Case study, the two-company holding structure where the biggest risk hides

In short and to the point:
  • In June 2026 we audited a structure where a foreign parent company signs B2B contracts and pays a fee to a group of several dozen contractors in Poland, while a Polish subsidiary provides the office, equipment, insurance, and HR administration. Using our risk scale, we found 5 critical factors, 4 high-risk factors, and 2 medium-risk factors with critical consequences, all at once.
  • The parent company and the subsidiary carry different risks: the parent covers the markers of employment in pay and scheduling, the subsidiary covers the markers in work organization and social security. Together these markers add up to the full set of criteria under Article 22 § 1 of the Polish Labor Code (the four classic markers of an employment relationship)¹.
  • Paying the fee from abroad doesn’t take either company out of scope: what matters isn’t the currency or the payer’s country, but which company actually organizes the day-to-day work.
  • The two-company structure itself doesn’t split the risk in half, it adds a separate, third layer: the risk of the parent company being deemed to have a permanent establishment in Poland for CIT (Corporate Income Tax) purposes².
  • Some of the contractors in the model we reviewed held a residence card based on a JDG (Jednoosobowa działalność gospodarcza, the Polish sole proprietorship): for them, reclassification threatens not just money but the basis of their stay in the country.
  • Before 8 July 2026, when the new PIP act took effect, structures like this almost never faced court-ordered reclassification: according to an international law firm’s assessment, in 2023-2025 PIP filed only 18-52 employment-relationship lawsuits per year across all of Poland³. Automatic data-sharing between ZUS, PIP, and KAS changes that statistic precisely for models like the one described here.
  • Five of eleven factors required immediate changes before 8 July 2026, the rest within a quarter of the audit date.

In this article, PIP (Państwowa Inspekcja Pracy, the Polish National Labour Inspectorate) refers to the authority that, since 8 July 2026, has had the power to independently reclassify a B2B contract as employment; ZUS (Zakład Ubezpieczeń Społecznych, the Polish social insurance institution) administers insurance contributions; and KAS (Krajowa Administracja Skarbowa, the National Revenue Administration) exchanges invoice data with them. We cover the act itself in detail in the series pillar article, “PIP 2026 in Poland: the complete guide for B2B contractors”.

The structure we reviewed

The two-company model we reviewed looked like this: a foreign parent company signs the B2B contracts and pays the fee, while a Polish subsidiary actually organizes the work on the ground. This is a common setup for product IT companies, consulting, and outsourcing, when an owner wants to hire a team in Poland without opening a full local office of the parent company. The client in this case remains anonymous: what follows describes the risk structure, not the company’s name.

The division of functions between the two entities looked like this:

FunctionWho performed it
Signing the B2B contract and paying the feeForeign parent company
Office and equipmentPolish subsidiary
Administering leave and sick days through an HR platformPolish subsidiary
Health insurance and social benefitsPolish subsidiary
Day-to-day management and reportingBoth companies together

The contractors, developers, a product manager, and several DevOps specialists worked in Warsaw on a hybrid schedule and effectively acted as the product company’s team, even though formally none of them had signed anything with the Polish subsidiary.

A formal signature on the contract doesn’t determine who bears the risk. What matters is which company actually organizes the work day to day.

Risks attributable to the parent company

In this model, the parent company bore the markers of employment in scheduling and pay, and these are exactly the markers a PIP inspector spots fastest, because they’re directly visible in KSeF data (Krajowy System e-Faktur, the National e-Invoice System).

Factor 1: a standardized 8-hour working day. Contractors worked a fixed number of hours set by the parent company, rather than one that flowed from the scope of tasks. A standard 8-hour norm is a direct copy of the full-time hours standard in Article 129 § 1 of the Labor Code¹. Combined with stable pay, this gives an inspector the full picture of employment without further analysis.

