# Do you need a Polish subsidiary to hire?

> You found someone in Poland and assume you must open a subsidiary. Usually you don't — Hans's story on the real cost of an entity vs. direct employment.
> Source: https://certapoland.com/guides/do-you-need-a-polish-subsidiary-to-hire/

Hans had his opening line ready. He'd rehearsed it on the way into the room: "Let's open a company in Poland." Short, concrete, sensible.

The company where he's HR director designs and installs specialised backup-power units across Europe — the kind that, in a hospital operating theatre or a factory, must not go dark for a second. A few weeks earlier they had signed two large service contracts in Poland, and those contracts carry a hard clause: on-site technical response measured in hours, not days. Hans had found two engineers who fit — both from a competitor, both ready to move at once. The catch: he can't hire them "somehow". He needs them legally, under Polish employment rules, and preferably this month.

Hence the company idea. At the board meeting, Hans got as far as the second slide before the CFO put down his pen.

"What will it cost us per year?" he asked. "Not the registration. The upkeep."

Hans didn't know the exact figure. The CFO did. He worked it out aloud, calmly, point by point: entity registration, share capital, separate Polish accounting every month, reconciling it with the German books, financial statements, corporate housekeeping for the company. Costs that are almost identical for two people and for twenty.

"We're hiring two engineers," he concluded, "and setting up a structure for twenty. We'd be paying mainly for the company to exist at all. It doesn't add up."

Silence — the kind in which good projects usually die. But Hans had prepared better than he'd let on. He closed the deck and said: "All right. Then I have a plan B that almost nobody knows about. It's also Polish."

He meant a way to employ someone in Poland directly, on a genuine employment contract. Under this arrangement the employee is registered as the technical (formal) payer of the ZUS social-security contributions — handling the day-to-day payment and reporting — while the cost and the legal responsibility stay with the employer. All for a flat fee, with no intermediary stepping in as the legal employer.

Hans isn't unusual. The same conversation — a good reason to be in Poland, and the mistaken assumption that it requires building a whole entity — comes up at Certa Poland almost every week. Below, we unpack the decision exactly as we unpacked it for Hans.

*(This is general information, not legal or tax advice. Whether this route fits your case depends on the facts — we confirm that in writing before you decide anything. Hans and the other characters in our articles are illustrative examples, not specific clients.)*

## The short answer: usually you don't need a subsidiary

In many straightforward cases, when a company from the EU, EEA or Switzerland wants to hire one person or a small team in Poland — in a role that doesn't involve negotiating or concluding contracts on the company's behalf — it doesn't need to open a branch or set up a subsidiary. The employee signs a genuine Polish employment contract directly with the foreign employer, and contributions and tax are handled locally — with no entity of your own in Poland, and no EOR platform stepping between you and your hire.

A branch or a subsidiary begins to make sense at larger scale: a local team, an office, sales, real operational activity. For Hans's two engineers, it's a bit like buying a truck to move two boxes.

## Why the CFO was right about the cost

Hans's CFO wasn't against Poland. He was against paying for a structure the company wouldn't use — and he was right, because a limited company (sp. z o.o.) or a branch isn't a one-off form; it's a standing cost:

- **Set-up** — entry in the National Court Register (KRS), the articles of association (often before a notary), NIP and REGON numbers, and registrations with ZUS and the tax office (the share capital itself isn't a "cost" — that money stays in the company).
- **Separate accounting in Poland** — full monthly bookkeeping under Polish rules, plus reconciling it with head office.
- **Ongoing obligations** — financial statements, filings, corporate administration of the entity.

Setting the company up itself is not the expensive part — with us it is a one-off fee from €1,000–5,000, depending on the complexity of the structure, plus the statutory costs of incorporation (notarial, court and registration fees). The weight comes afterwards, in running a standing entity: ongoing accounting, statutory filings, compliance and corporate administration, month after month, whether it employs two people or twenty. That is exactly the CFO's point — with two people, you are mainly paying for the company to exist, not for the people you actually hired. We calculate the real figures case by case.

When does that cost actually pay off? When you're genuinely building a team, an office or local sales in Poland. Hans was building none of those. Hans needed two people for remote diagnostics and a 3 a.m. phone call when a red light comes on in a hospital.

## Three lighter routes (and the one Hans chose)

When a subsidiary is off the table, three options usually remain:

**1. Direct employment with the employee as technical payer — Hans's route.** The employee signs a Polish employment contract directly with the foreign employer and is registered as the technical (formal) payer of ZUS contributions. You remain the employer, you fund the whole cost, and you pay a flat service fee. Available to employers from the EU, EEA and Switzerland. We describe it in detail on our page on [hiring an employee in Poland without your own entity](https://certapoland.com/hire-employees-in-poland/).

**2. An EOR (Employer of Record) platform.** It works, but it inserts a third party as the legal employer and charges a per-head fee on top of salary and taxes. You lose the direct relationship with your employee, and your money flows through the intermediary.

**3. A B2B contractor.** The specialist sets up a sole proprietorship and issues invoices. Sometimes legitimate, but it carries a misclassification risk — if the arrangement looks like employment in practice, the labour inspectorate can treat it as such, with back contributions, PIT and employee claims attached. That is a separate topic, which we cover in our article on hiring IT specialists.

