Establishing an R&D Office in Poland: Subsidiary or Branch?

Ready to scale your R&D in the EU? Poland is the premier choice for setting up tech offices, driven by its talent pool and unbeatable tax incentives.

International companies typically choose one of two models: the Subsidiary (LLC) or the Branch.

The Subsidiary (sp. z o.o. – LLC): Your Strategic Base

A subsidiary is an independent Polish legal entity, usually 100% owned by the foreign parent company.

It can:

• Hire employees directly.
• Sign contracts, and hold assets in its own name.
• Limit the parent company’s liability.
• Crucially: Qualify for Poland’s best incentives: up to 200% R&D deduction AND the powerful 5% IP Box tax rate on qualified IP income, including software development.
• Incorporation is fast (around 2–3 weeks) and requires minimal share capital (€1,200). 

A subsidiary is subject to corporate income tax (CIT) in Poland — 19% standard rate, or 9% for small taxpayers — but can benefit from generous R&D relief (up to 200% deduction) and IP Box (5% tax) on qualified IP income, including software.

The Branch: Simple Setup, Major Limitations

A branch is not a separate legal entity; think of it as a temporary extension of your foreign company.

It is limited because it:

• Can only perform activities identical to those of the parent company.
• Must keep separate accounting for Polish operations.
• Has its profits taxed in Poland as part of the parent’s income.

While initially simpler to register, Branches are far less flexible for long-term hiring, investment, and complex contracting. They are typically used for temporary projects or representative functions, while subsidiaries are chosen for long-term operations and IP development.

The Verdict

In nearly all R&D investment cases, the Subsidiary (sp. z o.o. – LLC) is the structure of choice due to its legal independence, simplicity in banking, and direct access to major Polish innovation tax reliefs.

The decision between an LLC and a Branch is foundational and will determine your tax base for years to come.

Contact REVERA Polska today for a consultation. We will analyze your R&D goals and help you design the optimal structure that guarantees your maximum tax advantage in Poland.

Author: Aleksander Skirpan.