Poland, officially the Republic of Poland, is a country located in Central Europe. It is divided into 16 administrative provinces, covering an area of 312,696 square kilometers, and has a largely temperate seasonal climate
Poland is a developed market and middle power. It has the sixth-largest economy in the European Union by nominal GDP and the fifth-largest by GDP (PPP). It is ranked very high in the Human Development Index and provides a high level of safety and economic freedom, as well as free university education and a universal health care system. The country has 17 UNESCO World Heritage Sites, 15 of which are cultural. Poland is a member state of the Schengen Area, European Union, European Economic Area, the United Nations, NATO, the OECD, the Three Seas Initiative, and the Visegrád Group.
Poland is a country that is familiar with important changes and constant progress. The country managed to take the necessary steps to recover after the communist regime and nowadays has one of the largest markets in Europe and valuable economic potential. Entrepreneurs who want to open a company in Poland can choose the appropriate business form based on their needs. Moreover, businessmen who need legal services in Denmark or company incorporation services can receive assistance from our Danish partners
Poland is a country that has proven its stability during the financial crisis and also a location that offers promising opportunities for investors. The business climate, as well as the economic competitiveness, have been improving over the last years and now the country has a successful economy, a large internal market, offers access to the skilled labor force, and offers attractive conditions for doing business in preferential areas throughout the territory.
What you should be aware of before registering your business in Poland??
Check if you need to register your company
It is not always necessary to register a business. Check out the cases in which you should set up a company. If you do a small business and your revenues do not exceed 50% of the minimum wage throughout the year, you can run a so-called non-registered business and you do not have to report it to the office.
Choose the type of company taxation
As an entrepreneur, you will have the choice of several forms of taxation. Choose one that allows you to pay the lowest possible taxes. Remember that you will not be able to change it at any time. When registering, you will need to specify not only the form of taxation but also the method of paying tax advances (monthly or quarterly). The type of accounting you use for your business will also depend on the tax you choose. If you did not have a NIP, you will receive it automatically upon registration - you do not need to apply for a NIP additionally.
Think about when you want your business to start
In your application for company registration, you must enter a specific date of commencement (which may be later than the date on which you file your application). Register your company if you have sufficient funds to run it, an equipped office, and a business plan for your company. Remember that with registration you take over the duties of an entrepreneur concerning, among others, the payment of social security contributions. Why is the start date so important? If you take advantage of the ZUS start allowance and, for example, set up a company at the beginning of the month, then the period of 6 months without ZUS social security contributions will start to count. However, if you register your activity in the middle of the month, the 6-month discount period will not start to run until the next full month.
Choose a good name for your company
Every activity must have its own name (company name). It should be simple and easy to remember. For the simplest activities, the name must include your first and last name. Before you register, you can check on the Internet whether someone is using the name of your choice.
Think about where you want to open a business account
Before you register a company you can check which bank offers the best conditions for a business account. You can use a private account, but a separate account for your company is much more convenient. Some banks allow you to open a company account before you register. In others, you will only be able to do this after you have registered your company. Once you have opened an account, you will need to report the account number to the office.
Types of companies in Poland
The Polish limited liability company is incorporated by at least one member and requires a minimum share capital of 5000 PLN. This form of business is popular due to the liability of its members, the accessible share capital, and the fact that it can start concluding contracts of performing other commercial actions in a short amount of time. It is compulsory for the name of the company to be followed by the termination “Sp. z.o.o.” - the short form of the company name. A limited liability company in Poland must have a management board consisting of at least one person. Foreign directors are not conditioned as there are no residency requirements for those who activate on the management board of a company. In some cases, non-EU board members may require a work permit in Poland to be able to perform this function. The supervisory board (made up of at least three individuals) is compulsory when the company has an initial capital of more than 500,000 PLN and more than 25 shareholders.
As far as the management of a Polish LLC is concerned, the corporate bodies are the management board and the shareholder’s meetings for which a simple majority of 75% suffices in order to pass resolutions. Major corporate decisions are taken with a 75% or a two-thirds majority. Employees can only have a say in corporate decisions if they are shareholders.
The Polish joint-stock company is generally preferred by large businesses and can have one or more founders. The minimum share capital for this type of company is 100,000 PLN, out of which 25% must be paid up at the time of the incorporation. When the contributions to the capital are also made in kind, they must be paid in full no later than one year after the incorporation of the legal entity. An important consideration for this type of business is that it can be listed on the Stock Exchange and the minimum nominal value of each share must be 0.01 PLN. The management bodies of a Polish joint-stock company are the management board, the shareholder’s meeting, and the supervisory board. The management board is to, be composed of at least one individual and, like in the case of the LLC, there are no residency requirements. In some business fields, there are special requirements that the management board members are Polish speakers. This applies in the case of registered banks in the country for which at least two members of the board, out of which one is the chairman, must have sufficient knowledge of the Polish language for adequate working purposes.