Factor 2: the same invoice amount every month. The fee didn’t depend on the volume of work done. A fixed amount for the mere existence of the contract, rather than for a result, is one of the strongest markers of employment in Polish court practice. Since 1 April 2026, KSeF has been mandatory for the vast majority of VAT payers⁴, meaning an inspector automatically sees identical invoices from one company to one buyer, with no need to request documents.

Factor 7: the recruitment agency only offered B2B positions, with no alternative. The company sourcing contractors for this model offered only the B2B format, with no employment-contract option. The new Article 22 § 1² of the Labor Code (in force since 8 July 2026) directly prohibits forcing someone into a civil-law contract when the actual working conditions match the markers of employment⁵. A contractor can demand recognition of employment through the courts, and the fact that no alternative existed at all strengthens, for both a PIP inspector and a court, the picture of deliberate avoidance of an employment contract rather than an incidental choice of cooperation format.

Factor 9: the contract template hadn’t been reviewed in three years. The contract signed by the parent company accounted for neither the new working practice (the HR system, equipment from the subsidiary, the office) nor the new requirements of the PIP act. The gap between the contract’s text and actual practice is further evidence that the B2B form exists only on paper in this case.

Risks attributable to the Polish subsidiary

In this model, the Polish subsidiary bore the markers of employment in work organization and social security, and a court treats exactly these functions as the hardest to defend, because they directly match the definition of an employer under Article 3 of the Labor Code.

Factor 3: equipment from the subsidiary from day one. Every contractor received a corporate laptop from the Polish subsidiary from their first day of cooperation. The subsidiary, not the contractor, depreciated the cost of work tools, a classic marker that it is the subsidiary, not the formal signatory of the contract, that organizes the work process under Article 22 § 1 of the Labor Code¹.

Factor 4: an HR platform for leave, sick days, and unlimited paid time off. Contractors submitted leave and sick-day requests through the subsidiary’s corporate HR system, and a manager approved the request without changing the fee rate. Three elements combined make this one of the heaviest factors in the whole audit: using an HR system built specifically for employees, a manager approving leave (a marker of subordination under Article 100 § 1 of the Labor Code), and an unchanged rate during leave (a direct marker of paid leave under Article 152 of the Labor Code)¹.

Factor 5: health insurance and social benefits from the subsidiary. The subsidiary paid for health insurance and meal benefits for all contractors. Such benefits create an employer-employee relationship specifically with the subsidiary and, at the same time, generate taxable employment income for the contractor, regardless of the fact that the invoice goes to the parent company.

Factor 6: an office paid for by the subsidiary and a mandatory hybrid schedule. Contractors worked on a “part of the week in the office, part remote” basis, and it was the company, not the contractor, that set that ratio. A place and time of work set by the client are two of the four classic Article 22 § 1 Labor Code markers at once¹.

Factor 10 (critical consequences for foreigners): a residence card based on a JDG. Some contractors in the model held a residence card specifically on the basis of running a JDG. If a PIP inspector reclassifies the contract, the basis for that residence card disappears, triggering a separate procedure before the voivode and a risk of a gap in legal stay between losing the old basis and obtaining a new one⁶.

Why paying from abroad doesn’t save either company

The currency of payment, the parent company’s country of registration, and even the choice-of-law clause in the contract don’t change the applicability of Polish labor law if the contractor physically works in Poland. We broke down this mechanism in detail in the series article “The ‘two companies’ model (parent and subsidiary): why it doesn’t protect against PIP”, and the same principle applies here, on a specific set of facts.

Regulation (EC) No 593/2008 “Rome I” establishes that the protective rules of the country where work is actually performed apply despite a choice of foreign law in the contract⁷. This means: even if a contract is formally signed under foreign law and titled a “services agreement,” Polish labor law still applies to the actual working conditions.

Separately from this, Polish courts apply the “piercing the corporate veil” doctrine (unoszenie zasłony osobowości prawnej): if the company formally signing the contract has no assets of its own to organize the work, doesn’t administer social guarantees, and effectively acts only as a paying agent, the company that actually manages the work process and benefits from it is recognized as the real employer⁸. The Polish Supreme Court directly established this principle in a resolution of seven judges dated 23 May 2006 (III PZP 2/06), and has applied it consistently in subsequent cases, including a ruling dated 18 September 2014 (III PK 136/13)⁸.

