Fast economic growth and changes in legal and tax environment lead to significant increase in the interest of doing business in Poland among foreign entrepreneurs. According to Polish Freedom of Economic Activity Act the undertaking, pursuit and termination of economic activity shall be free to all on an equal-rights basis. Nevertheless, there are some exceptions defined by the Act. Foreign persons from the European Union Member States and Member States of the European Free Trade Association (EFTA) may undertake and conduct economic activity on the same rules as Polish citizens. Entities from other countries may enjoy freedom of establishment under agreements concluded by those states with the Member States of European Union on a reciprocal basis. Other entities must fulfill some additional requirements, e.g. hold a permanent stay permit.
Foreign entities which the Act grants the full right to freedom of economic activity may undertake and carry on business in one of below specified form:
- Commercial partnerships,
- Branch of foreign entrepreneurs,
- Agencies of foreign entrepreneurs.
Establishment of branches and agencies is the easiest form of running a business by foreign companies. Nevertheless the Act imposes some restrictions on such activity. The foreign entrepreneur who creates a branch may carry on business solely to the extent of the object of the foreign company’s activity. The scope of activity of the agency shall cover no other tasks than promoting and advertising the foreign entity. The foreign entrepreneur may start up economic activity within the framework of a branch, upon having the branch entered in the register of entrepreneurs. There are no rules concerning the minimal value of share capital. The foreign entrepreneur who established a branch shall keep for the branch separate accounting in the Polish language, in accordance with the polish accounting law. Branch of a foreign entrepreneur in Poland is subject to Polish VAT registration.