Branch vs. representative office

Running a business in Poland by a foreign entrepreneur can have various legal forms. A branch of a foreign entrepreneur and a representative office are concepts that are often used interchangeably. Nevertheless, this is unjustified. What is the difference between a branch of a foreign entrepreneur and a representative office? You will find the answer to this question in the following article.

Table of Contents

• Running a business in Poland by a foreign entrepreneur. Representative office
• Running a business in Poland by a foreign entrepreneur. Branch of a company
• Summary

Representative office

The institution of a representative office is regulated by the provisions of the Act on Rules for Participation by Foreign Entrepreneurs and other Foreign Persons in Trade on the territory of Poland. It provides that a foreign entrepreneur running a business in Poland may choose a form of a representative office. A representative office’s range of activity is limited to marketing and promotion.

Running a business in Poland by a foreigner requires entry into the register of foreign entrepreneurs and representative offices. The Minister in charge of the Economy maintains this register. The registration requirement doesn’t apply to the establishment and operation of a representative office by a foreign bank or credit institution. A filed application and its content are the basis for obtaining an entry in the register. The registration is valid for 2 years. You may extend it for another 2 years by submitting a relevant request. It should be filed within the last 90 days of the entry’s validity. The Act indicated above specifies formal requirements for the application for registration.

According to the provisions, it should be in Polish. Moreover, the following elements must be included:

• the name, registered office and legal form of the foreign entrepreneur,
• the main field of business activity of the foreign entrepreneur,
• the full name of the person authorized in the representative office to represent the foreign entrepreneur,
• the address of the representative office on the territory of the Republic of Poland.

You should enclose the following documents to the application:

1. an official copy of the document confirming the registration of the foreign entrepreneur. This document is a legal basis for conducting business activity.
2. an officially certified document specifying the registered office, representation rules and persons authorized to represent the foreign entity,
3. a document confirming the authorization of the person indicated in the application to represent the foreign entrepreneur in the representative office.

You must submit the above documents in a native language with a Polish translation. Apostille or legalization should be used to certify the foreign entrepreneur’s registration documents.

If the application has formal defects, the minister will call the applicant to correct them. You must correct the deficiencies within a period of no less than 7 days from the date of receiving the notice. If the formal defects are not fixed within that time, the application won’t be processed.

The foreign entrepreneur must have a legal title to the property indicated in the register as the registered office.

The register of representative offices is public. It contains the following information:

– data indicated in the application,

– the entry number,

– the date of registration,

– the last day of validity of the entry, and

– the date of removing the representative office from the register.

The minister issues a certificate to a foreign entrepreneur about making the entry and any further changes. For the duration of the entry’s validity, data on foreign entrepreneurs having businesses in Poland are available. Moreover, they are also accessible for 5 years after the entry’s removal from the register.

Next to formal deficiencies, there are other reasons for refusing entry to the register. The refusal of the entry equals the inability to run a business in Poland by a foreigner. The Minister may deny entry to the register if:

• the creation of the representative office would threaten the security or defense of the state, or the security of classified information with a confidentiality clause of “confidential” statues or higher, or another higher public interest
• the application concerns operations that go beyond advertising or promotional activities.

A foreign entrepreneur with a representative office in Poland has many obligations. He must:

• use the original name of the foreign enterprise with the phrase ‘przedstawicielstwo w Polsce‘ [eng. representative office in Poland],
• keep separate books in Polish, in compliance with the accounting regulations,
• inform the minister of any factual and legal changes within 14 days
• appoint a person authorized to represent the foreign entrepreneur in the representative office

Running a business in Poland by a foreign entrepreneur. Branch of a company in Poland

To run a business in Poland, a foreign entrepreneur can open a branch of a company with its seat in Poland.

A branch is defined in the Act on Rules for Participation by Foreign Entrepreneurs and other Foreign Persons in Trade on the territory of Poland. ‘Branch’ means a separate and independently organized part of business activity. It must be conducted outside the entrepreneur’s registered office or primary location. Thus, it is an entity established to conduct business in Poland by a foreign entrepreneur.

The business activity of the branch may cover only such scope of activities that is conducted by an entrepreneur abroad.

Starting a branch imposes a duty on the foreign entrepreneur to appoint a person to act as his representative.

To conduct a business in Poland in form of a branch, a foreign entrepreneur must first obtain an entry in the KRS.

A foreign entrepreneur who operates as a branch company must:

• use the original name of the foreign entity with its legal form translated into Polish and with the phrase ‘oddział w Polsce‘[i.e. branch in Poland].
• keep separate accounting records in Polish in accordance with the accounting regulations.
• notify the minister about changes in the factual and legal situation within 14 days.

Summary

A representative office and a branch of a company are different forms of conducting business in Poland by a foreign entrepreneur. The first one relates to units engaged in advertising and promotion. The second one deals with economic activity and distribution.

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