The name of the company transferring the fee doesn’t matter to an inspector. What matters is which company issued the equipment, approved the leave, and set the schedule.

At the same time, it’s important not to oversimplify: the mere existence of a capital link between the parent and the subsidiary doesn’t create automatic joint liability for both. The Polish Supreme Court, in a resolution dated 16 June 2016 (III UZP 6/16), directly established that the employer is a specific company within a corporate group, not the entire holding⁹. In the model we reviewed, the risk didn’t arise from the mere existence of two companies, but from the fact that the Polish subsidiary actually performed four of the six classic employer functions at once: equipment, HR administration, insurance, and the office.

Why the two-company structure itself is a separate risk, not protection

A two-company structure doesn’t split the reclassification risk in half between two entities, it distributes the markers of employment between them and adds a third, separate layer of risk: a permanent establishment for CIT purposes.

The CIT Act defines a foreign establishment (zagraniczny zakład) as a fixed place through which a foreign entity conducts business in Poland, or as a dependent agent who actually organizes that business in its interest². If the Polish subsidiary provides the office, staff, and day-to-day management in the parent company’s interest, tax authorities may treat this as an indication that the parent has a permanent establishment in Poland, triggering an obligation to register as a CIT payer and to tax part of its profit in Poland. Assessing this risk always depends on the specific double-taxation treaty between Poland and the parent company’s country, so a final conclusion requires a separate tax analysis.

We’ve already written, in the series article “Who risks losing B2B status after the PIP 2026 reform,” that companies with dozens of contractors on the same model face systemic risk: the expanded Article 13 of the PIP Act lets an inspector check all of an employer’s contractors from the past year at once, not just the one who filed a complaint¹⁰. In a two-company model, this systemic risk isn’t reduced, it’s multiplied across the number of contractors twice: once under labor law for each individual contract, and once under tax law for the group structure itself.

The profile of nearly every contractor in the model we reviewed matched what we call a “single-client contractor embedded in a team” in the series article on risk profiles: one client for years, a fixed schedule, a spot on the team next to full-time processes. That’s the highest-risk of the five profiles we described there.

A second legal entity doesn’t split the risk in half. It simply adds a second bill that will have to be paid if the first one has already shown the markers of employment.

Whiteboard diagram explaining a two-company holding structureWhiteboard diagram explaining a two-company holding structure

How much reclassification costs in a model like this

The financial risk of reclassification for a group with several dozen contractors at once is measured in millions of złoty, not thousands, because each contract carries its own exposure rather than a shared one.

Using the methodology we detailed in the series article “B2B contract audits before PIP: what lawyers check and what it costs,” reclassifying a single B2B contract with a net rate of about 15,000 zł per month, in force for several years, typically costs an employer over 300,000 zł: ZUS arrears with interest, the equivalent of unused leave, and a fine¹¹. ZUS can claim arrears going back up to five years, not three as is sometimes mistakenly stated: the exact limitation period is set by Article 24 sec. 4 and sec. 5h of the Act on the Social Insurance System¹².

Multiply that figure by several dozen contractors at once, and the group’s combined financial exposure climbs into the millions of złoty, even before accounting for separate PIP fines for each violation (from 2,000 to 60,000 zł, or up to 90,000 zł if the affected worker is registered as a maintenance debtor in the National Debtors Register)¹³, and without the cost of legalizing foreigners whose residence card has lost its basis. This figure is illustrative and depends on the specific rates and terms of each contract, but the order of magnitude, millions rather than hundreds of thousands, remains typical for models of this scale.

We split the recommendations into two tracks by deadline.

