In course of our activity we deal with company registration in Poland on a daily basis. Throughout 13 years of our experience in this field we dealt with numerous enquiries and clients. In this article, basing on our practical knowledge we tried to cover all the important practical aspects of company formation in Poland in 2023. If you are willing to register company in Poland in 2023 this article is for you.
Why should you do business in Poland?
- EconomyPolish market is the sixth-largest in Eruopean Union by nominal GDP. It’s still growing with 5,7% PKB in 2021
- LocationPoland’s central location in Europe makes it an ideal place for business in terms of logistics. It’s a “window” for Eastern European markets.
- Labor forceNot only Poland is the fifth-most populated member state of the EU, it also has a very friendly immigration procedure for highly qualified specialists. It makes Polish labor market very resourceful and flexible.
- TaxesYes, you read that right, in recent years Poland has become kind of a tax haven within the EU. Not only you can take advantage of R&D and IP BOX tax reliefs, but most importantly you can pay as little as 9% of CIT, or not pay CIT at all using our famous “Estonian CIT”.
Access to IT specialists from entire world
Poland is not only the fifth-most populous EU member, but it also boasts a very welcoming immigration process for highly trained professionals. The government initiative “Poland. Business Harbour” is one of the most interesting facilities in this area. Its key benefit is that it offers “quick track” visa processing for IT professionals from entire world. The program’s unique visa type permits the specialists to work in Poland on a B2B basis.
0% income tax
Yep, you read it correctly; Poland has evolved into a sort of tax haven within the EU in recent years. Not only may you benefit from R&D and IP BOX tax breaks, but you can also use our renowned “Estonian CIT” to pay as little as 9% in CIT or no CIT at all.
IP Box
A tax relief for companies dealing with intellectual property. The income tax rate on the income related to IP decreases to 5%.
R&D tax relief
A tax relief for companies operating in research and development sector (construction, production, IT etc.). It’s idea is about allowing the taxpayer to deduct R&D costs from the tax basis multiple times. From 2022 it can be used jontly with IP BOX!
“Estonian” corporate income tax in Poland
For many enterprises, “Estonian CIT” is a game-changing tax strategy. Simply put, until you distribute a dividend, you do not pay corporate income tax on the company’s profit. Also, even if you split the profit, you will still receive an advantageous combined corporate and personal income tax rate of 20% (for small taxpayers) or 25% (for other businesses).
Types of companies in Poland
Polish legal system names two types of companies:
Partnerships
- Registered Partnership [sp.j.],
- Professional Partnership [sp.p.],
- Limited Partnership [sp.k.],
- Limited Joint-Stock Partnership [s.k.a.]
Capital companies
- Limited Liability Company [sp. z o.o.], (private limited liability company)
- Joint-Stock Company [s.a.],
- Simple Joint-Stock Company [p.s.a.]
Foreign entrepreneurs can also decide to register a representative office or a branch of their foreign parent company in Poland. However, in most cases company registration will be the most favourable solution.
Company registration Poland. Business forms for 2023
Without a doubt, since the Polish Deal’s implementation (major change in Polish tax law), there isn’t a single corporate structure that would be profitable for all businesses. Such options were formerly provided by limited partnerships and polish limited liability companies. In 2023 I suggest the following company registration clues:
- for “start-ups,” we will advise an LLC or a simple joint-stock company;
- We will advise a limited partnership for lucrative service businesses (requiring little capital);
- We would advise an LLC for enterprises where a sizable portion of the income is reinvested, preferably in conjunction with Estonian CIT.
Subsidiary vs. branch
For nine on ten clients I recommend company registration over a branch in Poland. Why so? Here are the main reasons:
- easy and fast incorporation with possibility of fiduciary set-up accelerating the registration process significantly;
- no issues with tax registrations – the company becomes a tax payer in PL by virtue of registration in Poland;
- no limitations as per the choice of the scope of activity;
- full discretion in choosing the name of the company;
- possibility of selling the shares in the company (as part of the international business).
What about representative office?
One objective drives the representative office. Promoting the parent firm is the goal. In Poland, it is not a straightforward method of conducting business. Nonetheless, it might be beneficial for businesses that operate globally. Particularly for those that must advertise their brand in Poland. Nonetheless, company registration would be a more favourable solution in most cases.
Starting a business in Poland as a foreigner
The incorporation of a Polish limited liability company requires at least one shareholder. It could be either a natural person or a business entity (a corporate shareholder – foreign parent company). As per the reauirements of the shareholder’s country of citizenship – there are no legal limitations. The company’s liabilities are not the shareholder’s responsibility after the company registration.