As far as the management of a joint-stock is concerned, a majority of 50% is needed to approve the actions taken by the shareholder’s meetings and 75% for important decisions like amendments to the articles of association, capital increase or decrease, and mergers and acquisitions in Poland. The supervisory board is the one that constantly supervises the joint-stock.
The general partnership has no legal personality and is preferred by small businesses as it does not require a minimum capital for incorporation. It requires the presence of at least two entities or partners. The partners are fully liable for their obligations up to the full value of their assets. The limited partnership can be formed by at least two founders or between two different types of entities (a natural and a legal person). The limited partnership bears full liability for its actions.
The limited liability partnership can be set up only by individuals who have obtained the right to practice a freelance profession, like physicians, architects, lawyers, or accountants. It does not have a legal personality and does not require a minimum share capital. The limited joint-stock partnership combines an active partner (the general partner) and a shareholder, or passive partner. The minimum share capital for this type of partnership is 50,000 PLN.
The steps for incorporating a company in Poland
The company incorporation procedure varies according to the type of company, however, the procedure can generally be completed within one month.
- Choose the business form and name: once investors choose the appropriate business form they should also check if the business name is available; this is important as all company names in Poland need to be unique.
- Draw up the Articles of Association: once the preliminary decisions are handled, investors can start by drafting the constitutive documents. These will represent the instrument for forming the company and will contain the principles for functioning, will state the business type, the names of its founders, the purpose of the company, and many other details. These will be notarized and the notary fees may vary across Poland.
- Deposit the share capital: business owners must open a separate bank account for their company and must deposit the minimum share capital.
- Appointment: for some types of business entities it is necessary to appoint the management board and also a supervisory board.
- Registration: the newly created company must be registered at the National Court Register, after which it will receive a company ID, the EGON number, the NIP, and statistical number.
- Tax registration: the company also needs to perform the VAT registration according to the applicable annual turnover values.
- Special permit application: some companies will need to apply for special permits and licenses, according to the type of business activity; one of our company registration lawyers in Poland can help you with information about these requirements according to the company’s specific activities.
Company tax in Poland
The main taxes applicable to companies in Poland are the corporate income tax, the value-added tax, the stamp tax, real estate tax, and excise duty. Foreign companies are subject to the same taxes as local companies, however, when a double tax treaty applies, a foreign entity may benefit from a certain level of tax relief, as described in that agreement. The EU Parent-Subsidiary Directive is relevant to the taxation of foreign legal entities in the country.
The Polish corporate income tax rate is 19% (in 2018) and it applies to the worldwide income of resident companies and the Polish-sourced income for non-resident companies. a lower corporate tax rate of 15% can apply to small companies in Poland. However, this provision is subject to certain conditions.
Both employers and employees are required to make social security contributions, up to a certain percentage of the salary (approximately 35%).
For tax compliance purposes, the tax year in Poland is the same as the calendar year or any other twelve-month period, as chosen by the taxpayer. Grouping for taxation purposes is possible for companies in Poland.
Frequent Asked Questions about Polish Company Formation
1. Can a foreigner open a company in Poland?
Poland has a good foreign investments policy and welcomes foreign entrepreneurs. The Special Economic Zones are the best indicator that the Government is taking steps for encouraging foreign companies.
2. What are the types of companies that can be incorporated in Poland?
The limited liability company, the joint-stock company, general partnership, limited liability partnership, limited partnership, limited joint-stock partnership, civil partnership, or sole proprietorship are all available business forms in Poland.
3. Does the company need to have an office in Poland?
Yes. A registered office is needed for any company incorporated in Poland.
4. What are the steps for company formation in Poland?
After choosing the appropriate company type the business owner must find a suitable and available business name. The company must be registered at the Polish Trade Register and it must also be registered for VAT purposes.
5. What is the minimum share capital in Poland?
The minimum share capital for a limited liability company is 5,000 PLN while for a joint-stock company this capital is larger, at 100,000 PLN. Certain types of partnerships in Poland will also require a minimum share capital.
6. What are the requirements for opening a bank account in Poland?
The company representative must provide company documents in order to open a bank account for the company. The process can be done online for most banks in Poland and the administration fees for the account will vary according to the chosen bank.
7. Do you need special permits and licenses in Poland?
Permits, licenses, or authorizations are needed for certain activities like banking, pension funds activities, and those in other investment funds, insurance activities, or collective water supply or waste removal activities.
8. What are the taxes for companies in Poland?
The corporate income tax in Poland has a rate of 19%. Other Polish taxes include the real property tax, capital duty, stamp duty, transfer tax, and others.
9. How fast can you start a new business in Poland?
The company incorporation process can last 30 days, at most. With the help of our team of Polish company formation consultants, you can begin business activities as soon as possible.