Before 8 July 2026 (urgent):

  1. Review the B2B contract template and remove wording that directly describes relationships characteristic of employment.
  2. Switch from a fixed monthly fee to an hourly rate with a timesheet, or milestone-based payment, so invoiced amounts differ between months.
  3. Move contractors off the subsidiary’s corporate HR system and replace it with a separate procedure for notifying breaks in service through a contract amendment.
  4. Move health insurance and social benefits onto a commercial basis: the contractor takes out their own policy and gets reimbursed against an invoice, rather than receiving an automatic benefit from the subsidiary.
  5. Sign a separate equipment lease or usage agreement on market terms, or require contractors to use their own equipment.

Within a quarter of the audit (medium-term):

  1. Run a separate residence-status audit: how many contractors hold a residence card specifically on the basis of a JDG, and prepare a legalization plan for each one individually.
  2. Commission a separate tax assessment of the parent company’s permanent-establishment risk, accounting for the specific double-taxation treaty involved.
  3. Train managers: communicate with contractors through tasks and technical specifications of the result, rather than direct work orders.
  4. Change the recruitment process so the agency offers both an employment contract and B2B, and the choice of cooperation format is genuinely voluntary and documented.

Two scenarios, when a two-company structure helps, and when it doesn’t

Scenario 1. A consulting firm has a foreign parent company that signs contracts with contractors and transfers the fee. The Polish subsidiary only rents a few coworking desks that contractors visit voluntarily when they need to meet a local client. The subsidiary doesn’t issue equipment, doesn’t administer leave, doesn’t set a schedule. The contractors have several other clients and decide for themselves when and how many hours to work. Does this structure risk reclassification under the “real employer” doctrine? No. The subsidiary performs none of the functions characteristic of an employer. The formal structure here matches the actual division of roles rather than concealing it.

Scenario 2. A product company has the same formal structure: a foreign parent company signs the contracts and transfers a fixed fee every month, while the Polish subsidiary provides the office, equipment from day one, HR administration of leave, and health insurance. The schedule is hybrid and set by the company. Does this structure risk the subsidiary being recognized as the real or jointly liable employer? Yes. The subsidiary performs exactly the set of functions that a court and a PIP inspector treat as markers of work organization and social security typical of an employer. This is the structure from our case study.

The difference between the two scenarios isn’t the name of the structure or the number of legal entities, but the specific number of employer functions the Polish company actually performs.

Frequently asked questions

Is it enough to rename the contract from B2B to a “group cooperation agreement” to reduce the risk? No. The name of the contract and the number of legal entities involved don’t matter for the assessment under Article 22 § 1 of the Labor Code: the actual way the work is performed decides¹. Renaming without changing the actual organization of work doesn’t change the legal assessment.

If a contractor never signed anything with the Polish subsidiary, can it still be held liable? Yes. If the Polish company actually performs the functions of an employer, a court can recognize it as the party to the actual employment relationship regardless of who signed the formal contract⁸. The absence of a signature doesn’t exempt a company from liability when its actual conduct matches the markers of an employer.

Does reclassification in a “two companies” model affect the parent company’s own taxes? It can, separately from the labor-law risk: if the Polish subsidiary actually organizes the work in the parent’s interest, there’s a risk that the parent will be deemed to have a permanent establishment for CIT purposes, triggering registration and taxation of part of its profit in Poland². This is a separate analysis that requires a tax advisor’s involvement.

What happens to a foreign contractor’s residence card in this kind of situation? If a residence card was issued on the basis of running a JDG, and the contract is reclassified, the basis for the card disappears, and a separate procedure before the voivode begins, with a risk of a gap in legal stay during the transition period⁶. This happens regardless of which of the two companies is recognized as the real employer.

Is there time to fix the model before 8 July 2026 if an audit found this many factors at once? Some factors (the contract text, the payment method, access to the HR system) can be changed within a few weeks. The window to voluntarily switch to an employment contract penalty-free for past violations runs until 8 July 2027¹⁴, so even if some contractors are moved to employment contracts rather than having their B2B contracts fixed, there’s still over a year for an orderly transition.

