How to Setup a Subsidiary in Poland: Complete Guide

Poland, as a thriving economy in the center of Europe, provides a welcoming atmosphere for international firms. Setting up a subsidiary in Poland can help businesses obtain access to the European Union (EU) market, take advantage of advantageous business rules, and tap into a qualified workforce. This article will walk you through the process of establishing a subsidiary in Poland, including the definition, registration requirements, necessary documentation, and benefits.

What is a subsidiary in Poland?

A subsidiary in Poland is a legal entity established by a parent company, usually located in another country, to conduct business operations in Poland. The subsidiary operates independently, with its own legal standing, while still being controlled by the parent company. It can engage in activities such as trade, manufacturing, or providing services, and is subject to Polish laws and regulations.

The most common form of subsidiary in Poland is a limited liability company, known as a spółka z ograniczoną odpowiedzialnością (sp. z o.o.).

What are the steps to establish a subsidiary in Poland?

The required steps you need to follow in order to establish a subsidiary in Poland are:

• Choose the Business Structure: Decide on the type of subsidiary to establish. Most foreign companies opt for an sp. z o.o. due to its simplicity and limited liability for shareholders.
• Reserve the Company Name: Ensure the subsidiary’s name is unique and complies with Polish naming regulations.
• Prepare the Articles of Association: Draft and notarize the company’s Articles of Association, which outline the company’s purpose, structure, and operational framework.
• Obtain a Business Address: Register a physical address in Poland, as this will serve as the subsidiary's official headquarters.
• Open a Bank Account: Set up a corporate bank account in Poland to deposit the initial share capital (minimum PLN 5,000 for an sp. z o.o.).
• Register with the National Court Register (KRS): Submit the necessary documents to the KRS to obtain a company registration number. This step officially establishes the subsidiary as a legal entity.
• Register for Tax Purposes:Obtain a Tax Identification Number (NIP) and a VAT number for conducting taxable activities.
• Enroll in the Social Insurance Institution (ZUS): If the subsidiary will have employees, it must register with ZUS to comply with social security obligations.

What are the documents required to register a subsidiary in Poland?

The following documents required to register a subsidiary in Poland are:

• Articles of Association: A notarized document outlining the subsidiary’s structure and operations.
• Proof of Parent Company Registration: Certificate of incorporation or equivalent from the parent company’s home country.
• Director Information: Identification documents of the subsidiary’s appointed directors and shareholders.
• Proof of Registered Address: Lease agreement or ownership document for the subsidiary’s office.
• Bank Statement: Proof of initial share capital deposit in a Polish bank account.
• Tax Forms: Necessary documents for tax registration with the Polish tax authorities.

What are the advantages of setting up a subsidiary in Poland?

• Access to EU Markets: As an EU member, Poland offers seamless trade opportunities within the single market.
• Cost-Effective Operations: Poland’s competitive labor costs and favorable tax environment make it an attractive destination for businesses.
• Legal Independence: A subsidiary is a separate legal entity, protecting the parent company from liabilities incurred by the subsidiary.
• Skilled Workforce: Poland boasts a well-educated workforce, particularly in engineering, IT, and manufacturing sectors.
• Incentives for Foreign Investors: Businesses may qualify for government incentives, such as tax breaks or grants, in certain industries and regions.

Which is better “New Company vs. Subsidiary” in Poland?

The choice between a new company and a subsidiary in Poland depends on your business goals. A new company is ideal for independent operations with local focus, providing complete autonomy and simplified taxation. However, it lacks direct alignment with parent company strategies. A subsidiary, while more complex to set up, is a separate legal entity under the parent company’s control, offering liability protection and potential tax benefits through double taxation treaties. Subsidiaries are better suited for global integration, leveraging parent resources while limiting risk exposure. For multinational expansion, a subsidiary is often the preferred option, offering strategic and operational advantages.

Conclusion

Establishing a subsidiary in Poland is a strategic move for businesses looking to expand in the EU market. While the process involves several steps and documentation requirements, the benefits of operating in Poland far outweigh the complexities. By understanding the registration process, required documents, and advantages, businesses can make informed decisions and set up their operations smoothly.

If you’re considering expanding into Poland, consulting with OnDemand International’s local legal and tax experts can ensure compliance and streamline the process. With the right approach, your subsidiary can serve as a gateway to success in the European market.