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Opening a Branch vs. a Subsidiary in Poland

Opening a Branch vs. a Subsidiary in Poland

Poland is an attractive option for foreign business owners. When choosing to establish an office for a foreign company in Poland, entrepreneurs can choose between a branch and a subsidiary in Poland. Business entities from other EU member states enjoy the same right for establishing businesses as Polish citizens.

Our Polish law firm can help you choose the best business form for your company. Subsidiaries and branches each have their own advantages and it is best to seek professional assistance when deciding to invest in Poland.

The main particularities of subsidiaries andbranches in Poland are presented below:

The following table summarizes the main issues that should be taken into consideration when choosing between a branch and a subsidiary in 2024.

Quick Facts  
 Minimum share capital – branch 0 PLN 

Minimum share capital – subsidiary 

 5,000 PLN

Time frame for incorporation – branch 

2 weeks 

Time frame for incorporation – subsidiary  1 month 
Legal representative   – branch 

Polish lawyers;
Director or manager;
Any other authorized officer of the company   

 Legal representative  – subsidiary

Legal representatives from Polish law firms;
Director or manager;
Any other authorized officer of the company   

 Corporate tax rate in Poland 
(for both)


 Local bank account for both (YES/NO)


 Liability of the parent company – branch

The Polish branch's debts and liabilities are entirely the responsibility of the parent company 

 Liability of the parent company – subsidiary To the degree of ownership of the capital in the company 
 Advantages – branch

No legal personality;

The parent company is fully liable for the actions of its branch in Poland;

Setting up a branch in Poland is easier and quicker than a subsidiary;

Operates within the objectives of the foreign parent company;                     

 Distinct and standalone part of the company operating in a different country. 

Advantages – subsidiary  

 Independent of the foreign parent company;

Handled like any other company in Poland;

Responsible for its business operations in Poland.

 Documents for opening a branch  in Poland

The name and address of a person authorized to represent the entrepreneur;

  Notarized specimen signature, copies of the entry in the register or foundation act/articles of association with certified translations into Polish;

Payment of registration fees;  

Applications for state statistical and tax identification numbers. 

 Documents for opening a subsidiary in Poland

Opening a subsidiary in Poland requires an excerpt from the local company listing authorized signatories (legalized or apostilled)  

Power of attorney from a Polish law firm signed by the authorized signatory of each parent company (legalized or apostilled) 

 Possibility of hiring local staff for both (YES/NO) YES 
Management for branch (Local/Foreign)  Foreign 
 Management for subsidiary (Local/Foreign) Local 
 Branch best used for  Companies who wish to establish a physical presence in a new location without creating a separate legal entity
best used for
 Companies who wish to establish a new business or expand into a new market without assuming all of the legal and financial risks of the parent company

These two forms of doing business have their own advantages and investors may find that one of them is more suited to their needs. Our team of attorneys in Poland discusses the advantages of both the branch and the subsidiary below.

The advantages of a subsidiary in Poland

The subsidiary is the most popular business form for foreign entities that choose to begin doing business in PolandSubsidiaries are legal entities that usually are set up as a Polish limited liability company (sp. z.o.o.). The Polish subsidiary is a distinct company in Poland that bears full liability, as opposed to a branch. This form of business entity is recommended for foreign companies that want to limit the liability of their Polish operations. The Polish company will bear full liability for its assets in Poland and the mother company will not have to deal with eventual losses.

In order to create a subsidiary in Poland, the foreign business entity will have to invest in the minimum share capital for a Polish limited liability company (5,000 PLN). After it becomes operational, the Polish subsidiary will have to observe all the regulations regarding taxation in Poland and other provisions included in the Polish company law. The liability of the shareholders is limited to the amount invested in the company’s share capital. Our Polish lawyers can help you incorporate a subsidiary in Poland in 2024.

The advantages of a branch in Poland

As opposed to the subsidiary, a branch in Poland and in any other jurisdiction does not have legal personality. Although this means that the foreign legal entity bears full liability for the branches’ actions, this form of business entity is easier to set up and can commence its activities faster. The foreign entity needs to appoint a representative for the Polish branch.

Branches in Poland operate within the objectives of the mother company and are essentially a distinct and standalone part of the company, operating in a different country. Our law firm in Poland can offer you detailed information about Polish legal entities.

Branch registration in Poland

The company formation procedure for a branch is slightly different from that of a subsidiary. First of all, the latter is registered just like a resident company, for example, a private limited liability company. It is subject to the same steps, outlined below by our lawyers in Poland.

The general requirements for opening a branch in Poland include the following:

  • Location details: upon registration, the branch representatives will offer information on the address and the registered place of business.
  • Company details: these are the details about the foreign company, including but not limited to the names of the directors, the members of the Management Board and the Supervisory Board, for those companies that have one.
  • Representative details: personal information for the individual assigned as the branch representative in Poland.
  • Scope of business: details about the branch’s activities in the country according to the local classification of business activities (the NACE classification). 
  • Documents: the foreign company needs to submit a decision for the establishment of the branch as well as the decision to appoint the respective branch manager.

