The decision to start a company in Poland is a promising option for entrepreneurs who want to enter the European market and significantly expand the sphere of interaction with customers and partners. Over the past decades, Poland has significantly strengthened its economic position, achieved political and social stability. This jurisdiction is attractive in terms of investment, purchase of real estate and ready businesses, establishing branches of foreign firms and enterprises from the ground up.
We will find out how the registration of companies in Poland is carried out, which areas of activity are the most profitable, and which taxes will have to be paid.
Advantages of setting up a company in Poland
The Republic of Poland is a state in Eastern Europe. Member of the European Union, part of the Schengen area. Enjoys access to the Baltic Sea. Total area is 312 679 sq. km. The population is 38.6 million people. The capital is Warsaw. The official language is Polish. The national currency is Polish zloty (PLN).
The country has a developing economy with active support for private entrepreneurship. The legislation fully complies with the high EU standards. The economic development of the country is supported by deep social reforms. Stable growth has been observed for 30 years that lead to doubling GDP since 1990.
The leading industries are mechanical engineering (production of fishing vessels, electric trains, machine tools, electronics, etc.), non-ferrous and ferrous metallurgy, chemical and textile production. The country has a highly developed agriculture - grain crops, sugar beets and fruits are grown here.
The business environment is transparent and understandable. Registration of a company in Poland and active business activities allow the owner to apply for a residence permit. With this status, an entrepreneur and his family can freely travel through the countries of the Schengen area, in the future to obtain permanent residence or citizenship of the republic. In addition, businessmen have all the rights to obtain loans from local banks and can use beneficial leasing programs. You can buy real estate in the country in the name of the company.
The main advantages of starting a business in local jurisdiction include:
- Access to the leading European markets and a radical expansion of the scope of activities;
- the business owner and his family automatically receive a Polish business visa;
- loyal requirements for the authorized fund;
- opportunity to get an entrepreneurial loan on advantageous terms;
- refund of value added tax;
- multiple entry to the territory of the European Union without time limits during the validity period of a business visa;
- the ability to purchase real estate with a quick processing of the transaction;
- prospects for obtaining citizenship for business and real estate owners in Poland;
- relatively fast registration procedure - it is allowed to go remotely on the basis of a power of attorney through a representative.
Business in Poland is regulated by the local Commercial Companies Act. The fundamental principles play in favor of entrepreneurial activities and are easy to understand.
The most profitable business sectors in Poland are catering, grocery stores, beauty industry, printing services, vending machines, educational services (online), information technology. But construction business, sale and production of clothing, entertainment industry are promising niches, but they are already well mastered by local entrepreneurs.
A preferable form of doing business for foreigners is the Polish version of LLC – Spolka z ograniczona odpowiedzialnoscia (Sp. z o.o.). This format is suitable for any business activity within the framework established by law.
There are other options as well:
- Spolka cywilna (partnership). Several founders are allowed, suitable for small and medium businesses.
- Spolka jawna (full format partnership). For conducting business on a large scale.
- Spolka partnerska (partnership). Participants can engage in their own commercial projects within the charter.
- Spolka akcyjna. Analogue of a joint stock company. To attract large funds and conduct large-scale business.
- Spolka komandytowa. Limited partnership – an entity combining the features of full partnership and a company with authorized capital
It is challenging for foreigner to become a private entrepreneur in Poland (Jednoosobowa dzialalnosc gospodarcza), although this is the most popular BLS among the local population. Persons with foreign citizenship will need a Pole’s card (document confirming Polish origin) or a residence permit.
All companies registered in Poland are considered tax residents of the company.
The following taxes are provided:
- Income tax for legal entities (profits tax, VAT exc). The base is calculated according to the standard formula: expanses are deducted from the turnover.
Since 2020 there are two rates:
- basic — 19%, for companies with annual income of more than 1.2 million EUR,
- reduced — 9% for companies with annual income of up to 1.2 million EUR.
- VAT – 23% (basic rate). Preferential rates are applied for certain goods and services - 8% (hotel business, passenger transportation), 5% (grocery, food, growing some crops), 0% (socially important goods and services).
