Doing business in Poland – subsidiary vs. branch in Poland

Doing business in Poland – subsidiary vs. branch in Poland
Jakub Chajdas

Jakub Chajdas

Partner / Attorney-at-law

Every year more and more foreign entrepreneurs decide to start a business in Poland. In the first place, it seems natural to register a new commercial company for this purpose. But there are also other options worth considering. Earlier, we discussed the representative office in Poland and the subsidiary. Today we will focus on the company’s branch and unit in Poland.

Branch of a foreign company in Poland – how is it different from a subsidiary in Poland?

An entrepreneur who wants to run a business in Poland may choose between a branch or subsidiary.

The Act on the rules of participation of foreign entrepreneurs and other foreign persons in the economic trade on the territory of Poland defines the branch of the company. Article 3(4) of the Act says that it is an organisationally independent part of a business. It is performed outside the company’s main place of conducting business. The entrepreneur opens the branch to conduct business in another location. Not only in the country but also abroad.

A foreign entrepreneur who wants to open a branch in Poland may conduct business only to the extent that he conducts it abroad. The operations of the branch in Poland are broader than in the case of the representative office.

A foreign entrepreneur must appoint a person authorised to his representation in the branch.

One must register the branch in the National Court Register to start a business.

A subsidiary, on the other hand, is a separate, independent legal entity.

The specifics of a branch in Poland

A foreign entrepreneur who established company’s branch in Poland must:

  • use the original name of the foreign entrepreneur with its legal form translated into Polish and with the phrase “branch in Poland”
  • keep separate accounting records in Polish in accordance with the regulations,
  • notify the minister about changes in the factual and legal situation within 14 days.

Local unit of a foreign company in Poland

In the public space, you may have also heard the terms local business unit. The Polish legal system does not define the term “local business unit”. In common understanding, it refers to the local unit of a company. Such an entity is dependent and connected by statute to a parent company. It has its own structure and conducts a specified business activity. By definition, the concept is identical to the company’s branch in Poland. You can use these phrases interchangeably. Both refer to a business entity that is active and that provides specified services. These can go beyond marketing and promotion (contrary to a representative office).

If this article was interesting for you and you want to know more on the topic it concerned we encourage you to contact us. Specialists from our law firm in Poland, Warsaw, will  be happy to help. If you are interested in company registration in Poland visit our dedicated landing page.

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Jakub Chajdas

Partner / Attorney-at-law

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