Today on the pages of the Business Constitution, Julita Tatałaj, apprentice at the Sienkiewicz and Zamroch Law Firm, a student at the Faculty of Law and Administration of Nicolaus Copernicus University, and also a lover of the Middle Kingdom. During her May visit to China, Julita participated in the Job Fair at the Beijing University. Apart from local job offers, there were a lot of offers in foreign branches of Chinese companies, some of them consider entering the Polish market. It inspired her to write an article that will answer the question how to set up a branch of a foreign enterprise in Poland.
Branch of a Chinese company in Poland
Does the Business Constitution change the rules of conducting activities in Poland by foreign entrepreneurs? This issue was devoted to one act from the so-called a five-pack, or a new Act on the rules of participation of foreign entrepreneurs and other foreign persons in the course of trade on the territory of the Republic of Poland.
No big changes
The new law does not introduce revolutionary solutions. Most of the provisions are identical to the provisions of Business Activities Freedom Act. The basic principles are as follows.
First of all, the regulations differentiate foreign entrepreneurs depending on where they come from. Companies from the EU and EFTA are treated differently from other countries. EU entrepreneurs can simply create branches on the same principles as Polish entrepreneurs. On the other hand, entrepreneurs from other countries, including the People’s Republic of China, will be able to establish branches on the basis of reciprocity.
Secondly, the provision has been maintained that a foreign entrepreneur within the branch may perform business activities only to the extent that he conducts this activity abroad.
Thirdly, the legislator retained the obligation imposed on a foreign entrepreneur to establish a person authorized in a branch to represent a foreign entrepreneur. The only exception was the inclusion of a notarized signature of the authorized person in the branch to represent a foreign entrepreneur.
How to create a branch on the territory of the Republic of Poland
The branch is probably the simplest form of entering the foreign market. More and more enterprises are using it. In order to take up activities within the branch, it is enough for the foreign entrepreneur to establish a person authorized in the branch to represent him and obtain an entry in the Register of Entrepreneurs of the National Court Register.
Proceedings in the National Court Register
The procedure for the entry is not particularly complicated. However, it is worth remembering that, in addition to the typical requirements set out in the Act on the National Court Register, a foreign entrepreneur is required to submit the following documents:· copy of the founding act, contract or statute together with a certified translation into Polish; · a copy from the register in which it is registered, along with a certified translation into Polish.
The creation of a branch also creates other duties. The branch must:use to mark the branch of the original name of the foreign entrepreneur along with the name of the entrepreneur’s legal form translated into Polish and the words “branch in Poland”; e.g. Bank of China (Luxembourg) S.A. Joint Stock Company Branch in Polandkeep a separate accountancy in Polish in accordance with the accounting regulations;report to the Minister competent in matters of economy, currently the Minister of Enterprise and Technology, any changes in factual and legal status within 14 days from their occurrence.
In certain situations, decisions on the prohibition of performing activities may be issued by the Minister competent for the economy. Its copy shall be sent by the Minister to the competent registry court. As an example, such a decision will be issued in a situation of gross violation of Polish law or liquidation of a foreign entrepreneur who created a branch.
It should also be remembered that the existing branches of foreign companies must adapt their business to the solutions provided for in the business constitution.