefits from opening up to a new group of contractors and additional financial resources from Polish state subsidies and European Union Funds.
In order to open a company branch in Poland, you must register it in the National Court Register and submit the business data to the Tax Office and ZUS.
For tax purposes, a Polish branch of the company operates similarly to a company originally established in Poland. Therefore it must maintain separate accounting and settle taxes in Poland.
Table of Contents
How to open a company branch in Poland?
To open a company branch in Poland, you must perform 5 steps listed below.
- Prepare the necessary documents
- Submit an application to KRS
- Pay the fees
- Complete any gaps
- Report the branch in other offices
Opening a branch of a company instead of starting a company in Poland is not a complicated process. An individual should follow the process of 5 steps or request help from a legal service provider.
1. Prepare the necessary documents
Prepare the necessary documents, which are an excerpt from the register and the founding act of the parent company, an agreement or another document confirming the establishment of the original company abroad. Both of these documents must first be translated or have their existing translation certified by a sworn translator into Polish. The cost of the translation service for these documents depends on the language of the original document. The rate of the translator is approximately PLN 50-120 (€11-26 or $12-28) per one page.
In addition to the translated documents, you should also prepare the address of the person authorized to represent the branch in Poland and a certificate of reciprocity of action from the Polish representative.
Other documents that need to be prepared are a power of attorney and confirmation of payment of the court fee.
2. Submit an application to KRS
Submit an application for entry to the National Court Register (Krajowy Rejestr Sądowy, KRS). From July 2021, only applications submitted electronically via the Court Register Portal will be considered.
The application must be submitted to the competent court corresponding to the place of registration of headquarters of the company’s branch in Poland. The application must be accompanied by the completed documents, i.e. the translated founding act and an excerpt from the register, the address of the branch in Poland, a certificate from the Polish representative on reciprocity of action, a power of attorney and confirmation of payment of the court fee.
The documents should have a trusted or qualified signature or be attached to the online application using the “File containing a separate signature” field in case of signing in person.
The court will consider the application within 7 days from the date of its submission.
3. Pay the fees
Pay the court fees when you file your application. The portal will redirect you to the e-Payments system, where you are able to make a payment by transfer, payment card or BLIK.
The total fees are PLN 600 (€130, or $138) and they concern the court fee for the entry in the amount of PLN 500 (€108, or $115) and the fee for advertising the entry in the Court and Economic Monitor in the amount of PLN 100 (€22, or $23).
4. Complete any missing information
Complete any missing information after receiving a request from the court to remove the deficiencies. In the summons, the court specifies the deadline for removing errors or supplementing deficiencies. Within 7 days of submitting the complete set of documents, the court will reconsider the application.
If the deficiencies are not corrected within the time limit, the court returns the application to the applicant. The company owner then has 7 days to submit a complete application and if they do so, the company will be registered.
5. Report the branch in other offices
Report the branch in other offices after registering the company. The first office to which a branch should be reported is the Tax Office. In the application on the NIP-8 form, you must provide additional information, such as the bank account number, contact details and the planned number of employees. Applications must be submitted within 21 days from the date of entry in the National Court Register.
The second institution is the Social Insurance Institution. If you plan to employ employees in a branch, you must register the company as a payer of ZUS contributions on the ZUS ZPA and ZUS ZBA forms within 7 days from the date of entry in the National Court Register.
What is required to open a company branch in Poland?
To open a company branch in Poland, you must meet the following four conditions.
- Establish or use an already established company in a country that can open a branch in Poland
- Select a branch representative in Poland
- Translate documents
- Submit an application
Establish or use an already established company in a country that can open a branch in Poland, i.e. in one of the European Union or European Economic Area countries. If your country of residence is not on this list, make sure it has reciprocal agreements with Poland allowing you to open a branch office.
Choose a branch representative in Poland if you do not plan to run the branch yourself. The representative will be accountable to the authorities on behalf of the company, but responsibility for his actions rests with the company owner.
Translate the company’s founding act and an excerpt from the register of entrepreneurs from a sworn translator or obtain a certificate from him on already translated documents.
Submit an application for entry in the National Court Register using the Commercial Register Portal. Electronic application carry out and throughout the entire process, it asks you to attach the required documents and make the payment, so the entire registration procedure is completed immediately.
