Poland: How to set up a branch of a foreign entity

 

In this article,  we would like to introduce the reader to one of the manners of conducting business activity in Poland, i.e. as a branch of a foreign entrepreneur (foreign company, corporation), as well as point out the main issues related to registration of such branch.

Basic principles

First, in general, foreign companies with a registered office in one of the member states of the European Union, are entitled to conduct business activity in Poland on the same terms as Polish citizens and Polish legal entities. This means that foreign entrepreneurs are entitled to employ, conclude contracts as well as sue and be sued.

A foreign entrepreneur in Poland may:

a) conduct business exclusively within the scope of business activity of the foreign entrepreneur;
b) commence conducting business activity after registering the branch in the National Court Register.

The foreign entrepreneur is obliged to:

a) establish a person representing the foreign entrepreneur in a branch of the company;
b) use the original full name of the company with the addition of “oddział w Polsce” (branch in Poland) and the polish legal form of this company in the name of the branch;
c) keep the accounts for the branch of the company separate from the accounts of the foreign entrepreneur;
d) keep such accounts in Polish and in compliance with Polish accounting law;
e) notify the relevant ministry about all changes of factual and legal circumstances within 14 days from their occurrence.

Registration of Branch at the National Court Register 

Form:  The registration is made only on the request of the foreign company. A motion for the entry may be submitted either in official form on paper (form KRS-W10) or where applicable, electronically. The motion shall be filed with the Commercial Division of the District Court.

Fees: the registrant is obliged to pay a court fee in the amount of 500 PLN, and if the entry has to be published, pay for the announcement in Court and Commercial Register in the further amount of 100 PLN.

Process: The motion should be examined by court within 7 days from the submission of the motion. If the motion contains formal defects, the court will return the motion and the petitioner will be entitled to file corrections within 7 days.

In practice, due to the high number of motions in courts, examining the correctly filed motion may take even longer than one month.

Further forms:  apart from the official form, the registrant will need to files further forms such as:

1. The representative of foreign company (KRS-WJ);
2. List of Company’s bodies (KRS-WK);
3. The scope of business activity (KRS-WM);
4. Formal consent of the representative of the foreign company to occupy the position of representative and its address for service in Poland;
5. Notarial deed of the foreign company with certified translation into Polish;
6. Transcript from relevant register of the companies of the foreign company with certified translation into Polish;
7. Confirmation of payment of the fees.

Typical problems:  according to the above list of mandatory attachments to the motion, some issues may cause difficulties in completing the official form:

1. The official form requires the Registrant to specify the Polish equivalent of its type of (foreign) company. This is sometimes troublesome, as some foreign company types do not have Polish equivalents.
2. The company’s Board of Directors/ Management Board (KRS-WK) official form requires specification of the manner of representation of the foreign company. It is common that in different jurisdictions there are different regulations relating to representation of the company which cannot be described easily in a manner that convinces the register court.
3. The scope of business activity of the foreign company form requires specification of the scope of business activity of the foreign company, according to the Polish Classification of Activity. If the scope of activity is not indicated in the excerpt from the register of the foreign company, the board of management of the company has to adopt a resolution establishing and specifying the scope of business activity of the company. This resolution shall be translated into Polish and enclosed to the motion.

To sum up, conducting a business in Poland in the form of a branch of the foreign company is a convenient manner to conduct business in Poland. However, the official form and attachments may give rise to issues that may each prolong the process of registration. Nonetheless this form of conducting business in Poland is worth considering.

Łukasz Kossakowski & Marcin Liszka

 

For further information, contact:  

Łukasz Kossakowski, Partner

Kancelaria Dr Dariusz Kossakowski, Warsaw

e: lkossakowski@kossakowski.pl

t: +48 22 829 46 80