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REPRESENTATIVE OFFICE 1) Concept A foreign entrepreneur may set up representative offices in the territory of Poland. A representative office operates for and on behalf of the business of the foreign entrepreneur within the territory of Poland and is a part of the organisational and functional structure of his or her business. Therefore, the entrepreneur conducting the business activity is considered to be the foreign investor him or herself. In legal terms, a representative office set up by a foreign entrepreneur is a subordinated organisational entity functioning with the purpose of advertising and promoting the business of the foreign entrepreneur. Advertising and promotion are the constituent elements of the foreign entrepreneur's business activity. In addition, a representative office is not a self-balancing unit. Any division of property by the entrepreneur, if effected , is of a purely technical and organisational nature. The objects of the representative office are not necessarily coherent with the objects of the business activity because the representative office functions with the purpose of advertising and promoting the business of the entrepreneur. A representative office must be entered in the Register of Representative Offices of Foreign Entrepreneurs, kept by the Minister of the Economy. 2) Application for registration The application for registration should be made in Polish and specify: * the name, registered office and legal status of the foreign entrepreneur setting up a representative office, * the amount of capital or other funds of the foreign entrepreneur setting up a representative office, * the objects of business activity of the foreign entrepreneur setting up a representative office, * the first name, surname and address in Poland of a person authorised to represent the foreign entrepreneur in a representative office, * the address of a representative office in Poland. The following documents should be attached to the application referred to above: * the founding deed (articles of association, statutes) of the foreign entrepreneur , * an excerpt from a Commercial Register or an equivalent thereof, * a statement of the foreign entrepreneur concerning the establishment of a representative office in the territory of Poland, * a statement of the foreign entrepreneur operating in the form of a company, concerning the extent to which the share capital has been financed by contributions, provided that the laws of the country in the territory of which the company has a registered office allow for a partial contribution towards the share capital. The documents in foreign languages should be submitted together with their sworn translation into Polish. This requirement arises from Art. 46 Paragraph 3 of the Business Activity Law and Article 27 of the Constitution of the Republic of Poland which provides that Polish is the official language in Poland. The requirement to disclose the amount of capital and other funds of the foreign entrepreneur setting up a representative office is aimed at determining the credibility the entrepreneur . This is a method by which the security of legal trading is ensured. In turn, the requirement to disclose information on the objects of business activity helps determine whether the advertising and promotional activities that a representative office intends to carry out indeed correspond to the foreign operator's business activity. Although the law does not specify how detailed the description of the objects of business activity ought to be, the assumption is that enough detail must be provided in order to allow the registration authorities to duly perform their obligations set out by provisions concerning the refusal to grant a decision on entry in the Register, or ban on the conducting of activities by a representative office. As regards documents attached to the application, particular attention should be paid to the foreign entrepreneur's founding deed. This is an instrument of constitution, formation or appointment of the entrepreneur . Its character may vary from one legal system to another. The differences concern mainly the legal and organisational forms in which entrepreneur may take up and conduct business activity. This is of key importance to commercial companies. Example: A founding deed of a registered partnership is a partnership agreement concluded between two or more persons, whereas formation of a limited liability company requires execution of the articles of associations or the founding deed of a single-member limited liability company. The statement of the foreign entrepreneur concerning the establishment of a representative office in the territory of Poland should be made by a body authorised to make such statement. Such body should be authorised to represent the entrepreneur in dealings with third parties, make declarations of intent with potential legal ramifications and enter into legal relationships in the name of the entrepreneur . The statement of the foreign entrepreneur concerning the extent to which the share capital has been financed by contributions is required in the case where the laws of the country in the territory of which the operator has a registered office allow for a partial contribution towards the share capital 3) Entry in the Register of the Representative Offices of Foreign Entrepreneurs The setting up of a representative office requires entry in the Register of the Representative Office of Foreign Entrepreneur , which is kept by the Minister of the Economy. An entry is made by the Minister pursuant to the submitted application and in accordance with its contents, following consultation with the Minister responsible for the subject area pertaining to the foreign entrepreneur's business activity. A certificate of registration entry is issued. It should contain data from the application, as well as the entry number and date. If a certificate has defects in its form or contents or does not include information present in the entry, the foreign entrepreneur may apply for correction of the certificate. After consulting the Minister responsible for the subject area pertaining to the foreign entrepreneur's business activity, the Minister of the Economy may issue a decision whereby the application for entry in the Register is rejected on the following grounds: * the existence of a representative office would pose a threat to national security and defence or to a State secret or to any other important public interest. * the application for registration concerns activities which surpass advertising and promotion of the foreign entrepreneur , or has defects that have not been remedied within the set time limit, or lacks the required documentation. Taking up of other activities apart from advertising and promotion constitutes a breach of the permitted scope of operations of a representative office. Such breach occurs, for instance, when a representative office engages in business activity or operates in violation of law. 4) Obligations of a representative office A representative office is obliged to: 1. use the name of the foreign entrepreneur in the language of the country in which his or her registered office is located, together with a Polish translation of the name of the economic entrepreneur's legal form and the phrase "przedstawicielstwo w Polsce"; 2. keep separate books in accordance with the provisions of laws on accountancy; 3. notify the Minister of the Economy of any factual and legal changes concerning data included in the application and in the statement of the foreign entrepreneur concerning the extent to which the share capital has been financed by contributions, as well as of the commencement and termination of any proceedings conducted to wind-up the business of the foreign entrepreneur and of the forfeiture of his right to conduct business activity or possess property, no later than 14 days from the time upon which such events take place. 5) Ban on the activities of a representative office After consulting the Minister responsible for the subject area pertaining to the foreign entrepreneur's business activity, the Minister of the Economy may issue a decision to ban the activities of a representative office on the following grounds: 1. a representative office has committed a gross violation of Polish law or fails to perform its obligations arising from the provisions of the law, 2. wind-up proceedings have been instigated against the foreign operator who has set up a representative office, or the right to conduct business activity or possess property has been forfeited by the entrepreneur , 3. activities of the foreign entrepreneur or of his representative office pose a threat to national security and defence or to a State secret or to any other important public interest. The decisions of the Minister of the Economy are not subject to appeal. However, the Administrative Procedure Code provides that a dissatisfied party may apply to the authority issuing the decision for reconsideration. Furthermore, a representative office is entitled, as a party to the administrative procedure, to appeal against a decision of the Minister of the Economy issued as a response to the application for reconsideration, to the Supreme Administrative Court. Text source: Polish Information and Foreign Investment Agency (PAIiIZ)