A Slovak manufacturing group decides to expand into Poland. The project manager asks a simple question: do we open a branch or register a subsidiary? The answer shapes tax exposure, liability, and operational speed for years ahead. Getting it wrong at the outset is expensive to reverse.

Slovak groups entering Poland choose between a registered branch (oddział) and a limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o.). A branch is not a separate legal entity – the Slovak parent bears full liability for its obligations. A sp. z o.o. is an independent entity with liability capped at share capital, subject to registration in the National Court Register (Krajowy Rejestr Sądowy, KRS). Each structure carries distinct tax, compliance, and governance consequences that a Slovak group must evaluate before committing.

This alert covers the two structures side by side, identifies the thresholds that make one preferable over the other, and sets out immediate action items for Slovak groups currently weighing their Polish entry options.

What are the structural differences between a branch and a sp. z o.o. in Poland?

A branch (oddział) is a dependent unit of the Slovak parent. It has no share capital requirement and no separate legal personality. The parent company is directly liable for every obligation the branch incurs in Poland. Registration with the KRS is still required, and the branch must appoint a representative authorised to act on its behalf in Poland. The KRS registration typically takes two to four weeks from the date of filing.

A sp. z o.o., by contrast, is a Polish legal entity. Minimum share capital is PLN 5,000. It can sue and be sued in its own name. The Slovak parent's liability is ordinarily limited to its contribution. The sp. z o.o. must also register with the KRS, but it additionally requires a notarial deed of incorporation, a taxpayer identification number (NIP), and statistical registration (REGON). Full setup takes four to six weeks in practice.

The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) becomes relevant only if the Slovak group's activities touch regulated financial services. For most manufacturing, distribution, or IT service businesses, KNF oversight does not arise at the entry stage.

  • Branch: no share capital, no separate legal personality, parent bears full liability
  • Sp. z o.o.: minimum PLN 5,000 capital, separate legal entity, limited liability
  • Both structures require KRS registration before commencing business in Poland
  • Branch representative must be designated in the KRS filing

We assisted a Slovak distribution group in Silesia (winter 2025) in converting an existing branch into a sp. z o.o. after the parent's liability exposure under Polish commercial legislation exceeded EUR 1m. The conversion process required a formal liquidation of the branch and a parallel incorporation – a sequence that took approximately three months and generated avoidable costs.

Which structure suits a Slovak group – and when does the choice become irreversible?

The branch works well for pilot operations, short-term project delivery, or situations where the Slovak parent wants to test the Polish market before committing capital. Because the branch has no independent legal personality, consolidation into the Slovak parent's accounts is straightforward. However, the parent's unlimited exposure to Polish obligations is a hard constraint that grows with turnover.

A sp. z o.o. becomes the preferred vehicle once the Polish operation is expected to generate annual revenue above EUR 500,000, employ more than five people, or enter long-term contracts with Polish counterparties. At that scale, the liability protection of a separate entity justifies the additional compliance burden – annual financial statements, a management board, and mandatory due diligence Poland procedures if the entity later becomes an M&A Poland target.

The choice becomes practically irreversible once the branch has signed multi-year supply agreements or incurred significant Polish tax liabilities. Converting at that stage triggers a full branch liquidation, which requires settling all outstanding obligations, notifying creditors, and filing a liquidation report with the KRS. That process takes a minimum of three months and cannot be accelerated.

For cross-border context on how other EU groups approach this decision, see our analysis of branch vs subsidiary in Poland for Cyprus groups, which covers parallel structural considerations under a different tax treaty framework. Slovak groups should also review the sp. z o.o. vs S.A. decision matrix for France investors for a broader view of Polish entity types available to foreign groups.

Our team helped a Slovak IT services firm in the Małopolska region (spring 2025) set up company Poland operations as a sp. z o.o. within five weeks. The client had initially considered a branch but switched after our analysis showed that two planned Polish employees would trigger permanent establishment exposure under the Poland–Slovakia tax treaty within 12 months.

What are the immediate action items for Slovak groups?

Slovak groups that have not yet formalised their Polish presence face a clear compliance risk. Operating in Poland without KRS registration – whether through a branch or a subsidiary – constitutes an administrative offence. Fines can reach PLN 10,000 per violation. More seriously, unregistered activity may be treated as a permanent establishment, triggering Polish corporate income tax obligations retroactively.

If your group already operates through a branch and annual Polish revenue now exceeds EUR 500,000, commission a liability review immediately. The review should assess whether the branch's contractual exposure has outgrown the parent's risk appetite and whether conversion to a sp. z o.o. is warranted before the next financial year closes.

Slovak groups sending employees to Poland should also confirm A1 certificate status. Failure to hold valid A1 certificates for posted workers creates social security liability in Poland. Our detailed guide on posted workers from Slovakia to Poland and A1 certificates sets out the procedural requirements.

  • Confirm KRS registration status before commencing any commercial activity in Poland
  • Assess permanent establishment risk if employees or agents act in Poland regularly
  • Review branch liability exposure if annual Polish revenue exceeds EUR 500,000
  • Verify A1 certificates for all posted workers within 30 days of deployment
  • Engage a law firm Warsaw-based with KRS filing experience to manage timelines

The specific situation of your group determines which action is most urgent. Delaying the structural decision while Polish operations grow forfeits the liability protection that a sp. z o.o. would have provided from day one. To receive an expert assessment of your group's Polish entry structure, contact info@kordeckipartners.com.

If your Slovak group is currently operating in Poland – or planning to within the next 90 days – a one-hour structural review can prevent months of remediation later. We will map your revenue threshold, employee count, and contractual exposure to the right vehicle and file with the KRS within the agreed timeline. Email info@kordeckipartners.com to schedule that review.

Frequently asked questions

Q: Can a Slovak branch in Poland open a Polish bank account and sign contracts independently?

A: Yes. A registered branch can open a Polish bank account and enter into contracts in Poland. However, the contracting party remains the Slovak parent company, not the branch itself. All financial obligations flow back to the parent, which bears unlimited liability under Polish commercial legislation.

Q: How long does it take to set up a sp. z o.o. in Poland for a Slovak group?

A: In practice, four to six weeks from the notarial deed of incorporation to full KRS registration, NIP issuance, and REGON number. Using the S24 electronic registration system can reduce the timeline to two to three weeks, but S24 limits the flexibility of the articles of association. Complex shareholder structures or non-standard governance provisions require the full notarial route.

Q: Is there a minimum revenue threshold that triggers mandatory conversion from a branch to a subsidiary?

A: Polish law does not impose a mandatory conversion threshold. The decision is commercial and tax-driven. In practice, most advisers recommend conversion when annual Polish revenue exceeds EUR 500,000 or when the branch begins employing staff on Polish employment contracts. At those levels, the parent's unlimited liability and the permanent establishment risk typically outweigh the administrative simplicity of the branch structure.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to corporate structuring, M&A, and cross-border market entry. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.