The European Commission recently adopted a directive project aimed at simplifying cross-border operations for companies within the European Union. The new directive is intended to replace the regulations in force since 2017, which have not been fully implemented into the Polish legal system. With the deadlock in the legislative process at the Ministry of Justice, EU officials decided to significantly streamline bureaucracy for establishing a company branch in another EU country.
Thanks to the obligation to place important information about personal or capital groups in the Business Registers Interconnection System (BRIS), which has been operational for some time, company boards will avoid the unpleasant obligation of resubmitting all documents when establishing a branch abroad. Currently, a foreign company that wants to create a branch, representation, or company in Poland must, as a rule, present an officially certified copy from the appropriate register, along with a sworn translation bearing an apostille clause.
The apostille clause is an official certification of the authenticity of a signature on a document, issued by the Ministry of Foreign Affairs. In the case of National Court Register excerpts regarding entrepreneurs, obtaining the signature of a KRS employee is also necessary.
Experts point out that the current requirements significantly prolong the registration process in the KRS. However, the directive project offers hope for improvement. The European Commission’s proposal, which assumes that entries in the register should be made within five working days of submitting the application, should prompt Polish legislators to take steps to solve the current problem of prolonged proceedings in registry courts.
Cost and Procedure Reduction
The current multitude of entrepreneur registers and the diversity of access rules to them (e.g., free, paid, public, requiring registration, exclusively in the language of the Member State, with an additional English version), the need to obtain apostilles (which is often a lengthy process), and the necessity to perform authenticated translations do not promote transparency and competitiveness in the single market. They are also time-consuming and generate significant costs. In the era of ubiquitous digitization, this is unjustified.
According to the European Commission’s estimates, the planned changes will affect approximately 16 million limited liability companies and 2 million personal companies in the EU. By eliminating some procedures and reducing administrative burdens, savings of up to €437 million per year can be achieved.
Multilingual and Unified
Another innovation will be the digitally accessible and free-of-charge multilingual certificate, which will contain all necessary information for company authentication. In addition to the certificate, the directive’s regulations will introduce a uniform digital power of attorney template, enabling the appointment of a company representative to act on its behalf in other Member States.