Foreign entrepreneurs considering entry into the Polish market face a fundamental question about the optimal legal form of their presence in Poland. Alongside establishing a subsidiary or opening a branch, Polish law offers yet another, often underestimated option – setting up a representative office. This is the lightest form of market presence, which can serve as a strategic starting point for building business relationships before the investor commits to full operational engagement.

The institution of the representative office is primarily regulated by the Act of 6 March 2018 on the Rules of Participation of Foreign Entrepreneurs and Other Foreign Persons in Economic Transactions in the Territory of the Republic of Poland. This article discusses the rules governing the establishment, registration and operation of a representative office, with particular emphasis on the limitations to which this form of presence is subject, as well as situations in which a representative office may prove to be the optimal solution.

What is a representative office and what is its scope of activity

A representative office of a foreign entrepreneur is an organisational unit without legal personality, forming an integral part of the foreign entrepreneur. Unlike a subsidiary or even a branch, a representative office is not an independent legal entity – all rights and obligations arising from its activities rest directly with the foreign entrepreneur.

The scope of activity of a representative office is strictly limited by law and may encompass only advertising and promotional activities on behalf of the foreign entrepreneur. This means that a representative office cannot conduct business activity understood as the sale of goods, provision of services or conclusion of commercial contracts generating revenue in Poland. It may, however, organise trade fairs and conferences, operate a showroom, build a network of business contacts, conduct market research and maintain relationships with potential clients and trading partners.

It is worth noting that representative offices may also be established by foreign persons appointed by an act of the competent authority of their country of registered office. The scope of activity of such offices is even narrower – it may only encompass promotion and advertising of the economy of that state.

Who may establish a representative office in Poland

Unlike a branch, the establishment of which by entrepreneurs from outside the EU requires the existence of a reciprocity principle, any foreign entrepreneur may set up a representative office in Poland, regardless of their country of registered office. There is no need to demonstrate the existence of bilateral agreements or reciprocity. This constitutes a significant advantage of a representative office over a branch, particularly for entrepreneurs from third countries such as Asian, African or Latin American states that do not have reciprocity agreements with Poland.

Entrepreneurs from EU and EFTA countries naturally enjoy full freedom of establishment and may freely create branches, subsidiaries and representative offices alike. For these entrepreneurs, a representative office constitutes the lightest form of market entry – an ideal solution at the market reconnaissance stage, without the need to incur the costs of registering a company or branch.

Registration procedure

Preparation and submission of the application

The establishment of a representative office requires entry in the register of representative offices of foreign entrepreneurs, maintained by the minister responsible for economic affairs (currently the Minister of Development and Technology). Unlike a branch, a representative office is not subject to registration in the National Court Register (KRS).

The procedure begins with the foreign entrepreneur adopting an appropriate corporate resolution – most commonly a resolution of the parent company’s management board to establish a representative office in Poland. An application for entry in the register must then be submitted, containing: the name, registered office and legal form of the foreign entrepreneur; the main business activity of the entrepreneur; the name, surname and address in Poland of the person authorised to represent the entrepreneur at the representative office; and the address of the representative office in Poland.

Required documents

The application must be accompanied by an official copy of the document confirming the registration of the foreign entrepreneur in the register appropriate for its registered office, together with a certified Polish translation. A document confirming the authorisation of the person to represent the entrepreneur at the representative office and proof of payment of the stamp duty of PLN 1,000 are also required.

All foreign-language documents must be translated into Polish by a sworn translator. Documents from countries that are parties to the Hague Convention require an apostille, while documents from other countries require consular legalisation.

Duration of the procedure and the minister’s decision

The registration process typically takes approximately one month. The minister enters the representative office in the register if the applicant meets all statutory requirements, and then issues ex officio a certificate confirming the entry. The certificate is delivered to the applicant by registered mail with acknowledgement of receipt, although personal collection at the ministry’s premises is also possible.

The minister issues a decision refusing entry in the register if the establishment of the representative office would threaten the security or defence of the state, the security of classified information, another important public interest, or if the objectives of the representative office would exceed the permissible scope of promotional and advertising activity.

Validity period and renewal obligation

Entry in the register of representative offices is valid for a period of two years from the date of entry. This constitutes a significant difference compared to branch registration in the KRS, which is not time-limited. If the entrepreneur intends to continue the representative office’s activity, an application for renewal must be filed within the last 90 days of the current entry’s validity.

Failure to file a renewal application within the required deadline results in loss of the right to operate the representative office and removal from the register. The renewed entry is valid for a further two years. It should be noted that the register of representative offices is public and freely accessible, ensuring transparency regarding the operations of foreign entities on the Polish market.

Obligations of the entrepreneur operating a representative office

Organisational and reporting obligations

The foreign entrepreneur who has established a representative office is obliged to designate it using the original name of the foreign entrepreneur with the addition of the words “przedstawicielstwo w Polsce” (representative office in Poland). There is no flexibility regarding naming – Polish law does not provide for the free choice of a name for a representative office.

Furthermore, the entrepreneur must appoint a person authorised to represent them at the representative office. This person serves as the liaison between the foreign entrepreneur and Polish administrative authorities and counterparties. Any changes in factual or legal circumstances relating to data covered by the register entry must be reported to the minister within 14 days of their occurrence.

