{"id":3975,"date":"2023-09-26T11:59:56","date_gmt":"2023-09-26T11:59:56","guid":{"rendered":"https:\/\/sawaryn.com\/?p=3975"},"modified":"2026-10-23T08:13:15","modified_gmt":"2026-10-23T08:13:15","slug":"company-or-branch-business-in-poland","status":"publish","type":"post","link":"https:\/\/sawaryn.com\/en\/publikacje\/company-or-branch-business-in-poland\/","title":{"rendered":"Company or Branch: Starting a Business in Poland"},"content":{"rendered":"<p>Are you a foreign national planning to do business in Poland? You can choose from three main forms: a <strong><a href=\"https:\/\/sawaryn.com\/en\/publications\/a-limited-liability-company-the-most-important-information\/\">limited liability company (sp. z o.o.)<\/a><\/strong>, a <strong>simple joint-stock company (P.S.A.)<\/strong> or a <strong>branch of a foreign business<\/strong>. Each has different registration procedures, costs, liability and operating flexibility. The comparison below can help you decide.<\/p>\n<hr \/>\n<h2>What we compare and how to choose<\/h2>\n<p>The right legal form depends on how you want to conduct business in Poland: whether you are setting up a new entity or expanding an existing foreign company.<\/p>\n<p>For each of the three forms, we compare:<\/p>\n<ul>\n<li>the entity\u2019s registration procedure<\/li>\n<li>the documents required for registration<\/li>\n<li>the amount of share capital<\/li>\n<li>the company\u2019s governing bodies<\/li>\n<li>ongoing requirements for operating the company or branch<\/li>\n<li>forms of taxation<\/li>\n<li>opportunities to obtain financial support<\/li>\n<li>advantages and disadvantages of each business form<\/li>\n<\/ul>\n<p><strong>Decision rule:<\/strong> If you want to run an independent business in Poland, consider a limited liability company or a P.S.A. If you want to expand an existing foreign company without creating a new entity, consider a branch of a foreign business.<\/p>\n<hr \/>\n<h2>Limited liability company (sp. z o.o.)<\/h2>\n<h3>Who a limited liability company suits<\/h3>\n<p>A Polish limited liability company is the most popular type of company with share capital in Poland. It can work well if you want to:<\/p>\n<ul>\n<li>retain direct oversight of the company\u2019s management<\/li>\n<li>limit your financial risk to the amount of your contribution<\/li>\n<li>conduct business for any purpose permitted by law<\/li>\n<\/ul>\n<h3>Who can form a limited liability company<\/h3>\n<ul>\n<li>One or more shareholders.<\/li>\n<li>Founders may be natural persons or legal entities, regardless of citizenship or place of residence.<\/li>\n<li><strong>Restriction:<\/strong> a limited liability company may not be formed solely by another single-member limited liability company.<\/li>\n<\/ul>\n<h3>Share capital<\/h3>\n<p>The minimum share capital is <strong>PLN 5,000<\/strong>.<\/p>\n<h3>Limited liability: how it works in practice<\/h3>\n<p>The shareholders\u2019 liability is limited to the value of their contributions. This means:<\/p>\n<ul>\n<li>anything a shareholder contributes to the company, whether money or a non-cash contribution, becomes the company\u2019s property<\/li>\n<li>if the company becomes insolvent, a shareholder is not personally liable for the company\u2019s obligations with their personal assets<\/li>\n<li>the shareholder\u2019s risk is that they may not recover their contribution if the company becomes insolvent<\/li>\n<\/ul>\n<hr \/>\n<h2>Simple joint-stock company (P.S.A.)<\/h2>\n<h3>Who a P.S.A. suits<\/h3>\n<p>The P.S.A. is a legal form introduced on 1 July 2021 by an amendment to the Commercial Companies Code. It was designed for <strong>startups and companies seeking growth through external investment<\/strong>.<\/p>\n<p>Choose a P.S.A. if:<\/p>\n<ul>\n<li>you plan to raise capital from external investors<\/li>\n<li>you want to <strong><a href=\"https:\/\/sawaryn.com\/publikacje\/jak-zalozyc-prosta-spolke-akcyjna\/\">set up and run a company at low cost<\/a><\/strong><\/li>\n<li>you need flexibility in the shareholding and contribution structure<\/li>\n<li>one shareholder will contribute <strong><a href=\"https:\/\/sawaryn.com\/publikacje\/wnoszenie-pracy-lub-uslug-jako-wkladu-do-prostej-spolki-akcyjnej\/\">work instead of money<\/a><\/strong><\/li>\n<\/ul>\n<h3>What a P.S.A. has in common with other companies<\/h3>\n<p>A P.S.A. combines features of three company forms known in Poland:<\/p>\n<ol>\n<li><strong>Limited liability company<\/strong>: similar management and liability rules.<\/li>\n<li><strong>Joint-stock company<\/strong>: issuing shares makes it possible to raise capital quickly.<\/li>\n<li><strong>Partnership<\/strong>: a contribution may take the form of work, which is not permitted in a limited liability company or a standard joint-stock company.<\/li>\n<\/ol>\n<h3>Main advantages of a P.S.A.<\/h3>\n<ul>\n<li><strong>Low setup and operating costs<\/strong>, with simpler rules than for a joint-stock company.<\/li>\n<li><strong>No requirement to appoint a board of directors<\/strong> or have financial statements audited by a statutory auditor.