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How To Set Up A Company In Poland

If you would like to know how to set up a company in Poland, be sure to know every detail that you need.

Poland has a strong and expanding economy, a trained labor force that is less expensive than in other EU nations, and special investment zones that provide favorable tax treatment, all of which make it a desirable place for investors.

The stability of Poland has been demonstrated during the financial crisis, and the nation also presents investors with exciting investment options.

In recent years, both the business environment and the level of economic competition have improved.

The economy of the nation is now thriving, it has a sizable domestic market, and it offers favorable business conditions in strategic locations across the whole continent.

Important investment sectors include those in textiles, agriculture, automotive, food processing, manufacturing, chemicals, and, more recently, the real estate industry.

Tax grants, tax exemptions, and tax relief are all forms of investment assistance that are offered, particularly when an investment is made in a particular economic sector or when a company plans to recruit workers in an area with a high unemployment rate.

The most noteworthy real estate and income tax exemptions are found in the Free Trade Zones.

Germany, The Netherlands, Austria, Luxembourg, and France are the principal nations that have made investments in Poland over the years.

Manufacturing, real estate, technical and scientific endeavors, communication and information, wholesale and retail commerce, particularly in the automobile sector, were the primary investment sectors in 2016.

Moreover, Poland has a more significant number of double tax treaties signed with other nations, which encourages foreign investment in terms of taxation.

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).

Why Set Up A Company In Poland

Poland used the money it got from the EU to invest in its roads and highways, and this decision paid off: the nation today has a robust infrastructure that enables effective and reasonably priced transportation services.

Another great asset Poland has is its labor force, which is paid around one-third less than what Western European nations pay for comparable services.

This is the rationale for the decision made by significant multinational corporations to establish headquarters here and employ Poles. Just two corporations that recently constructed new logistics facilities in Poland are Amazon and Procter & Gamble.

With the end of the communist government, Poland continued to advance.

The nation is becoming a popular destination for international investors after effectively catching up to other competing countries in the region.

There are several avenues for investment help for those who decide to start a business in Poland.

They are generally accomplished through regional, international, and national incentives, as well as through EU cash since the nation is a significant recipient of EU funding for specific initiatives.

Following are some of the critical channels for support:

Cash Incentives: Companies may be eligible to obtain financial aid for a variety of initiatives, new investments, or the implementation of staff training;

Equity: offered to Polish companies or for important initiatives (subject to some terms and conditions);

loans: Companies participating in environmental initiatives or small and medium-sized companies active in technical advances may be eligible for preferential loans (subject to some terms and conditions);

Tax Exemptions: Tax breaks and deductions are available to companies engaged in both research and development and new investment.

It is helpful to keep in mind that the primary business areas that receive focused support are human resources, the environment, research and development, and innovations.

Poland’s Special Economic Zones are locations where companies may take advantage of tax breaks.

The extent of the exemption can range from 10% to 50% for major enterprises, from 20–60% for medium-sized companies, and from 30%–70% for small and micro companies, depending on the precise location of the investment and the size of the organization.

During specific predetermined time periods, such as 10, 12, or 15, the personal or corporate income tax exemptions may be given.

Talk to an expat financial planner if you require further services, such as help with your immigration to Denmark.

Can A Foreigner Set Up A Company In Poland?

how to set up a company in poland
Polish people in their traditional clothes. Image from Wallpaper Flare.

Many factors apply. In this regard, the legislation separates foreigners into two broad categories: some may engage in economic operations in Poland in the same manner as Polish residents, while others would be subject to various restrictions.

It is conceivable for foreigners from countries that are signatories to the Agreement on the European Economic Area to engage in and carry out economic activity according to the same standards.

The same holds true for the countries named in article 4 section 1 of the Act on the Principles of Participation of Foreign Entrepreneurs and Other Foreign Persons in Economic Turnover in the Territory of the Republic of Poland, including the United States, the Netherlands, and Sweden, among others.

What Are The Types Of Companies In Poland?

Investors are free to select the numerous business structure options in Poland that best meet their demands. The following list outlines the primary characteristics of several company kinds in Poland:

Limited Liability Company. This is also called the  Sp. z.o.o. Small and medium-sized firms should choose this business structure since the founders’ liability is limited to the amount of cash they placed in the company.

Joint Stock Company. The SA is a limited liability corporation as well. Investors’ liability is restricted to the amount of money they have deposited, but the public one may also list on the Stock Exchange.

Partnerships. They are available in various forms, including limited and general partnerships. There are many levels of responsibility for the founders.

Sole Trader. This is the most straightforward business structure, but it also carries the most significant risk of personal liability for the creator.

