Register a Company in Poland

Are you a foreign entrepreneur who wants to start a new company in Europe or expand your existing business into new markets? Are you looking for the best jurisdiction to register your company abroad? Opening a company in Poland can be one of the most promising solutions for the development of your business.

The Republic of Poland is the fifth largest country in the European Union. Polish authorities provide favourable conditions for entrepreneurs who choose this country to register their company.

Let’s take a look at the most obvious advantages of Poland for business.

5 reasons to do business in Poland?

1. Government support of business.
   Since a substantial part of the Polish budget revenue comes from corporate taxes of small and medium-sized enterprises, the government actively supports entrepreneurs and investors.
   In recent years, the Republic of Poland has significantly simplified the procedures for registering a new company and transferring an existing business. The government provides tax incentives and business development grants to new companies.
2. Favourable geographical position.
   Foreign businessmen often choose Poland as a place to register their company, because this country is extremely well located on the map of Europe, becoming an indispensable link between East and West. The Republic has access to the Baltic Sea and borders 7 countries, including Germany, the Czech Republic, Slovakia, Lithuania, Ukraine, Belarus and Russia.
3. A thriving economy.
   Poland’s economy was established in 1990. Poland now has the sixth largest economy and the fifth largest consumer market in the EU.
   The high solvency of the Polish domestic market is ensured by the steadily growing GDP and low unemployment rate (according to the International Labour Organisation – 5%). Additional advantages of this country are a well-developed banking sector and a large market of financial services.
4. Entering the European market.
   As the Republic of Poland is a full member of the European Union and part of the European Economic Area, Polish companies have the opportunity to supply their goods and services on favourable terms to other jurisdictions of the above mentioned associations.
   Another advantage is Poland’s well-developed transport infrastructure, including seaports, highways and the third-longest railway network in the EU.
5. Human resource opportunities.
   Those entrepreneurs who plan to open an existing office directly in the country of incorporation will appreciate qualified employees from among Polish residents.
   The human resources potential of Poland is at least 15 million Poles of working age. The high level of professional training of Polish specialists is ensured by more than 450 modern universities.

Types of Polish companies

In Poland, several types of corporate and unincorporated comercial organisations are available to foreign entrepreneurs for business registration. Imperial & Legal has prepared a brief overview of the most popular types of Polish companies.

Limited Liability Company (Spółka z ograniczoną odpowiedzialnością / spółka zoo)

One of the most popular types among foreign investors in Poland. Such corporate structure is easy to register. The liability of business owners is limited to their share in the authorised capital.

To register Spółka zoo it is enough to have one shareholder and one director, which can be a private person or a company, including those of foreign origin. Entrepreneurs can manage their company on their own or appoint a hired manager as a director. Also, an office with a Polish address is required.

Before registering a limited liability company, the founders must pay all or part of the charter capital into an account opened for this purpose in a Polish bank. The minimum amount of the charter capital that must be paid before an application for registration of a Spółka z ograniczoną odpowiedzialnością can be submitted is currently 5,000 Polish zloty (approximately $1300, autumn 2024).

If your limited liability company has more than 25 shareholders and the founding capital exceeds PLN 500,000 (about $130,000), in addition to a director, a supervisory board with oversight functions is required.

Spółka zoo in Poland can only issue registered shares. Such a business structure cannot attract investments by placing its shares on the stock market.

Joint Stock Company (Spółka akcyjna – SA)

The liability of shareholders for the debts of such a business entity is limited to the value of their shares and does not extend to the other assets owned by them.

Polish joint stock companies can be public and private. Public SAs can place their shares on the stock market and thus attract additional investments.

The establishment of a joint stock company requires at least one founder and one director, as well as an office in Poland, which can serve as the company’s official address.

Polish corporate laws do not impose restrictions on the country of origin or tax residency of the founders of Spółka akcyjna. They can be individuals or other companies.

The minimum amount of the authorised capital of an SA is PLN 100,000 (approximately $26,000). At least 25% of this amount must be paid by the entrepreneur before an application for registration of a joint stock company can be submitted.

In a joint-stock company, decisions are made by the director, the supervisory board and the general meeting of shareholders. If several directors are appointed in an SA, they all together form a management board. At least 1 director in a Polish joint stock company must be an individual.

Registration, administration and reporting of Spółka akcyjna is much more complicated and expensive than that of ordinary limited liability companies, therefore joint-stock companies are used to register large commercial enterprises or businesses related to the financial services market.

Simple Joint Stock Company (Prosta spółka akcyjna / PSA)

It is a simplified form of a Polish joint stock company. PSA is much easier to register, easier to administer and, if necessary, easier to dissolve. This makes this legal form more suitable for novice investors and entrepreneurs.