For a full breakdown of costs and differences — including who is the legal employer in each variant — see our page on [packages and how the routes compare](https://certapoland.com/employer-setup-compliance/).

## How Hans's "plan B" works

What Hans called plan B rests on a specific basis in EU law. It's worth separating into three layers, because mixing them up is the most common source of confusion:

- **Social security (ZUS).** Under **Article 21(2) of Regulation (EC) No 987/2009** ([EUR-Lex](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32009R0987)), the employer and employee can agree that the employee is registered as the technical (formal) payer of ZUS contributions — handling the day-to-day payment and reporting — while the cost and the legal responsibility stay with the employer. This operates without prejudice to the employer's basic obligations: the burden does not "pass" to the employee. That's why the whole model is built so that the employer funds the full cost, in full and on time, while we calculate and prepare every filing so nothing slips.
- **Personal income tax (PIT).** A separate layer. How the PIT advances are handled depends on the double-tax treaty, the employee's residency and the payment model — we confirm it individually. Under this model, the PIT advances are, as a rule, paid by the employee, and we calculate and prepare them.
- **Labour law.** A third, separate layer. Work performed in Poland is governed by the Polish Labour Code. This is a full employment contract, with all the employer's obligations.

Money flows directly from employer to employee. Certa calculates the contributions and PIT, prepares the documents and tracks the deadlines — but never holds your funds.

With one caveat, which we state plainly: this isn't an arrangement to set up "yourself, from a blog post". A small error in the filings means arrears with ZUS and the tax office, sometimes with interest — which is why we run it with a tax adviser, rather than leaving the employer with an instruction sheet.

We told Hans one thing outright, before he got carried away: **we don't promise that the risk of creating a permanent establishment (PE) disappears.** In Hans's case the risk looks low — two engineers working remotely, with no authority to negotiate or conclude contracts on the company's behalf — but that has to be confirmed on the facts, not assumed. The mere absence of a subsidiary or branch doesn't automatically mean no PE arises; tax authorities have, in some circumstances, looked at home-working arrangements when assessing PE. Not every case is like Hans's — and that's exactly what the other side of this decision is about.

## The other side: when the role itself creates a tax problem

Hans's model works because his engineers do technical work — they don't conclude contracts on the company's behalf. But if Hans wanted to hire a salesperson in Poland who habitually negotiates and concludes contracts on the company's behalf, or makes decisions for it, the way they are employed would stop being enough. Such a role can create a **permanent establishment (PE) in Poland** — a tax "presence" of the company, with corporate income tax and reporting — and no form of employment removes that, whether an employment contract, an EOR or a B2B deal. What decides it is what the person does, not how they are hired.

That's a separate, important topic. We break it down — and show what to do about it — in our article on [hiring decision-makers and the permanent-establishment risk](https://certapoland.com/guides/permanent-establishment-poland-hiring-decision-makers/).

## Before you decide: five things to check

Before you choose a route, it's worth checking five things — the same ones we went through with Hans:

- **The employee's tax residency** and the applicable double-tax treaty — this governs income tax.
- **The basis for the contribution mechanism** — the direct-employment model, with the employee as technical payer, works for employers from the EU, EEA and Switzerland; from outside that area (e.g. the US) we check case by case, on a different footing.
- **The scope of the role for PE** — whether the employee negotiates or concludes contracts on the company's behalf, and whether the way they work creates a fixed place of business in Poland.
- **Whether employment at all, or another model** — sometimes the right answer is a subsidiary after all, and we'll say so.
- **Where the work is actually performed** — if the employee works not only in Poland (e.g. service trips abroad), the rules on work in several states apply and a separate document (an A1 certificate) may be needed; that has to be checked too.

An honest answer to these questions is worth more than a quick "sure, it's doable".

## Have a candidate in Poland and thinking about a subsidiary? Let's do the maths first

Like Hans at that board meeting — before you spend the first euro on registering an entity, it's worth checking whether your case qualifies for the simpler, direct-employment route. **Book a free assessment** — we'll tell you honestly which route fits your situation, including if a subsidiary turns out to be the better one.

[Book a free assessment →](https://certapoland.com/book-assessment/)

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**Related:**

- [Hire an employee in Poland without your own entity](https://certapoland.com/hire-employees-in-poland/)
- [Social-security (ZUS) obligations of a foreign employer in Poland](https://certapoland.com/social-security-compliance-poland/)
- [Packages and how the routes compare: Assessment / Setup / Ongoing](https://certapoland.com/employer-setup-compliance/)

*This page is general information about a service, not legal or tax advice. Figures are indicative; Certa confirms scope and pricing in writing after assessing the specific case. The specifics of your case are confirmed case by case, with licensed legal and tax advisers where the law requires it.*

## Sources

- ZUS — Social insurance, payer registration and coordination of systems: https://www.zus.pl
- Biznes.gov.pl — Registration of businesses and companies, KRS, formalities: https://www.biznes.gov.pl
- EUR-Lex — Regulations (EC) 883/2004 and 987/2009 on the coordination of social security: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32004R0883
- Podatki.gov.pl (KAS / Ministry of Finance) — PIT, tax residency, double-tax treaties: https://www.podatki.gov.pl