Because of the restricted liability (only up to the number of capital contributions) and suitability for small and medium firms, the Sp. z.o.o is a recommended business structure.

5,000 PLN in minimum share capital, which is lower than the joint-stock requirement, is required for this form of corporate organization. Before registering, the capital must be deposited.

Opening this firm just requires one shareholder and one director. Maintaining a registered office in Poland is a unique necessity for the Sp. z.o.o.

Investors who are interested in starting a business in Poland should be aware that partnerships are another category of legal organizations, and that in order to create one, at least two parties must come together.

There are two sorts of partnerships: general and limited.

In a general partnership, all of the founding members are responsible, however in a limited partnership, only the general partner is responsible; the other will take the role of a quiet partner.

Foreign companies that could open offices in Poland are referred to as Polish Branches, Subsidiaries, or Representative Offices.

The ability to do business and the degree of independence from the parent corporation are the main distinctions between these.

For instance, the representative office may only be utilized for market research or corporate promotion; it may not be used for commercial purposes.

The branch is only an overseas extension of the parent business and is totally reliant on it.

In terms of autonomy, the subsidiary is a locally incorporated firm that will operate in Poland under the same legal authority as the foreign business and engage in the same type of commercial activity.

Investors should get specialist counsel before deciding to incorporate one of these kinds of legal companies since the distinctions between the various company forms in Poland are crucial for conducting business.

Having a registered office is a requirement for the corporate entity that created the Spzoo and the SA, as well as at least one shareholder and one director.

A power of attorney can be used to designate a representative for foreign investors who are unable to be present for the entirety of the business registration process.

For the purpose of opening a bank account where the startup capital will be placed, the founder’s presence may be required.

How To Set Up A Company In Poland

STEP 1: Prepare The Basics

Choose the future company’s name.

Together with information on the number and value of shares, determine the share capital amount.

Please be aware that the minimum share capital requirements vary depending on the legal structure you choose for your future firm.

For example, in a limited liability company, the share capital must be at least 5.000 zlotys and each share must be worth at least 50,000 zlotys, but in a simple-joint stock company, the share capital can only be as little as 1 zloty.

Prepare the personal information of those who will buy shares in the firm, together with details on how many shares each shareholder will buy.

The majority of the time, a firm’s partners can be both another corporation and a natural person.

It will be required to furnish us with an extract from the registry of entrepreneurs functioning in your nation if you decide that another firm will purchase shares in the company.

Find the company’s address, which is given by the city. Also, you must have an office. If you do not require a real office, renting a virtual office is simple.

Create a list of the personal information for the management board members and their chosen method of representing the business.

There may be one or more members of the Management Board. The number of Management Board members may be specified in the articles of organization.

There are regulations that offer broad guidelines for performing management operations if the articles of organization do not contain any requirements in this respect.

For instance, in a limited liability corporation, the cooperation of two Management Board members or one Management Board member and a proxy is necessary to submit statements on behalf of the firm, unless the articles of association indicate otherwise.

STEP 2: Register The Company In The National Court Registry

How To Set Up A Company In Poland
Register your company. Image from Pix4free.

Your business must be included in the National Court Registry, as are all companies in Poland.

The National Court Registry discloses information on the company’s management team, supervisory board (if applicable), and shareholders, among other things. Also, the company’s financial accounts must be submitted to the Register once a year.

Business transactions are made easier by the National Court Registry, which also provides assurance of the company’s representation and financial standing.

The National Court Registry also makes it easier to buy and sell companies, locate oneself in a company’s financial structure, and make wise investment choices.

Any change to a corporation, such as a change to the management board’s makeup, an amendment to the articles of organization, or a change to the capital, must also be continuously recorded in the National Court Record.

STEP 3: Register The Company In The Central Registry of Real Beneficiaries

It will be required for the firm to register in the Central Registry of Real Beneficiaries when it is established in Poland.

Information about beneficiaries—human beings who directly or indirectly manage the company—is gathered and processed using the Central Registry of Real Beneficiaries (CRBR) system.

Combating money laundering and terrorism funding is one of CRBR’s primary responsibilities. You must register with CRBR.

An application for a PESEL number, which serves as a natural person’s identity number, must be submitted in order to create an entry in the CRBR.

STEP 4: Set Up A Bank Account For The Company

It will be essential to open a bank account for the business in order to maintain accurate accounting records after completing all the procedures associated with establishing a company in Poland.

There may be additional paperwork needed depending on the way the company is represented and if the members of the Management Board will be people who live in Poland or elsewhere.

Members of the Management Board who are Polish nationals or foreign nationals who reside in Poland must go to the bank branch to sign a document creating a bank account for the business.