Accounting obligations

Although the representative office does not conduct business activity generating revenue, the foreign entrepreneur is obliged to maintain separate accounting records for it in the Polish language, in accordance with the provisions of the Accounting Act. This obligation encompasses maintaining accounting books, preparing financial statements and archiving accounting documentation. In practice, this means the need to employ or outsource accounting services to a specialised accounting firm in Poland.

Tax status of a representative office

Corporate income tax (CIT)

A representative office does not conduct business activity and does not generate revenue in Poland; therefore, in principle, it is not an independent CIT taxpayer. The taxpayer remains the foreign entrepreneur. However, Polish tax regulations and double tax treaties define the concept of a permanent establishment, which under certain circumstances may also encompass a representative office.

Under most double tax treaties based on the OECD Model Convention, maintaining a fixed place of business solely for the purpose of carrying out activities of a preparatory or auxiliary character should not give rise to a permanent establishment. It is crucial, however, that the actual activity of the representative office does not exceed the scope of advertising and promotion. Exceeding this scope – even informally – may result in the representative office being classified as a permanent establishment of the foreign company, entailing the obligation to settle CIT in Poland.

Value added tax (VAT)

A representative office is not a VAT taxpayer, as it does not carry out transactions subject to this tax. It is therefore not subject to registration in the VAT taxpayer register. The costs of operating the representative office, such as office rent, telecommunications services and promotional materials, are borne by the foreign entrepreneur. With regard to input VAT included in the costs of the representative office’s operations, the foreign entrepreneur may apply for a refund under the provisions governing VAT refunds to foreign entities (the VAT-REF procedure for EU taxpayers or the reciprocity-based procedure for non-EU entities).

Employer obligations

Where employees are hired at the representative office, the foreign entrepreneur acts as a withholding agent for personal income tax (PIT) and social and health insurance contributions (ZUS). This means the necessity to register with ZUS as a contribution payer, make timely PIT advance payments, and submit the relevant tax declarations and returns. A representative office, although it does not conduct business activity, may indeed employ staff in Poland.

Representative office versus branch – key differences

Removal from the register and termination of activity

The minister responsible for economic affairs removes a representative office from the register ex officio in strictly defined circumstances. This occurs when the foreign entrepreneur grossly violates Polish law, the representative office does not hold legal title to the premises indicated in the register, the foreign enterprise has been liquidated, or the renewal application has not been filed within the required deadline. Removal from the register results in the loss of the right to operate a representative office in Poland.

The foreign entrepreneur may also decide to close the representative office by submitting an appropriate notification to the ministry. In both cases, it is necessary to settle all obligations, including settlements with employees and tax authorities.

When is a representative office the optimal choice

A representative office is the most appropriate form of presence in Poland for foreign entrepreneurs who are at an early stage of market reconnaissance and do not yet intend to conduct full operational activity. It is an ideal solution for companies planning to participate in trade fairs and industry conferences, build a network of contacts with potential clients and distributors, conduct research on the Polish market before committing to a larger investment, and maintain a contact office or showroom.

A representative office may also serve as the first stage of a market entry strategy – following the reconnaissance phase and establishment of business relationships, the entrepreneur may transform their presence into a branch or establish a full subsidiary. The costs of operating a representative office are significantly lower than those of a branch or company, making this form particularly attractive for small and medium-sized enterprises testing expansion opportunities.

Practical recommendations for investors

When deciding to establish a representative office, the entrepreneur should attend to several key matters. First, it is essential to secure legal title to the premises where the representative office will be located – this may be an office lease or even a virtual office. Second, it is advisable to arrange sworn translations of all required documents well in advance, as formal deficiencies are the most common cause of delays in the registration procedure. Third, strict compliance with the permitted scope of activity is crucial – undertaking actions beyond advertising and promotion exposes the entrepreneur to the risk of removal from the register and, in extreme cases, tax consequences associated with the creation of a permanent establishment.

It is recommended to engage the services of a professional legal and tax advisor who will help properly structure the presence in Poland and avoid regulatory pitfalls. A good advisor will also help plan the potential transformation of the representative office into a more advanced form of activity once the entrepreneur decides to commit to full operational engagement on the Polish market.

How ATL Law can help

ATL Law specialises in providing comprehensive legal and tax advisory services to foreign investors entering the Polish market. Our extensive experience in advising international clients enables us to effectively guide the entire process – from selecting the optimal legal form of presence in Poland, through registering a representative office, branch or subsidiary, to ongoing compliance and reporting support.

In the area of representative offices of foreign entrepreneurs, we offer full support encompassing preparation of corporate documentation and the application for entry in the register of representative offices, coordination of sworn translations and apostille, representation before the Ministry of Development and Technology, organisation of accounting services for the representative office in accordance with Polish accounting regulations, as well as ongoing advisory on the permissible scope of activity and tax risks.

We also advise in situations where a representative office is no longer a sufficient form of presence and transformation into a branch or subsidiary becomes necessary. By combining legal and tax competencies, we provide cohesive support that minimises regulatory risks at every stage of the investment. Our experts work in Polish and English ensuring smooth communication with international clients.