Foreign branch accounting

Foreign entrepreneurs from EU countries and member states of the European Free Trade Agreement (EFTA), wishing to conduct business in Poland, have the possibility to establish a branch of a foreign company in Poland. This is made possible by the Freedom of Economic Activity Act.

What is important, foreign company branch will be subject to exactly the same business rules as Polish entrepreneurs. Such a branch is therefore obliged, among others, to keep accounts in accordance with the provisions of the Accounting Act and to prepare financial statements.

Some of the most important aspects of a foreign company branch, its establishment and the keeping accounts for it:

  1. A branch does not have a legal personality separate from the parent company (parent entity), it can only carry out business activities to the extent that it is carried out by the parent company
    • the name of the branch must be consistent with the name of the parent entity and must include the legal form expressed in Polish language as well as add the phrase “branch in Poland”.
  2. The branch shall have an appointed representative – his/her data should be included in the application sent to the National Court Register.
  3. The branch should have its registered office in Poland with the legal right to it (e.g. lease agreement), it can also be a virtual office.
  4. A foreign company branch in Poland does not need to have accumulated share capital – full responsibility in terms of rights and obligations for the branch is assumed by the parent company.
  5. To set up a foreign company branch effectively, it is necessary:
    • for the parent company to make a decision, e.g. in the form of a resolution;
    • to register a branch in the Polish commercial register (KRS).
  6. Additional paperwork needed to set up a branch:
    • notification of the parent company to the tax office and obtaining a NIP number;
    • notification of the branch to the tax office (in the event that the branch employs staff, the branch must obtain a separate NIP number enabling payment of social security contributions and advance payments of income tax);
    • registration of the parent company as a VAT payer (if the branch intends to carry out activities subject to VAT).
  7. The branch should keep accounts:
    • in Polish,
    • in accordance with the Accounting Act.
  8. The branch pays CIT on income gained in Poland, is a VAT payer and, if it has employees, is a payer of social security contributions and advance payments for income tax for employees as well.

Based on the experience of our clients, while they are usually very well prepared to do business in Poland, they often find it problematic to fulfil all legal and formal requirements.

This is largely due to the need to become thoroughly familiar with Poland’s rather complicated and frequently changing accounting provisions. An additional difficulty for the foreign entrepreneur is the Polish language, which is still predominant in contact with the administration offices. In addition, the challenge is to combine Polish reporting with detailed reporting to the parent company abroad.

For these reasons, many of our clients have chosen to entrust the bookkeeping of their company’s branch to the accounting office Efekta Sp. z o.o. When you opt for our office to provide accounting services for your branch, you receive:

  • accounting carried out by specialists with many years of experience and international expertise,
  • a guarantee of the correctness, compliance with provisions of all accounting operations,
  • punctual filing of the necessary tax returns (PIT, CIT and VAT),
  • English speaking contact person.

What we offer:

  • assistance in setting up the company branch,
  • registration of accounting documents and bookkeeping in accordance with Polish regulations,
  • preparation and submission of JPK VAT returns,
  • current and annual settlement of PIT and CIT,
  • preparing the annual financial statements,
  • filing of returns and all settlements with Social Security Office,
  • personnel and payroll services,
  • management reporting to the parent company,
  • contacting Social Security Office, Statistics Poland, Tax Office on behalf of the client.

Entrust us with bookkeeping of your branch and you will gain time and a guarantee of correctly kept accounts! You will be able to focus on running your business!