- On dividends – 19%. Payments received from residents of Poland and EUR countries are exempt from tax.
- On ownership of large real estate – 0.035% of the purchase price.
Taxes are levied on the entire worldwide income of Polish companies, regardless of the source of income. Poland has agreements on the avoidance of double taxation with 80 jurisdictions.
Requirements for companies
Let’s consider the basic requirements for companies using the example of the most common BLS — Sp. z o.o. (ООО):
- director – one or several individual persons or legal entities (can be foreigners);
- shareholder – one or several (no requirements for citizenship of the members of the management board;
- beneficiary, shareholder and director can be one person;
- remote registration is possible on the basis of a power of attorney;
- the director and shareholder do not need a work permit if they do not intend to be on the territory of the republic for more than 182 days a year;
- legal address for the company is obligatory, but it can be virtual;
- contribution of the authorized capital is obligatory, minimum amount is 5 000 PLN (approximately 1250 EUR), tax on the authorized capital is 0.5%;
- registration in ePUAP electronic system of government services to obtain an digital signature. This allows business to solve many issues via the Internet and interact with the government remotely. Registration also works as a confirmation at the Consulate of the trust profile, if the founder is not in the country;
- it is obligatory to obtain a PESEL - tax identification number;
- appointing a secretary is optional.
Firms must annually hold meetings of shareholders (directors) and submit financial statements after conducting audit.
It is allowed to start a business with the participation of foreign capital (such companies are called Joint Venture). There are no requirements for the amount of foreign capital in the legislation, so that assets can entirely consist of foreign investment. However, if more than 50% is owned by foreign capital, the company is recognized as a foreign entity. Enterprises employing more than 50% of foreigners receive a similar status.
List of documents and plan of actions
List of documents for registration of a legal entity:
- name of company (unlimited in order of priority);
- description of the company’s activities;
- ID cards (color scanned copies) of the director and shareholder;
- proof of residence of the director and shareholder (utility bill/bank statement not older than 3 months);
- power of attorney (if registration takes place remotely through a representative);
- if the shareholder is a legal entity, apostilled corporate documents, scanned copies of passport of the director, final beneficiary, confirmation of their residence addresses are required.
All documents must be translated into Polish and certified by a notary.
There are two ways of registration - in-person and remote. In the second case, a digital signature is required.
Setting up a company begins with the choice of its name, which must be unique. Founders are obliged to independently find out in the local online register if there are companies with identical or similar names in Poland. It is especially worth checking for overlaps in the regions (voivodships) in which you intend to operate.
Then a settlement for registration is selected - in this regard, the choice is large, but it all depends on specific features of the business. You can open both a physical and a virtual office. The first option is more profitable in terms of taxation - it is easier to obtain the status of a VAT payer. However, in this case, you will have to spend money on renting premises and employee recruitment. Virtual office is the service of a specialized company that remotely manages your affairs, receives and processes correspondence.
Both Polish citizens and non-residents who have reached the age of 18 can be the owner and co-founder of the company. Registration of organizations with one participant is allowed, if he is also a final beneficiary of the company.
As for the period of registration, on average the whole procedure takes about 4 weeks.
Professional assistance in business registration from Beforis
Business registration in Poland is a challenging procedure even for experienced entrepreneurs. The timing of this activity will vary depending on how long it takes for each step in the process. Polish registration authorities scrutinize documents and business participants. The slightest inaccuracies in paperwork lead to their return or complete refusal of registration. In such cases, entrepreneurs have to start all over again. At the same time, success with a repeated application is not guaranteed.
Beforis team will help you speed up the process and increase the chances of a favorable outcome. Experienced employees will undertake full support of the process of setting up a company:
- prepare a package of corporate documents and power of attorney for remote registration,
- receive a personal identification number (PESEL) and digital signature,
- pay all state fees,
- enter the company into the official register of legal entities - Krajowy Rejestr Sadowy.
- provide a registration address.
If necessary, Beforis specialists will also deal with accounting support: accounting, preparation and filing tax returns, communication with the tax service.
If you are interested in cooperation, send a request for a free consultation using feedback form or email to firstname.lastname@example.org.