To avoid having to go to Poland, it will be necessary to provide a power of attorney in the form of a notarial deed to a local law firm to create a bank account on behalf of the company if the Management Board members are foreign nationals who do not reside in Poland.

How To Run A Company In Poland?

Investors may think about employing individuals in Poland when the firm has successfully completed the business registration procedure and is able to conduct economic operations.

While looking for qualified individuals, business owners have a number of alternatives. They may either post a job opening on a specific website or enlist the assistance of a recruitment firm.

People must have a work permit in order to work in Poland, and employers are responsible for ensuring that their business pays employees the required minimum salary and respects their rights to paid time off, holidays, and other benefits.

Starting a business in Poland also offers a variety of benefits with regard to taxation. This is a result of the nation’s comparatively low corporate income tax as compared to the one that applies in other EU nations.

The tax professionals at our law office in Poland have highlighted some of the most important tax facts below.

Companies in Poland are subject to a default corporate income tax rate of 19%, although those that meet the requirements can pay income other than capital gains at a lower, 9% rate.

There are few exceptions to this rule, but generally speaking, they are startups and small businesses with annual revenues of less than EUR 1.2 million.

Dividends, interest, and royalties payments in Poland are subject to withholding tax for both businesses and individuals. Generally speaking, resident corporations pay 0% or 19% tax on business transactions.

If a double taxation agreement is in effect or the parent-subsidiary regulation of the EU applies, the regular 19% rate may be waived for dividends paid by a Polish resident firm to a nonresident business or individual.

The usual amount of the value-added tax in Poland is 23%, while some products and services are subject to lower rates of 0%, 5%, and 8%. Exports are one type that can be zero-rated.

Unless the firm operates in an activity that is exempt from value-added tax, businesses are required to register for VAT when their annual turnover reaches 200,000 PLN.

If non-resident businesses make taxable supply of goods or services, they must also be registered for VAT purposes.

In Poland, VAT returns are submitted electronically and are paid in the month that follows the one during which the VAT requirement was in effect.

In terms of other tax compliance, a self-assessment scheme is applied to taxpayers and they make income tax advance payments throughout the year.

It is possible to use a streamlined technique of tax assessment, which is based on the tax outcomes documented for prior years.

The National Bank of Poland may impose penalties and penalty interest on businesses that don’t comply with tax laws. In this instance, 8% is the lowest penalty rate.

What Are The Company Tax Obligations In Poland?

How To Set Up A Company In Poland
Image from EPICENTER network.

In Poland, corporate income tax, value-added tax, stamp tax, real estate tax, and excise duty are the primary taxes that apply to companies.

The taxes paid by foreign corporations are the same as those paid by domestic corporations, however, when a double tax treaty is in effect, a foreign firm may get specific tax benefits as specified in the treaty.

The Polish taxation of foreign legal companies is subject to the EU Parent-Subsidiary Directive.

Due to Poland’s comparatively low corporate income tax, compared to the one that applies in other EU nations, starting a business there also has a variety of tax benefits.

The tax professionals at our law office in Poland have highlighted some of the most important taxation information below.

Companies in Poland are subject to a default corporate income tax rate of 19%, although those that meet the requirements can pay income other than capital gains at a lower, 9% rate.

Small companies and newly established companies with annual revenues of less than EUR 1.2 million may be exempt from this rule.

Dividends, interest, and royalties payments in Poland are subject to withholding tax for both companies and individuals. Generally speaking, resident corporations pay 0% or 19% tax on business transactions.

If a double taxation agreement is in effect or the parent-subsidiary regulation of the EU applies, the regular 19% rate may be waived for dividends paid by a Polish resident firm to a nonresident business or individual.

Polish value-added tax has a normal value of 23%, however some goods and services are subject to lower rates of 0%, 5%, and 8%. Certain classes, like exports, are eligible for zero rating.

When an organization’s yearly revenue surpasses 200,000 PLN, it is required to register for VAT, unless it engaged in a non-VATable activity.

If non-resident enterprises make taxable deliveries of goods or services, they are also often required to register for VAT reasons.

In Poland, VAT returns are filed and paid in the month that follows the one for which the VAT requirement was in effect. They are filed online.

In terms of other tax compliance, taxpayers are subject to a self-assessment regime and make income tax advance payments throughout the year.

It is possible to use a streamlined technique of tax assessment, which is based on the tax outcomes documented for prior years.

companies that disregard the tax regulations are liable to fines and penalty interest as established by the National Bank of Poland, with the lowest fine rate in this case being 8%.

Knowing the country’s tax laws is crucial for operating a business there, and tax specialists and financial planners in Poland can provide you with further information as required.

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