The key differences between a simple joint stock company and an ordinary joint stock company are:

1. The minimum amount of authorised capital required to register a company is only 1 zloty.
2. More flexible governance. In a simple joint-stock company, a board of directors can be established that combines the functions of a management and supervisory board.
3. Simpler decision-making process within the company. Simpler procedures allow owners of such businesses to make decisions remotely, via email and modern means of communication.
4. Flexibility in matters related to the company’s operating principles and the issue of shares. For example, in PSA, the employer can reward employees with shares in his company.
5. It is possible to keep the register of shareholders electronically.

One founder is sufficient to open a PSA. The owner of such a company can be a person or another commercial organisation, including those of foreign origin. The only exception to this rule: a simple joint stock company in Poland cannot be wholly owned by a limited liability company with only one owner.

Company in a special economic zone (SEZ Company)

In order to stimulate the development of certain regions, the Polish government has created 14 special economic zones, with favourable conditions for investors in industrial and technological companies.

Each special economic zone has independent self-governing bodies with broad powers. Therefore, favourable conditions for business include not only zero rates on certain taxes associated with serious production, but also partial or full exemption from corporate tax.

In order to register a company in a Polish SEZ, you must obtain authorisation from the local governing council. The local authorities are more willing to meet the needs of a foreign investor if his plans include opening a large manufacturing company with the authorised capital of at least €100,000 and more than 250 employees.

Partnership

Partnerships are a special form of doing business. On the one hand, they are not legal entities like corporations. On the other hand, a partnership in Poland has legal independence, i.e. it can conduct transactions and incur financial obligations in its own name.

There are several types of Polish partnerships that are suitable for foreign entrepreneurs to register a business in Poland.

Full partnership

A full or general partnership is a commercial organisation formed by at least two partners, which can be individuals or other companies and organisations.

In a general partnership, all members are allowed to manage and take part in the decision-making process. They have the right to represent the entire partnership: to make financial commitments, to enter into commercial agreements, etc.

Each founder is fully liable for all debts incurred.

There is no minimum amount of authorised capital in a Polish general partnership. All partners contribute to the general assets of the partnership in cash or property. If all partners’ contributions are made in cash, the company can be registered remotely on the state portal S24.

The principle of pass-through taxation applies to general partnerships in Poland. In this case, the partnership does not pay corporate tax on the profits received, neither before nor after their distribution among the founders. The partners of the partnership, in turn, must declare the income received and pay taxes on their own.

Professional partnership

A professional partnership can be formed by two or more people for joint professional activities. An important condition is that the partners in such a firm must have a free-lance profession. It applies to such qualifications that involve private practice on the basis of service agreements or contracts. Such professions usually include lawyers, doctors, managers, marketers, engineers, architects, designers and others.

The founders of a professional partnership, just as in a general partnership, contribute to the common assets of the organisation before it is formally registered.

Professional partnerships in Poland are subject to the same taxation principle as general partnerships. However, Polish participants in a professional partnership can choose how to pay tax on the profits received – on a general basis, as an individual (depending on the amount of income, the income tax rate will range from 12 to 32%) or at a favourable rate of 19%.

The liability of the partners for the debts of such a firm, just as in a general partnership, will be full and joint. However, the founders of a professional partnership are not liable for financial obligations:

• arising for individual partners as a result of their professional activities;
• arising from the provision of services by employees and members of the partnership under the direction of one of the partners.

Another difference from a general partnership is the possibility of appointing a management board of participants and/or hired managers. In this case, the other founders lose the ability to manage the professional partnership.

Limited partnership

A limited partnership must consist of two or more founders. The status of the founders, and therefore their liability for the financial obligations of the firm, may differ.

1. Full partner. Has the right to participate in the management of the firm. In case of failure and bankruptcy of the partnership is liable for debts with all its assets.
2. Limited partner. Typically does not participate in the management of the firm. If the business goes bust, a limited partner risks losing only their contribution to the total assets of the partnership.

Private individuals as well as other companies and organisations can be participants in a limited partnership in Poland. There are no restrictions on the nationality and tax affiliation of the partners.

The profits of limited partnerships in the Republic of Poland are subject to corporate tax. It is possible to apply favourable rates for start-up Polish entrepreneurs and those partnerships whose income, including VAT, in the last accounting year did not exceed €1,200,000.

Equity partnership

Unlike all previous types of partnerships, this commercial organisation requires a share capital of at least PLN 50,000.

Such a business structure must already have management bodies regulated by Polish law – a general meeting of shareholders as well as a supervisory board (for partnerships with more than 25 shareholders).

All participants in a Polish equity partnership are divided into:

1. Full partners — founders who have the authority to represent and participate in the management of the organisation. This type of partners are fully and jointly liable for all debts of the company.
2. Shareholders — partners who, in the event of bankruptcy of the company, risk only their share in the share capital. Shareholders cannot represent the partnership and are not allowed to participate in its management.

Both organisations and individuals can be full partners and shareholders in an equity partnership.