<\/li>\n<li><strong>Fast investment and return of funds<\/strong>: capital contributions and payments to and from investors are simple and quick.<\/li>\n<li><strong>Fewer formalities<\/strong>: shares can be transferred electronically, and not every change to the company\u2019s articles must be registered with the National Court Register (KRS).<\/li>\n<li><strong>Work as a contribution<\/strong>: one shareholder can contribute money and another work. This option had been missing from the startup market.<\/li>\n<\/ul>\n<h3>Founder shares: protection against dilution<\/h3>\n<p><strong><a href=\"https:\/\/sawaryn.com\/publikacje\/prosta-spolka-akcyjna-dla-startupu-akcje-zalozycielskie\/\">Founder shares<\/a><\/strong> are a preferential mechanism available in a P.S.A. They work as follows:<\/p>\n<ul>\n<li><strong>They cannot be diluted below a specified threshold.<\/strong> A new share issue cannot breach the agreed minimum ratio between votes attached to preferred shares and all shares in the company.<\/li>\n<li>If a new issue would breach that ratio, the voting rights attached to founder shares increase automatically.<\/li>\n<li>Founder shares may be issued <strong>when the company is formed and later during its operations<\/strong>.<\/li>\n<\/ul>\n<p><strong>When this can help:<\/strong> If you are raising external funding and want to retain control of the company, consider issuing founder shares.<\/p>\n<hr \/>\n<h2>Branch of a foreign business<\/h2>\n<h3>Who a branch suits<\/h3>\n<p>A <strong><a href=\"https:\/\/sawaryn.com\/en\/publikacje\/company-or-branch-business-in-poland\/\">branch of a foreign business<\/a><\/strong> is an option for foreign entrepreneurs who want to operate in Poland <strong>without setting up a new, separate legal entity<\/strong>.<\/p>\n<p>Choose a branch if:<\/p>\n<ul>\n<li>you already operate a company abroad and want to expand into Poland<\/li>\n<li>you want to save time and capital on registration<\/li>\n<li>you intend to operate in Poland <strong>only within the scope of the foreign company\u2019s business<\/strong><\/li>\n<\/ul>\n<h3>Limits on the scope of activity<\/h3>\n<p>A branch may conduct business in Poland only within the scope corresponding to the foreign entrepreneur\u2019s business activities. The scope is strictly defined; you cannot freely expand the business profile through the branch.<\/p>\n<p><strong>Decision rule:<\/strong> If you plan to conduct business in Poland outside your foreign company\u2019s profile, a branch will not be enough. Set up a limited liability company or a P.S.A.<\/p>\n<hr \/>\n<h2>Comparison: which form should you choose?<\/h2>\n<table>\n<thead>\n<tr>\n<th>Criterion<\/th>\n<th>Limited liability company<\/th>\n<th>P.S.A.<\/th>\n<th>Branch<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>New legal entity<\/td>\n<td>Yes<\/td>\n<td>Yes<\/td>\n<td>No, part of a foreign company<\/td>\n<\/tr>\n<tr>\n<td>Minimum capital<\/td>\n<td>PLN 5,000<\/td>\n<td>PLN 1<\/td>\n<td>No requirement<\/td>\n<\/tr>\n<tr>\n<td>Work as a contribution<\/td>\n<td>No<\/td>\n<td>Yes<\/td>\n<td>Not applicable<\/td>\n<\/tr>\n<tr>\n<td>Share issue<\/td>\n<td>No<\/td>\n<td>Yes<\/td>\n<td>Not applicable<\/td>\n<\/tr>\n<tr>\n<td>Scope of activity<\/td>\n<td>Any scope permitted by law<\/td>\n<td>Any scope permitted by law<\/td>\n<td>Only within the foreign company\u2019s business scope<\/td>\n<\/tr>\n<tr>\n<td>Limited shareholder liability<\/td>\n<td>Yes, up to the contribution<\/td>\n<td>Yes, up to the contribution<\/td>\n<td>The foreign company is liable<\/td>\n<\/tr>\n<tr>\n<td>Best suited to<\/td>\n<td>Control of a company and limited risk<\/td>\n<td>Startups, investment fundraising and flexibility<\/td>\n<td>Expanding an existing foreign company into Poland<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<hr \/>\n<h2>How to decide: selection rules<\/h2>\n<ul>\n<li><strong>If you are starting a new business in Poland and want to retain control<\/strong>, choose a limited liability company.<\/li>\n<li><strong>If you are building a startup, plan to raise investment or a shareholder will contribute work instead of capital<\/strong>, choose a P.S.A.<\/li>\n<li><strong>If you already have a company abroad and want to conduct the same type of business in Poland without creating a new entity<\/strong>, choose a branch of a foreign business.<\/li>\n<li><strong>If you are not sure which form fits your situation<\/strong>, arrange a short meeting with an adviser who can analyze your business model and recommend a path.<\/li>\n<\/ul>\n<hr \/>\n<h2>Next steps<\/h2>\n<ol>\n<li><strong>Define the scope of the activity<\/strong> you want to conduct in Poland.<\/li>\n<li><strong>Check whether you already have an entity abroad<\/strong>. If so, assess whether a branch will be enough or whether you need a separate company.<\/li>\n<li><strong>Determine the shareholder and contribution structure<\/strong>: money, work or other assets.<\/li>\n<li><strong>Choose a legal form<\/strong> using the rules above.