The length of the registration process takes no less than 7 days and will depend on how quickly all the steps are completed and how quickly the court will consider the application.
How long does it take to register a company branch in Poland?
Registering a company branch in Poland takes from 7 days to a maximum of 3 weeks. The duration of registration depends on how quickly the company owner manages to complete all the documents and submit the application to the National Court Register. If a complete set of documents is submitted on the first day, the court has 7 days to consider the application.
The deadline is extended if you are waiting for the translation of the founding act or an extract from the register by a sworn translator, or if the court reports any deficiencies in the application.
What are the benefits of opening a company branch in Poland?
The benefits of opening a company branch in Poland include lower costs compared to establishing a new company, low labor costs, and support from the government in the field of reliefs and subsidies.
Lower costs result from the fact that a branch does not require an initial capital payment, as is the case when starting a new business.
Low labor costs result from the fact that in Poland the minimum wage is PLN 3,600, an equivalent of € 775, or $ 827 from July 2023, while in Germany it is PLN 9,242 (€ 1,987, or $ 2121), and in Spain PLN 4,884 (€1,050, or $1,121). Minimum wage in Poland is therefore low compared to other European countries.
Government support in the field of reliefs and subsidies is a big advantage, especially for newly opened branches in Poland. They benefit from a reduced corporate income tax rate and apply for funding for workplace equipment or the company’s working capital. It is worth checking current forms of support at the Labor Office and the City Hall responsible for the company’s branch office in Poland.
What are the liabilities of a Polish company branch?
The liabilities of a Polish branch are mainly to conduct business in accordance with Polish law. Regardless of the country in which the company is based, the company’s branch in Poland must operate similarly to a company established in Poland. A company branch must keep its own accounting, settle taxes and remuneration in accordance with the provisions of law in Poland. It must also submit financial reports after each year.
The company branch is also responsible for its financial obligations. The company founder is liable before Polish law for arrears in repayment of loans or payment of invoices.
What are the tax rates for a company branch in Poland?
Tax rates for a company branch in Poland range from 0% to 23% and apply to CIT income tax and VAT.
The CIT rate is 19% or 9% if you use a reduced tax rate. New companies benefit from the reduced rate in the first year of opening and in the year following opening. It is also used by companies whose sales in the previous year did not exceed EUR 2 million. Importantly, this applies only to sales in a branch in Poland, because the principle of double taxation does not apply. A branch settling tax in Poland no longer has to settle income obtained in Poland in the country of the company’s headquarters.
If you have several branches of one company in Poland, all of their sales are added up and they can benefit from a reduced CIT rate if the sum does not exceed EUR 2 million in all branches together.
The VAT rate depends on the goods and services that the branch sells or provides.
The 5% rate applies, among others, to: for agricultural products and books. The rate is 8% for construction and renovation works. The 23% VAT rate applies for most goods and services, including: gas, fuel, some food products.
In 2023, the tax rate on basic food products such as milk, flour and bread was reduced from 5% to 0%. Additionally, in 2023 and 2024, the tax was reduced from 23% to 8% for products used in the agricultural industry, e.g. soil improvers.
A branch of a company, just like a subsidiary, must settle taxes in a place dependent on its registered office, not that of the parent company.
Is a company branch the same as a subsidiary in Poland?
No, a branch company and a subsidiary are not the same. A branch office is more dependent on the company’s headquarters than a subsidiary.
The subsidiary is a separate enterprise, has its own management, but is dependent on the parent company. This results from the purchase of part of the shares in the subsidiary by the parent company. The parent company has significant influence on some decisions in the subsidiary, e.g. election of management board members or voting on resolutions, among others. on strategic financial decisions.
The company’s branch does not have its own management board, is fully controlled by the company’s headquarters and does not make most decisions on its own.
Why open a branch and representative office in Poland?
It is worth opening a branch and representative office in Poland for several reasons.
- Favorable business conditions
- Market expansion
- Financial resources and subsidies
Favorable business conditions result from the stable geopolitical situation.
Expanding the market is very beneficial due to Poland’s geographical location. It is located in the center of Europe, therefore a branch in Poland, especially for companies whose headquarters are outside Europe, opens up wide opportunities for expansion to other markets, e.g. German or Czech.
Newly established companies or branches, as well as already developing businesses, can apply for subsidies not only from the Polish government, but also for subsidies from the European Union.