BRANCH vs. SUBSIDIARY – which is better?

Expanding into Poland presents an exciting opportunity — but before launching operations, it's crucial to choose the right legal structure. Many foreign investors face the same dilemma: branch or subsidiary? While both options are well-established and commonly used, they serve different purposes. Selecting the right structure can protect your business, minimize risks, and ensure smoother operations.

Here’s a quick overview of the key differences:

Legal entity

• ‍Branch – not a separate legal entity. It functions as an extension of the parent company. All contracts, assets, and liabilities remain with the main enterprise. Licenses or permits granted to the parent company may also be used by the branch.

• Subsidiary – a separate legal entity, typically established as a limited liability company — the most popular form among foreign investors. It enters into contracts, owns assets, and is responsible for its own liabilities. This structure limits the parent company’s exposure.

Name

• Branch – must operate under the same name as the parent company.

• Subsidiary – free to choose its own name, independent of the parent company.

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Scope of business activity

• ‍Branch – its activities must align with those of the parent company.

• Subsidiary – can define its own scope of business.

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Share capital

• ‍Branch – no separate share capital required.

• Subsidiary – minimum share capital of PLN 5,000 must be paid in.

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Additional funding

• ‍Branch – financed directly from the parent company’s resources.

• Subsidiary – requires formal grounds for additional funding, such as capital increases, shareholder loans, or additional payments.

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Corporate ownership

• ‍Branch – always fully owned by the parent company.

• ‍Subsidiary – may have multiple shareholders, offering flexibility in ownership structure.

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So, which option is better?

There’s no one-size-fits-all answer. The right choice depends on your strategy, risk tolerance, and long-term goals. A better question might be: which structure best supports your business objectives?

A branch may be the simpler solution if you seek a quick presence in Poland with full control from abroad. A subsidiary, on the other hand, offers legal separation, greater flexibility, and reduced risk for the parent company.

How we can help

At our law firm, we specialize in supporting foreign investors through every stage of expansion. From selecting the optimal structure to establishing your entity and providing ongoing legal support, we ensure your business in Poland is built on a solid foundation.

Thinking about expanding into Poland? Contact us — we’ll help you find the best solution for your needs.

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