<\/li>\n<li><strong>Prepare the registration documents<\/strong> and complete <strong><a href=\"https:\/\/sawaryn.com\/en\/publications\/five-steps-to-open-a-company-in-poland-as-a-foreigner\/\">registration in the National Court Register (KRS)<\/a><\/strong>.<\/li>\n<li>Arrange <a href=\"https:\/\/sawaryn.com\/en\/publications\/law-firm-in-poland-how-to-find-legal-services-in-poland\/\">ongoing legal support<\/a>. Operating a company in Poland involves reporting, tax and corporate duties.<\/li>\n<\/ol>\n<p>If you are planning an investment in Poland, contact us. We can guide you through the registration process and provide legal support across your business so you can focus on growth.<\/p>\n<h2>Frequently asked questions<\/h2>\n<p><strong>Which legal form is best for a foreigner starting a business in Poland: a limited liability company, a joint-stock company or a branch?<\/strong> If you are starting a new, independent business in Poland and want to retain control, choose a limited liability company. If you are building a startup, plan to raise investment or a shareholder will contribute work instead of capital, choose a P.S.A. If you already have a company abroad and want to conduct the same type of business in Poland without creating a new entity, a branch of a foreign business may be enough.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>What is the difference between a sp. z o.o., a limited liability company and a branch in Poland?<\/strong> A limited liability company and a P.S.A. are separate legal entities, and shareholder liability is limited to the value of contributions. A limited liability company requires at least PLN 5,000 of share capital, while a P.S.A. requires only PLN 1 and also allows share issues and work contributions. A branch is not a new legal entity; it is part of a foreign company, has no share capital requirement and may conduct business only within the scope of the foreign entrepreneur\u2019s activity.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>When does opening a branch in Poland make more sense than setting up a new company?<\/strong> A branch can make sense when you already operate a company abroad and want to expand the same business into Poland without creating a separate legal entity or contributing share capital. If you plan to conduct business in Poland outside the foreign company\u2019s profile, a branch will not be enough and you should set up a limited liability company or a P.S.A.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Why should a startup choose a limited liability company instead of a limited liability company in Poland?<\/strong> A P.S.A. allows share issues, which can speed up fundraising; it allows work to be contributed instead of money; and it offers founder shares to protect founders against dilution in later rounds. Its share capital is only PLN 1, and formalities are simplified, including electronic share transfers and no requirement to register every amendment to the company\u2019s articles with the KRS.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>How does limited liability work for foreign founders of a Polish company?<\/strong> In a limited liability company and a P.S.A., shareholder liability is limited to the value of contributions. What a shareholder contributes, whether money or a non-cash contribution, becomes company property. If the company becomes insolvent, the shareholder is not personally liable for its obligations with personal assets. The shareholder\u2019s risk is that they may not recover the contribution if the company becomes insolvent.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Compare a Polish limited liability company, simple joint-stock company and foreign-company branch by registration, capital, liability and flexibility.<\/p>\n","protected":false},"author":3,"featured_media":1904,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","sip_alt_url":"","sip_en_pl_url":"","sip_pair_uuid":"","sip_pair_state":""},"categories":[1579],"tags":[1556,1591,1561,1559],"specialization":[1213],"practice_area":[],"class_list":["post-3975","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-law","tag-corporate-law","tag-polish-limited-liability-company","tag-polish-simple-joint-stock-company","tag-startups","specialization-corporate-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/comments?post=3975"}],"version-history":[{"count":1,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3975\/revisions"}],"predecessor-version":[{"id":4084,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3975\/revisions\/4084"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/media\/1904"}],"wp:attachment":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/media?parent=3975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/categories?post=3975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/tags?post=3975"},{"taxonomy":"specialization","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/specialization?post=3975"},{"taxonomy":"practice_area","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/practice_area?post=3975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}