Representation of the company
Management board
Every limited liability company has to have a management board. It consists of one or more board members. The management board takes care of company’s operations and represents the company in relations with third parties. As a rule the members of management board are liable for company’s obligations. There are no legal restrictions as per the nationality of the board members. Without a properly appointed board member company registration will not be possible.
Commercial proxy
A commercial proxy is a person who acts on behalf of the company. It represents an entrepreneur on the basis of a commercial power of attorney. Appointing a commercial proxy is not obligatory for company formation purposes.
Such commercial representation includes the authorization to perform judicial and extrajudicial actions related to business. A commercial proxy acts directly on behalf of the entrepreneur. His actions are similar to the actions of a partner or management board. They have a direct effect on the represented entrepreneur. The difference between a proxy and a board member is that, as a rule, commercial proxy is not liable for company’s obligations. There are no legal restrictions as per the nationality of the commercial proxy. You may apoint a commercial proxy in course of company registration.
Single-shareholder company registration
The only limitation is that the shareholder has to be either a natural person or a company with at least two shareholders. A Polish single-shareholder LLC can’t be formed by another single shareholder company.
Documents and information
Step 1. Before company incorporation you have to decide on a business form.
The majority of foreign investors (over 90%) choose Polish Limited Liability Company (Sp. z o.o.) for company registration. However, specific aspects of your project may necessitate different decisions. This type of business activity has numerous advantages. Among them are limited liability for the company’s debts (unlike partnerships) and low minimum share capital (5.000 PLN). There is also a tax incentive: low corporate income tax (9% for start-ups and 19% for companies with a turnover of more than EUR 2.000.000). The Polish limited company also requires only one shareholder (e.g. parent company).
Step 2. Before company incorporation you need to provide your law firm with key information about your Polish company such as: company name, share capital, representation, etc.
Step 3. You have to gather and provide your law firm with required documents for company incorporation
I. If shareholders are individuals
- copy of ID of the shareholders
- duly legalized power of attorney (if you want to open company without visiting Poland)
II. If shareholders are legal entities (e.g. foreign company, foundation)
- an official extract from your local register of companies proving that the company is operational and providing information on who is the legal representative of the company
- parent company’s statute/memorandum of incorporation
- ID/passport of the persons which will become board members in the Polish company
- ID/passport of the persons representing the parent company
Procedure and timing
We will need to gather all of the necessary documentation in order to submit a complete application for company registration in Poland. The organization’s Limited Liability Company will become a regular LLC after registration. It is also given legal personality. In Poland, company formation takes 3-8 weeks. This begins with the completion of the articles of incorporation and ends with the entry into the register.
Stages of registration process
A standardised step-by-step description of the company registration procedure is provided below. Please treat the example as a simplified scheme designed to give you an idea of the stages of company incorporation from the client’s perspective.
Stage 1 – Sign the agreement (or articles of association) of a limited liability company
The shareholders or their legal representatives sign the company’s statute. This must be done in front of a Polish notary public because the agreement must take the form of a notarial deed for it to be legally binding.
Stage 2 – Deposit the share capital of Polish company
The amount of money required to cover the company’s share capital (the minimum share capital is 5000 PLN) must be deposited into the company’s bank account or paid in cash. All in-kind contributions mentioned in the articles of incorporation must be transferred to the company after the incorporation.
Stage 3 – Appoint a management board
To be operational and even to be registered, the company must have legal representatives. The management board is the body authorised to represent a Polish Limited Liability Company. It must have at least one member.
Stage 4 – File a motion for registration of the company to the Polish register of companies (KRS)
A motion using a particular form should be filed to the commercial court relevant to the place in which the company is headquartered.
Stage 5 – Meet regulatory requirements for your type of business
The business acitivity you decided to perform in Poland may need some specific licenses or permits. To check whether you are compliant with Polish regulations contact your law firm. This is dealt with after successful company formation.
