Setting up a company in Poland

Poland in recent years is recognized as an attractive EU country for setting up companies.

Modern Poland is one of the few countries in Europe with a steady increase in economic indicators and improved social standards. But the state attracts emigrants-Ukrainians for other reasons: because of similar culture and mentality, as well as Polish language is much easier for Ukrainians than most other European countries.

For the non EU start-ups and new companies, the registration of a company in Poland is one of simplest ways to enter the EU market. In addition, opening a company in Poland is much cheaper than in the most popular jurisdictions: Germany, the United Kingdom, the United States.

If your business in Poland is developing and the company shows economic success, you can apply for a residence permit, and later - to obtain a permanent residence permit and even citizenship.

Since you are the owner of a Polish company, you automatically become an equal participant in European lending. Simplified procedures for obtaining loans at European rates will be quite accessible to you. In addition, you will have the opportunity to receive subsidies from the European Union for your company and new projects.

There are several, different forms of companies in Poland, from which you can choose the most suitable one for your commercial activities. Below is detailed information about the types of companies for registration in Poland.

TYPES OF COMPANIES

In there are several corporate forms of company registration:

• Private Limited Company (Sp Z.o.o );
• Joint Stock Company (S.A);
• Partnership;
• Sole Proprietor.

PRIVATE LIABILITY COMPANY ( Sp Z.o.o )

Polish "Sp Z.o.o." is the most popular legal entity among small and medium-sized firms. The minimum registered capital for this type of entity is 5,000 PLN which must be paid at the time of registration.

Sp Z.o.o. has a flexible structure and is relatively easy to register. The company must have at least one director and there are no restrictions for foreign shareholders. Annual accounts must be prepared and sent to the office of the company.

Shareholders' personal liability is limited to the assets they have contributed to the company and does not extend to their personal assets. This allows shareholders to protect their own assets in the event of failed investments or debts. They can lose only what they contributed to the company and what constitutes its assets.

Polish law does not impose any significant restrictions on the activities carried out by the LTD. In other words, any type of business activity that complies with Polish law may be carried out by a Private limited company, and there are no restrictions in this respect. When you as a shareholder work for the company and receive a salary, the company must pay an employer's National Insurance contributions and make tax deductions for you in the same way as for any other employee.

A Polish Private Limited Company is a type of business that has the status of a legal entity and can be registered by one or more individuals or legal entities. The share capital is divided into shares, which can be of equal or unequal value (the types of shares are described in the Articles of Association). The required amount must be paid in full before the registration of the new LTD in the National Court Registry. Shareholders may increase the capital of Sp. z.o.o. by making a special amendment to the Articles of Association.

KEY REQUIREMENTS FOR Sp Z.o.o. REGISTRATIONS:

• Only one director and one shareholder are required to open LTD;
• The status and residency of the shareholders and director do not matter;
• The minimum number of board members is just one and there are no requirements as to the maximum number of the board members;
• The capital, made up of the contributions submitted by the shareholders is 5,000 PLN and must be paid-up before the business is registered;
• The LTD must have a management board of at least one person;
• The Board of Directors may consist entirely of foreigners;
• Bank account obligatory;
• The company is registered only with a valid Polish address.

JOINT STOCK COMPANY (S.A)

The Polish Joint Stock Company (S.A.) - (Spółka Akcyjna) is a widely used form of business or investment by foreigners in Poland. EU citizens can establish and run a company without any restrictions. Non-EU citizens can also freely establish and manage Polish companies, but in some matters they face legal restrictions. For example, a Polish joint stock company (S.A.) with more than 50% of non-EU capital can buy real estate in Poland only after receiving permission from the Ministry of Foreign Affairs (or the Ministry of Agriculture in the case of agricultural real estate).

NIP and REGON numbers are assigned "automatically" when the company is registered in the National Court Register. Full accounting, publication of annual financial reports and auditing are required. In contrast to other types of companies in Poland, the shareholders of a simple joint stock company may choose between a one-tier board, consisting of executive and non-executive directors, and a two-tier board, consisting of a separate board and supervisory board.

KEY REQUIREMENTS FOR JOINT STOCK COMPANY (S.A):

• Minimum stock capital of Joint-stock Company is 50.000 PLN;
• Minimum one shareholder is required;
• Minimum one director is required;
• Minimum share capital amounts;
• Bank account is obligatory;
• The company is registered only with a valid Polish address.

The government's large-scale Polski Ład program, which involves changes in the tax system and many other aspects of society, is being implemented in Poland, which was introduced in 2022. Since 01.07.2022 the PIT rate in Poland has decreased from 17% to 12% for the first tax group (people with income up to 120 thousand PLN per year). Obviously, this will entail an increase in the income of individuals, including foreign citizens who are officially employed in Poland.

Poland has a system of tax incentives, especially for innovative companies and startups: 

• Start-up incentives - for entrepreneurs and partners of simple businesses, who are starting their business;

• The IP Box preference is a preferential taxation of IP income a rate of 5%;
• New product launch incentives entitled to deduct 30% of the costs from the tax base;
• Tax incentives for workplace - an additional deduction of 50% of eligible investment costs from the tax base, after filing income tax return at the end of the fiscal year;

• From 2022, it is also possible to deduct up to an additional 200% (as opposed to the previous additional 100%) of expenses incurred for wages and social security contributions of employees and civil contractors (i.e., cooperating under civil law contracts, except for so-called B2B contracts) involved in R&D activities.

REPORTS AND AUDITS

Full accounting, publication of annual financial reports and auditing are required for Private Limited Company and Joint Stock Company. Under Article 49 of the Polish Accounting Act, the director of a Polish company is required to prepare an annual report.

COMPANY’S BANK ACCOUNT

To open a corporate bank account in Poland we will need:

• Original and copies of foreign passports (notarized in case of remote opening) of the founders;
• Company registration documents (Articles of Incorporation, extract from the KRS Court Register)
• PESEL identification number (read here what it is, why this number is a must for the founders of the company in Poland, and how to get it);
• Notarized power of attorney (in case of remote opening);
• Completed and signed bank application forms and signature cards (for remote opening for legal entities).

Qualified experts of Key2Law can help to open a bank account in the shortest time.

WHAT IS A COMPANY REGISTRATION FEE IN POLAND?

Company registration in Poland takes from 2 weeks. You can find out the price of registration and other nuances of starting a business in this jurisdiction by signing a form on our website.

WHAT ISSUES MAY ARISE DURING THE REGISTRATION PROCESS?

Setting up a company in Poland is not an easy process, especially for those who are engaged in such a procedure for the first time. There are many legal subtleties that will have to be considered. Problems may arise at the very first stage - choosing a name. Checking its uniqueness is the responsibility of the business owner. Complications sometimes arise at the stage of paperwork as well. You need to consider many nuances known only to qualified professionals.

Any business begins with the registration of a company. However, problems often arise with the registration of a company abroad. That is why in the final case you need the assistance of a professional advisors. Key2Law is ready to offer you the following assistance in the setting up of a company in Poland and other countries.

We have extensive experience in the procedure of setting up a company, opening bank accounts in any country and in the other ambitious regulatory questions. Our qualified experts will provide professional assistance in setting up a company and explain the advantages and disadvantages of distinct types of activities in Poland. Similarly, we can help with the purchase and sale of existing companies in this jurisdiction.

To find out more information, you can use the opportunity to order a consultation on the regulation of activities in Poland from our specialists. You can contact us using the feedback form or the contacts listed on the website.