How to open a business or subsidiary in Poland

Any entrepreneur would like to do business in the environment without corruption, excessive bureaucracy and barriers set by the government. No wonder why many investors decide to open new companies in Poland. The state offers convenient conditions for local and foreign businessmen and guarantees equal opportunities for everybody. Besides, its economy continues growing despite financial turbulence in EU and other states around the globe.

If a foreigner intends to start a firm in Poland, he can choose the type of enterprise for his business. Majority of investors choose to incorporate an LLC because of the benefits they get and also the ease of registration. Other types include JSCs and partnerships.

It is also possible to register a branch, establish a subsidiary in Poland or set up a representative office of a foreign company. All of them have advantages and you must pick the one which suits your business better.

Important: There are a few differences in the registration procedure for individuals coming from EU and non-EU countries. However, once the incorporation process is over, all businessmen face the same principles and enjoy equal possibilities.

Branch vs subsidiary in Poland

Both types of companies differ in several ways. For instance, unlike a branch which has no legal personality, a subsidiary is self-dependent. It bears responsibilities similar to any other Polish enterprise, while responsibility for a branch lies on the parental firm.

To set up a branch, it is necessary to appoint an agent who acts in the name of the foreign company. However, this individual cannot be a decision maker which is a privilege of the Board of Directors. There is no similar requirement to a subsidiary; it makes decisions itself.

Also, a subsidiary must possess a unique title (a branch bears the same title as the parental company). Abbreviation “spolka z o.o” should follow the title.

Despite the fact that registration of a subsidiary in Poland takes more time and it is more complicated, owners of small and middle business prefer a subsidiary to a branch because of its independence and easier management system.

Subsidiary formation in Poland – setting up a new enterprise

Foreign entrepreneurs willing to set up a legal entity in Poland must acknowledge themselves with the Polish regulations to avoid unpleasant surprises when registering and operating the firm.

Since a subsidiary is registered as a limited liability company, it should follow similar regulations as other enterprises of this kind and a subsidiary registration in Poland is also similar.

1. Drafting the Articles of Association. It is the statute which should include its name, objectives, data about shareholders, their initial shares etc. It must be done in Polish and signed by a notary.

2. Depositing at least 5,000 zlotys as a share capital in a bank. Note that the whole capital or some contributions can be paid “in kind” but it is not required to provide an evaluation of the value by a specialist. The least value of each share should be 50 zlotys.

3. Registering the subsidiary in the National Court Register. The procedure is simple: you must submit an application form which can be received in the chosen court. Also, an online form is available on the website of the Ministry of Justice. Make sure you pay all the fees before applying. The court will review your application for about two weeks.

4. Making a record about the new LLC in the Register of National Economy Entities. Visit the office located in the territory where your enterprise is situated and get a REGON number there.

5. Receiving NIP and VAT numbers in the tax office located in the same territory as your firm. You may skip VAT registration if your subsidiary will run business which is not subject to VAT.

6. Making a record about the new legal entity in the Social Insurance Office (ZUS). This step can be performed a week after your firm starts working.

Important: opening a subsidiary in Poland requires leastways a shareholder and a manager. However, this may be one individual.

Note that Polish legislation allows turning a branch into a subsidiary if the parental enterprise is willing to transfer shares and change its type of business. Contact our lawyers to get more information about this.

If you are not sure what type of legal entity to choose or need assistance during the incorporation process, contact us. Our lawyers have an extensive experience in serving foreign investors working in Poland. We are ready to guide you through the whole process of formation of a subsidiary in Poland. Let us know that you need help and enjoy the top-quality legal support of your business endeavors.