Basic facts about company formation
| Minimum share capital for joint stock company | 100 000 PLN |
| Minimum share capital for limited liability company | 5000 PLN |
| Time frame for company formation | 4-6 weeks (online company registration 3-7 days) |
| Company name verification | Not required, recommended |
| Available company registration methods? | Traditional at the notary, or online via designated portal |
| Minimum number of shareholders for LLC | 1 |
| Can foreign citizen be a shareholder of the Polish company? | Yes, there are no limitations as per the nationality of the shareholder |
| Can the director be a foreigner | Yes, there are no limitations as per the nationality of the director |
| Is registered address service permitted? | Yes, however it slows down the procedure of VAT registration |
| Is local director required? | No |
| Corporate tax rates (CIT) | 0% – „Estonian” CIT company not distributing profit to the shareolders 9% – companies with income up to 2 mln EUR 19% – others |
| Dividend tax rate | 19% |
| Standard VAT rate | 23% |
| Tax incentives | IP Box, “Estonian” CIT, R&D tax relief (multiplication of tax decuctibles), Special Economic Zones |
| Stamp duty upon company registration | 0,5% on initial capital |
| Company registration numbers | KRS, NIP, REGON VAT, EU-VAT, EORI, BDO |
| Register of companies online | https://ekrs.ms.gov.pl/web/wyszukiwarka-krs/strona-glowna/ |
| Corporate bank account opening | Personal visit of the director required, on special occasions remote set up also available |
| Electronic signature | Obligatory for each Director of Polish company for the purpose of filing annual financial statements |
| Is accounting obligatory? | Yes |
Company registration fees
If you signed the company agreement in the traditional manner, the court fee for company registration is 500 PLN. The fee for announcing the entry in the Court and Economic Monitor in such a case is 100 PLN. Fees are lower for agreements that use the S24 system. They are 250 PLN and 100 PLN for announcing the entry in the Court and Economic Monitor, respectively. If you act through a power of attorney, you must also pay an administrative fee of 17 PLN in both cases. The payment can be made online at https://oplaty.ms.gov.pl/ using the e-Payment system.
Steps after company incorporation process
Upon company registration it receives a tax identification number [Polish: NIP] and a statistical number [Polish: REGON]. A new company must show an actual beneficiary in the Central Register of Beneficiaries within 7 days of company registration. Within 21 days of the date of entry into the National Court Register, you must submit the information on the dedicated NIP-8 form. It is also important to remember to register the company as a VAT Taxpayer.
In connection with company registration, the company must pay 0.5% of the tax base for tax on civil law transactions tax. It is determined by the value of contributions made to a partnership or the value of a limited company’s share capital. The document must be submitted within 14 days of the date the company’s agreement is signed.
Taxation
Corporate tax rates in Poland
According to Article 19 of the CIT Act, the tax rates of companies in Poland are subject to corporate income tax at a rate of:
- 9%Applies to “small taxpayers”
- 19%Applies to other taxpayers
9 % corporate tax rate in Poland – who is a small taxpayer?
CIT taxpayers may qualify for preferential tax rates for companies in Poland if certain conditions are met. The reduced 9% tax rate does not apply to all taxpayers due to the many factors that influence its implementation. According to the CIT Act, those with small taxpayer status may be eligible for a preferential tax rate. It may also apply to new taxpayers who are eligible for tax relief. Of course, this is their first fiscal year of operation.
A small taxpayer is defined as an entity whose value of sales revenue did not exceed 2 million EUR. It counts for the previous fiscal year. The amount is converted based on the average rate announced by the National Bank of Poland as of the first business day of October of the previous year, rounded to 1.000,00 PLN. In the case of small taxpayers, the CIT model assumes a 9% rate to revenues excluding capital gains.
Meet our expert
Jakub Chajdas
Contact an expert
info@cgolegal.com
+48 22 873 79 90
For over 12 years of his work at CGO Group Jakub has been supporting foreign investors in setting up and developing their business in Poland. He provides an allround legal and tax suport for corporations with foreign capital.
Till date Jakub has been trusted by Clients from countries such as e.g. USA, UK, Canada, Italy, UAE, Israel as well as Belarus, Ucraine and Baltic States. In his legal practice Jakub supports entrepreneurs with main focus on IT, HR, production and real estate sectors.
Jakub endorses efficient and comfortable business cooperation. If you are interested in tax and legal matters related to setting up and developing a business in Poland he is the person you should contact with. Jakub provides support both in English and Italian.
FAQ
Which type of company in Poland should I open?
In 2023, our recommendations for the clients will still depend on their developed or assumed business models. There is no doubt that since the implementation of the Polish Deal there is no one business form that would be profitable for all entrepreneurs. Previously, a limited liability company and a limited partnership constituted such solutions. Still, we can assume in broad terms that:
– for “start-ups” we will recommend an LLC or a simple joint-stock company;
– for profitable service activities (with a low level of investment) we will recommend a limited partnership;
– for businesses in which a significant part of the income is reinvested, we would recommend an LLC, preferably together with Estonian CIT
What is NIP number?
