A branch office vs subsidiary in Poland is a choice between a lack of legal separation and a fully independent entity. A branch is merely an extension of the parent company. A subsidiary, usually an LLC, has its own legal personality, assets, and separate business risk.
What exactly is a branch of a foreign company in Poland?
A branch of a foreign company in Poland is an independent organizational part of a business conducted by an entrepreneur outside their main headquarters.
The branch does not have its own legal personality. The foreign parent company bears full responsibility for its obligations. The scope of the Polish facility’s activity must be entirely identical to the parent company. Registration requires an entry in the Polish National Court Register (KRS).
The operation of such units is precisely regulated by the Act on the rules of participation of foreign entrepreneurs. These provisions impose a strict formal framework. The headquarters must translate its corporate documents into Polish. Sworn translations of the articles of association are mandatory in the registry court.
In return, the foreign entity gains a Polish NIP (tax number) and REGON (statistical number). This allows for easy invoicing of local contractors. It also enables the legal hiring of Polish employees. However, all contracts signed by the branch directly burden the parent company’s account.
What characterizes a subsidiary under Polish law?
A subsidiary is an independent commercial law entity, most often a limited liability company (sp. z o.o.), in which the foreign parent holds most or all shares.
Such an entity has full legal personality under Polish regulations. It is liable for its debts only up to the value of its own assets. The statutory share capital of a Polish LLC is a minimum of 5,000 PLN. The foreign owner only risks the financial contribution made.
From our experience at Progress Holding, asset security is what most often prompts investors to choose this form. Protecting global capital from local claims is a priority. A subsidiary creates a solid legal shield. Any business failure in Poland does not threaten the foreign headquarters.
A subsidiary can conduct any business activity. It does not have to match the parent company’s profile. This allows for flexible exploration of new markets. However, it requires appointing a Polish management board and having a separate registered office address in Poland.
Branch office vs subsidiary in Poland — what are the tax differences?
A branch pays Polish CIT only on income generated in Poland, while a subsidiary, as a Polish tax resident, pays CIT on its total global income.
Both legal forms are subject to the same standard income tax rates. In 2026, the CIT rate is 9% for small taxpayers and 19% for other companies. Differences arise when analyzing international cash transfers. They require precise accounting evaluation.
The key difference concerns the distribution of generated profits. A branch does not pay a classic dividend to the parent company. Transferring profit to the foreign headquarters is an internal transfer. Such an operation is not subject to withholding tax (WHT). The money circulates within one legal entity.
In our clients’ practice, we most often see that the lack of withholding tax is the main financial argument for multinational corporations. A subsidiary, on the other hand, must collect and pay withholding tax when paying dividends abroad. The standard WHT rate in Poland is 19%.
This fiscal burden can be reduced. EU directives or bilateral double taxation avoidance agreements are used for this. Progress Holding optimizes such structures. We provide tax advisory that protects foreign investors from paying double taxes. Detailed rates can always be found on biznes.gov.pl.
What is the registration process and costs for both forms in 2026?
Registering a branch requires submitting translated documents of the foreign company to the KRS, while setting up a subsidiary relies on signing a new company agreement and forming a Polish entity.
The court fee for entry into the National Court Register and publication in the Court Monitor is 600 PLN in both cases. However, the hidden preparatory costs differ. A branch generates huge costs for sworn translations. Every foreign statute, registry extract, and resolution must be certified.
Submitting a branch application usually takes several weeks. The Polish court must meticulously analyze the original foreign legal acts. The process of creating an LLC is much faster. You can register a new subsidiary traditionally at a notary’s office or electronically via the S24 system.
We offer comprehensive LLC registration services at Progress Holding. We take over all contacts with Polish authorities. We help obtain a PESEL number for foreign board members. Check our transparent pricing on progressholding.pl.
What are the accounting requirements for a branch and an LLC?
Both a branch of a foreign entrepreneur and a subsidiary must keep full accounting in Polish and in Polish currency, according to the national Accounting Act.
A branch must precisely separate its economic events in the books. The Tax Office must easily determine the actual income achieved in Poland. This often requires adapting the foreign chart of accounts to Polish standards. Costs allocated from headquarters are subject to strict limits.
