Branch in Poland
Foreign company may conduct business activity through a dependent Polish company or through a branch of a foreign company in Poland. A branch of a foreign company in Poland constitutes, organizationally and financially, an independent part of the economic activity conducted by a foreign entity on the territory of Poland. A branch must be entered into a Polish Court Register - KRS.
Under Polish provisions of the Freedom of Business Activity Act there are two ways to register a branch of a foreign entrepreneur in Poland - depending upon if a foreign person originates from European Union member states and members of the European Free Trade Association (simplified procedure) or other non-EU or non-EFTA member states (ordinary procedure)
Foreign entrepreneurs from EU or EFTA member states may establish branches of their foreign entities in Poland under the same conditions as the Polish citizens. However, foreign entrepreneurs from non-EU or non-EFTA member states may only open own branch when their state of origin applies reciprocity procedure, that is when a Polish company is allowed to open its branch in the territory of the foreign entrepreneur's country of origin.
During the branch of foreign company registration process in Poland, the subject of the "mother" company's business activity shall be examined. The subject of a branch of a foreign company's business activity may not exceed the scope of the business activity of a foreign company. Therefore, for instance the articles of association of a foreign company with its sworn translation into Polish shall be attached to the registration form to allow the district court to verify the scope of foreign entity's activity. For a branch of a foreign entrepreneur in Poland to enter the register, an indication who shall be authorized to represent the branch is required. It is also required to submit a specimen signature of the said person certified by a notary (Polish consulate) to be a true copy. The person shall be in contact with Polish authorities, i.a. is obligated to inform the Minister of Economic Affairs about an opening of liquidation of a foreign company which has opened a branch or about the loss of a right to conduct business activity in the territory of the country where it's seated.
A branch of a foreign company in Poland shall use the original name with the sworn translation into Polish of its legal form (e.g. MY BUSINESS LLC, Branch in Poland) in the articles of association and other documents. It is worth knowing that a branch of a foreign company in Poland has no legal personality under civil law. The said entity is only a separate organizational and financial unit of a foreign undertaker conducting business activity outside of the location of the foreign undertaker's registered office. Because the branch of a foreign company in Poland has no legal personality, it may not act independently in economic relationships. Agreements between contractors shall be undersigned exclusively in the name and on behalf of the foreign company. Foreign company's branch in Poland is subject to limited tax obligation only under corporate income tax for legal persons. It means that the branch of a foreign entrepreneur in Poland is subject to corporate income tax only on income generated by its branch in the territory of the Republic of Poland. The foreign company's branch in Poland is subject to a Polish VAT registration.
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