This is a Polish tax identification number. If your company is registered to VAT it is your VAT no. at the same time.
What are the types of companies in Poland?
Polish legal system names two types of companies:
I. Partnerships
– Registered Partnership [sp.j.],
– Professional Partnership [sp.p.],
– Limited Partnership [sp.k.],
– Limited Joint-Stock Partnership [s.k.a.]
II. Capital companies
– Limited Liability Company [sp. z o.o.],
– Joint-Stock Company [s.a.],
– Simple Joint-Stock Company [p.s.a.]
Foreign entrepreneurs can also decide to register a representative office or a branch of their foreign company in Poland.
Is there a possibility of registering a limited liability company in Poland with only one shareholder?
Yes. The only limitation here is that this shareholder has to be either a natural person or a company with at least two shareholders. A Polish single-shareholder LLC can’t be formed by another single shareholder company.
Do I have to make a name reservation before registering a company in Poland?
No, there is no legal requirement of a company’s name reservation. It is however recommended, to verify whether the company with the same name has not yet been registered, or if the name does not infringe rights of third parties
Who represents the Polish company?
Every limited liability company has to have a management board. It consists of one or more board members. The management board runs the takes care of company’s operations and represents the company in relations with third parties. As a rule the members of management board are liable for company’s obligations. There are no legal restrictions as per the nationality of the board members.
Can a foreigner open a company in Poland?
Yes, however there is limitation as per the form of the business activity of the foreigner in Poland. A foreigner as a rule can’t:
– register a sole proprietorship,
– be a partner in a partnership
Do I have to transfer the initial share capital to the company's bank account before the registration of the company?
No, the initial share capital can also be stored in cash. In such situation the company’s management board should present the funds in case of a tax audit
What is the minimum share capital of a limited liability company in Poland?
Currently, the minimum initial share capital for a polish LLC is PLN 5000
Can a foreigner be a director (member of the management board) of a polish limited liability company?
Yes, there are no limitations whatsoever as per the nationality of the director (member of the management board) of a polish limited liability company.
Can a foreigner be a shareholder of a polish limited liability company?
Yes, there are no limitations whatsoever as per the nationality of the shareholder of a polish limited liability company.
Is it necessary to get a work permit in order to open a company in Poland?
In most cases the answer is no. This matter is regulated expressis verbis by Polish law, in particular the act on promotion of employment and labour market institutions, art. 88 section 1 point 2) which states that: “A work permit is required if a foreigner: in connection with holding a position in the management board of a legal entity registered in the register of entrepreneurs or being a joint-stock company in organization or in connection with handling the affairs of a limited partnership or limited joint-stock partnership as a general partner, or in connection with granting him a general power of attorney (general proxy) stays on the territory of the Republic of Poland for a period exceeding a total of 6 months within the next 12 months.” What that means in practice is that unless the board member / general proxy stays in Poland for a period not excceeding 6 months within a period of 12 months, there is no requirement for work permit for him. On the other hand the sole fact of being a shareholder of a limited liability company does not have any implications as per the immigration law.
Can I open a bank account for my company remotely?
In some cases it may be possible. However, as a general rule, the director of Polish company should appear in person before the bank officials in order to open a bank account.
How much time does it take to register a company in Poland?
For the online company registration it will take around 72 hours, as per the regular procedure through notary it will take 1-4 weeks.
Can I open a company in Poland without coming to Poland?
Yes, in order to do so you will need to grant a power of attorney to your Polish attorney. He/she will deal with formalities for you.
Should I register a company in Poland or a branch of my foreign company in Poland?
For nine on ten clients I recommend a subsidiary over a branch in Poland. Why so? Here are the main reasons:
– easy and fast incorporation with possibility of fiduciary set-up accelerating the registration process significantly;
– no issues with tax registrations – the company becomes a tax payer in PL by virtue of registration in Poland;
– no limitations as per the choice of the scope of activity;
– full discretion in choosing the name of the company;
– possibility of selling the shares in the company (as part of the international business).
Is it necessary to set up a company in Poland if I want to employ workers from Poland?
No, there are at least four different ways of employing workers in Poland. Of course the most obvious one is to register a Polish company. However, you can also register a branch in Poland or register a foreign company as an employer in Poland. Ultimately, you can sign an agreement with the employee in which you oblige him to cover the taxes resulting from the agreement on his own.