A subsidiary acts as a separate payer. It keeps independent accounting books. Both forms must prepare an annual financial statement in XML format. Then, the board digitally signs them and sends them to the KRS Financial Documents Repository.
At Progress Holding, we provide professional accounting services for entities with foreign capital. We perfectly know the guidelines of Polish and international reporting standards. We guarantee the accuracy of your unit’s settlements in Poland.
What are the rules for appointing representation in Poland?
A branch must appoint a person authorized to represent the foreign entrepreneur in Poland, whereas a subsidiary must appoint a full-fledged management board representing the entity externally.
The person representing the branch must have an address for service in Poland. Their data appears in the Polish KRS register. They handle receiving official correspondence and daily management. However, they do not have the same competencies as a company’s board.
The subsidiary’s board can freely make declarations of will, take out loans, and sign multi-million contracts. Board members can be foreigners. They do not have to reside permanently in Poland. Polish law gives a lot of operational freedom here.
We have conducted hundreds of such processes and know that the lack of Polish electronic signatures blocks the actions of foreign directors. An e-signature is essential for communication with the Polish administration. We help managers quickly obtain the appropriate cryptographic certificates.
How to directly compare a branch and a subsidiary?
The table below presents a direct comparison of the main legal, organizational, and tax differences between a branch and an LLC under Polish regulations for 2026.
| Business feature | Foreign company branch | Subsidiary (LLC) |
|---|---|---|
| Legal personality | None (unified with HQ) | Full legal separation |
| Financial liability | Parent company (unlimited) | Subsidiary (up to its assets) |
| Share capital requirement | No statutory requirement | Minimum 5,000 PLN |
| Scope of activity | Identical to parent company | Any legal activity |
| CIT tax (Poland) | Only on Polish income | On global income |
| Withholding tax (WHT) on profit | Not applicable (internal transfer) | Yes (on paid dividends) |
How does it look in practice? Progress Holding experience
Based on the analysis of over 500 investment processes conducted by Progress Holding, foreign tech corporations more often choose branches, while trading companies establish LLCs.
This stems directly from a different risk profile. The IT industry and software houses generate lower operational risk towards local suppliers. They mainly care about hiring Polish programmers. The lack of withholding tax when transferring funds from the branch to HQ is extremely beneficial for them.
On the other hand, trading, logistics, and manufacturing companies need a protective shield. A subsidiary creates a solid buffer. It cuts off the risk of consumer or customs claims from the foreign shareholder’s assets. It also builds greater trust with local banks when applying for Polish financing.
We always examine the client’s individual situation. Choosing a legal form is an important strategic decision. A bad legal model at the beginning means high restructuring costs in subsequent years of operation.
Frequently asked questions
Does a branch of a foreign company in Poland have its own NIP and REGON?
Yes. A branch of a foreign company in Poland always receives a unique Polish NIP and REGON number. They are absolutely required for settlements with the tax office and for registering Polish employees with the social security system (ZUS).
Does a foreign company need to have specific capital for a Polish branch?
Polish regulations do not require allocating a specific share capital for a branch. The foreign company simply provides the branch with current funds necessary to cover bills in Poland. Registering an LLC, however, requires a minimum deposit of 5,000 PLN.
Who is liable for the tax debts of a Polish branch?
The foreign parent company bears full responsibility for the tax arrears and commercial liabilities of the branch. It is liable with its entire global assets. The Polish tax office has the right to pursue claims directly from the headquarters.
Can a subsidiary with foreign capital employ foreigners?
Yes. An LLC is treated as a full-fledged Polish business entity. It has the same rights as companies with domestic capital. It can freely legalize the stay and employ citizens of third countries based on declarations and work permits.
A decision regarding a branch office vs subsidiary in Poland defines the entire future of your business. A branch guarantees smooth cash transfer, but it is a separate LLC that protects the global assets of the foreign headquarters. Carefully analyze your operating model and investment risk. Do you need professional advisory support? Contact us at Progress Holding at +48 603 232 418 or email office@progressholding.pl.