The incorporation documents for the branch will also include the certified copy of the foreign company’s Articles of Association as well as an excerpt from the register in the country where the foreign company is registered. These documents need to be provided as a sworn translation into Polish and the translated Articles of Association need to be certified by a Polish notary. 

The translation of the foreign company’s Articles of Association, as well as the excerpt from the trade register in the company’s country of origin, are mandatory for the registration of a branch.

One of our attorneys in Poland can provide investors with more details about the requirements for branch registration.

Subsidiary registration in Poland in 2024

The subsidiary can be incorporated as a limited liability company. There are two types of corporations in Poland, the joint-stock company as well as the private limited liability company. The latter is the most commonly used business form, both by local investors and foreign entrepreneurs and it is suitable for starting a subsidiary.

Below, our team of Polish lawyers describes the main steps for opening a limited liability company, the Sp.z.o.o.:

  1. Choose a name: the Polish company needs to have a name and for the subsidiary, it does not need to be the same as in the case of the foreign company.
  2. Draft the company documents: the Articles of Association are required for the subsidiary as it is independent of the parent company; the foreign company’s Articles will not be used.
  3. Execute the documents: the Articles of Association will need to be executed in front of a Polish notary public. 
  4. Submit the capital: the Sp.z.o.o has a minimum share capital of 5,000 PLN and this needs to be submitted into a bank account opened for this purpose.
  5. Register: finally, the company is registered with the Company Register and once the registration certificate is issued, it can start its business activities. 

After registration, the limited liability company is registered with the Company House and receives the KRS number; it also receives the NIP or tax identification number and it becomes a registered taxpayer, it obtains the statistical number (the REGON number) and finally it will be registered with the Social Security Agency (a mandatory step for hiring employees in the country).

Both the branch and the subsidiary are suitable options for corporate expansion to Poland in 2024. Our team of lawyers can assist you as needed and handle part of the incorporation procedures in your name, if you are unable to travel to the country or if certain travel restrictions are in place. We can help assist foreign investors by making part of the needed submissions via a power of attorney.

Subsidiary and branch taxation in Poland

The principle for taxation in Poland is territorial, meaning that resident companies are taxed on their worldwide income while non-resident companies only on their Polish-sourced income. For the purpose of taxation, a company is considered a resident one if its place of management or registered seat is located in the country (not applicable to branches).

The usual corporate income tax rate in Poland is 19% and a lower rate of only 9% can apply to certain types of income (except for capital gains) for small companies and companies that start their business activities with no more than 2 million PLN in revenues for that given year (subject to certain exemptions). 

One of our tax lawyers in Poland is able to give you more details about the taxation regime in the country as well as the applicability of the double tax treaties and the EU Parent-Subsidiary Directive, adopted in all of the EU states. 

Poland is an attractive location for foreign investors who may choose to open either branches or subsidiaries. The following statistics highlight the foreign direct investment values in recent years:

  • in May 2019, foreign direct investment in Poland increased by 774 million USD.
  • in April 2019, the recorded value was 334 million USD.
  • in March 2019, the country’s nominal GDP had a value of 137.3 billion USD;
  • exports increased by 22.7% in 2022, compared to 2021, and Poland has also seen an increase in imports (by 30.1%, on the same year-on-year basis);
  • between January and November 2022, the exports in EUR amounted to 315.5 bn, while imports amounted to EUR 333.1 bn; the largest increase in exports for the analyzed period (January-November 2022) was for mineral fuels, lubricants, and related materials;
  • Germany remains one of the most important foreign trade partners, with both imports and exports within the EU recording the largest value with this country; other notable trade partners also include European countries such as France and the United Kingdom for exports and China is also included in the top three countries of origin for imports.

The Polish Economic Institute also offers information about the country’s more recent economic evolution. Thus, in 2023, Poland’s GDP recorded a growth of 0.3%, in line with the other EU countries. Moreover, it is expected that the economic growth for 2024 will be approximately 2.3%. In general, it is expected that Poland’s economic growth will accelerate over the next two years, as it will in the rest of the European Union.

According to Statistics Poland, the REGON register had a total of 5,155,273 registered entities at the end of January 2024. Out of this total, 34,536 were newly registered entities. Compared to December 2023, there were 30% more registrations and natural persons were the most commonly registered type of entity in January.

Please contact our attorneys in Poland if you want to open a branch or a subsidiary in 2024. We can help you with various legal issues and help you run your business in Poland. Our Polish lawyers specialize in various legal issues and can help you with any legal matter if you are interested in investing in Poland.