Many UK companies eventually decide to expand their operations beyond national borders, often establishing a branch or subsidiary in an EU member country like Poland. However, this raises several legal questions: If the company is based in the UK and has a branch in Poland, how should this be legally regulated? Is it necessary to register a new business? Or can the branch operate as a foreign company in that country?
Company in the UK, Branch in Poland – What Do the Regulations Say?
The answers to these questions can be found in the international agreement of 2006, officially titled: „Convention between the United Kingdom of Great Britain and Northern Ireland and the Republic of Poland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains”.
The Polish translation is Convention between the Republic of Poland and the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains. You may come across the abbreviated name – 'Convention for the Avoidance of Double Taxation’.
According to Article 5 of the Convention, if a company registered in the UK has a „permanent establishment” in Poland (such as an office, branch, factory, subsidiary or workshop), it must register the establishment as a company in Poland from the first day of its operations in the country.
It doesn’t matter whether the work is done for Polish or British clients; what matters is that the office is in Poland.
When Is It Not Necessary to Register a UK Company’s Branch in Poland?
An exception to this rule applies to construction sites. In the case of construction-related businesses, there is no need to register in Poland for the first 12 months of operation. Registration is only required after this period.
In addition, there is no need to establish a business if the employee of a foreign company working in Poland does not have an office or other permanent establishment. For example, people sent to other EU countries to look after children or the elderly do not work from an office, but in the private homes of the people they look after. Therefore, the establishment of a company is not required in this case.