Is this model typical only for IT companies? No. The “parent company abroad, subsidiary in Poland” model is typical of consulting, outsourcing, and any business where a foreign owner wants to hire a team in Poland without opening a full office of their own. The set of markers described in this case applies the same way regardless of industry.

What to do with this information

A two-company structure is exactly the case where checking a single contract doesn’t give the full picture: you need to assess how employer functions are split between two legal entities at once and, if needed, separately assess the group’s tax risk. MojaFirma offers two formats depending on your situation.

If you work through your own JDG and your client has a parent-subsidiary structure. The basic format, the online B2B audit: you fill out a questionnaire describing which company performs which functions in your cooperation, and within 48 hours receive a report with a risk category and three priority recommendations.

If you own or run HR at a company with a holding structure and several B2B contractors. You need a bigger format, the B2B operating model audit: we analyze the contracts of both legal entities, the actual split of functions (office, equipment, HR, management), and, if needed, bring in a preliminary assessment of the permanent-establishment tax risk.

Fill out the B2B audit questionnaire

See also: The “two companies” model, why it does not protect you from PIP, PIP 2026 in Poland: the complete guide for B2B contractors, How much does reclassifying a B2B contract into an employment contract cost.

Sources

  1. Kodeks pracy (Polish Labor Code), Art. 22 § 1, Art. 100 § 1, Art. 129 § 1, Art. 152
  2. Act of 15 February 1992 on Corporate Income Tax, Art. 4a item 11 (definition of a foreign establishment)
  3. The National Labour Inspectorate will soon gain expanded powers to establish the existence of an employment relationship, Bird & Bird, 2026 (statistics on PIP employment-relationship lawsuits: 18 in 2025, 35 in 2024, 52 in 2023)
  4. Act of 11 March 2025 amending the Act on Tax on Goods and Services and certain other acts, Journal of Laws 2025 item 1203 (mandatory KSeF deadlines from 1 February and 1 April 2026)
  5. Kodeks pracy, Art. 22 § 1² (added by Journal of Laws 2026 item 473)
  6. Act of 12 December 2013 on Foreigners, consolidated text Journal of Laws 2025 item 1079, Art. 142 sec. 1 (temporary residence permit for running a business); Act of 20 March 2025 on the conditions for entrusting work to foreigners in the territory of the Republic of Poland, Journal of Laws 2025 item 621
  7. Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), Art. 8
  8. Judgment of the Polish Supreme Court of 18 September 2014, case no. III PK 136/13 (the “real employer” concept, based on the resolution of seven Supreme Court judges of 23 May 2006, III PZP 2/06)
  9. Resolution of the Polish Supreme Court of 16 June 2016, case no. III UZP 6/16 (the employer is a specific company within a corporate group, not the whole holding)
  10. Act of 11 March 2026 amending the Act on the National Labour Inspectorate and certain other acts, Journal of Laws 2026 item 473, Art. 1 (expanded Art. 13 of the PIP Act)
  11. B2B contract reclassification cost simulation, Kancelaria Adwokacka Marcin Orlicki, April 2026 (illustrative example, not MojaFirma data)
  12. Act of 13 October 1998 on the Social Insurance System, Journal of Laws 2026 item 199, Art. 24 sec. 4 and sec. 5h (five-year limitation period for ZUS contributions)
  13. Journal of Laws 2026 item 473, Art. 3 (amendment of Art. 281 § 1 and § 2 of the Labor Code, fines of 2000-60,000 zł and 3000-90,000 zł where the affected worker is registered as a maintenance debtor in the National Debtors Register)
  14. Journal of Laws 2026 item 473, Art. 16 (voluntary adjustment period until 8 July 2027)

Legal status as of: August 28, 2026.

This article is not legal advice. The case is described in anonymized form, based on a real audit carried out by the MojaFirma sp. z o.o. team: the company’s name, the industry the managers work in, and the exact number of contractors have been withheld, while the risk structure and legal assessment remain unchanged. Every situation is individual and depends on the specific split of functions between the companies in the group. Author: Valerii Kushnirskyi, in-house legal practitioner at MojaFirma.