As in the case of a limited partnership, the income of such a firm will be subject to corporate tax at the standard rate applicable in Poland, unless the partnership can claim a favourable income tax treatment.

How to open a company in Poland

The Polish state has done everything possible to simplify the process of opening a new company and avoid extensive paperwork. Nevertheless, experienced legal advisors will help you avoid mistakes and register a Polish company quickly and without unforeseen expenses.

Let’s see as an example the process of registration of spółka zoo – a Polish limited liability company:

1. The first step is to decide on the name of your future company. What structure will it have? Who will be its founders? At what address in Poland will the company be registered? Imperial & Legal lawyers will help you choose the legal form of company that best suits your needs. Our specialists will check and reserve the name of the company; if necessary, clarify the management structure and help you find a legal address for incorporation.
2. Collect the documents required for registration (a sample list can be found in the section below). All documents not in Polish will need a notarised translation. Imperial & Legal can also help with this.
3. Another integral part of the preparation for incorporation is the general meeting of shareholders, at which a decision on the appointment of a director or the board of directors is taken. One of the advantages of Poland for foreign entrepreneurs is that a director doesn’t have to be a Polish citizen or even permanent resident.
4. Once you are done with all of the preparations, our lawyers will contact a notary in Poland and organise a meeting to sign the constitutional documents. The founders must sign the constitutional documents and the memorandum of association in the presence of a Polish notary. A foreign businessmen can also send their authorised representative.
5. Next, the authorised capital of the company must be paid in. As a rule, the founders’ contributions to the company’s share capital are made in cash, and the funds collected in this way are accumulated in a special account in one of the Polish financial institutions. It is important that after the capital has been paid in, the bank provides the relevant document to the Provincial Court Register (KRS).
6. Finally, once the company has been incorporated in the presence of a notary and its minimum charter capital has been paid, our staff will apply for the official incorporation of the company together with the accompanying documents to the KRS.
7. Once your application has been approved, you will need to:

• • get your tax registration;
  • submit information on all beneficiaries of your company to the state register;
  • obtain state licences (if the company’s activities are regulated by the state);
  • open an account in a Polish bank.

Recently, foreign businessmen  usually use the online registration procedure via the state portal S24. If you need to open a small limited liability company in Poland with a simple structure and standard constitutional documents, the modern way will be faster and cheaper. You can find out more about remote registration of a Polish company in this article and at a consultation with Imperial & Legal specialists.

What taxes do companies pay in Poland?

Corporate income tax

All corporate structures registered in the country, including limited partnerships, equity partnerships, and general partnerships (if there are legal entities among the founders of the latter and the partnerships themselves do not disclose information about their partners) pay corporate tax on all their profits, regardless of where they originate. An exception to this rule will be profits derived in a country that has double tax treaties with Poland.

Currently, the Polish corporate income tax is 19%. A reduced corporate tax rate of 9% applies to all income of corporate structures and certain partnerships, except for capital gains, if:

1. The firm is classified as a small taxpayer, i.e. a commercial organisation whose taxable revenue (including accrued VAT) in the reporting period was less than €2 million.
2. The company has just started to operate in the market – i.e. in the first tax year.

If profits are received in Poland by a non-resident company, income such as dividends, royalties and interest will be subject to corporate tax at the rate of 20%.

Minimum corporate income tax

Starting from 2024, a new tax obligation applies in Poland, which concerns those companies that in the reporting period declared tax losses or insignificant net profit (not exceeding 2% of revenue).

The minimum income tax in this case is only 10%. The amount subject to this tax is derived from the following sources:

• 1.5 per cent of the Polish company’s operating profit (excluding capital gains);
• “excess” receivables servicing expenses paid to related companies (when such expenses amount to at least 30% of the company’s profit before tax);
• expenses for services or royalties paid to persons related to the company exceeding the amount of PLN 3,000,000 plus 5% of the company’s profit before tax.

There is also a simpler way of calculating the base for the minimum corporate tax. You can take as the tax base 3% of all income of the company in the reporting period, except for capital gains.

Value added tax

VAT is charged on the sale of goods and services within Poland and on export and import transactions both within and outside the European Economic Area.

The current Polish VAT rate is a substantial 23%. A number of goods and services are subject to reduced rates, up to full exemption:

Reduced VAT rates in Poland

To learn more about what other taxes Polish entrepreneurs pay and to choose the most effective tax optimisation tools, contact our consultants!

Company registration in Poland with Imperial & Legal

Licensed company

Imperial & Legal is regulated by the Office of the Immigration Services Commissioner (OISC) UK to the highest, third class licence. This licence is a guarantee of the quality and transparency of our work. Our representatives in Poland are licensed lawyers with many years of experience.

Individual approach and comprehensive services

We will select the right type of company and provide full legal support throughout the registration process. We will develop a customised solution and take care of communication with state authorities.