Setting up a company in Poland as a foreigner can be an exciting and rewarding venture. However, it is crucial to navigate the legal requirements and understand the potential challenges before diving into business activities. As a foreign entrepreneur or investor, you need to be well-informed about the process of company formation, share capital, incorporation, and partnerships.

 

 

So, if you’re considering starting a business in Poland as a foreigner, buckle up as we delve into the intricacies of setting up a company and uncover valuable insights for your entrepreneurial journey.

Taxes in Poland if you set up LLC Company (Sp. z o.o)

Corporation Tax

Taxation Form	Tax Rate	Eligibility Criteria
Corporate Income Tax (CIT)	9% or 19%	– 9% Rate: Applicable for small taxpayers. If the taxpayer’s gross sales revenue does not exceed €2,000,000, or this limit is not surpassed in the current tax year, a 9% rate is applicable for active business activities. 19% Rate: Applied once the €2,000,000 limit is exceeded. Gross turnover includes VAT on goods and services. The reduced 9% rate is applicable only to revenues (income) other than capital gains, and certain restrictions apply to entities formed as a result of specific restructuring activities.

VAT Taxation

VAT Rates	Percentage Rate	Application Area
Standard (23%)	23%	– General VAT rate applied to most goods and services.
Reduced (8%)	8%	– Applicable to, among other things, construction covered by a social housing program, services related to culture, sports, and recreation.
Reduced (5%)	5%	– Covers, for instance, basic food products (e.g., bread, dairy), baby products, books, and e-books.
Preferential (0%)	0%	– Preferential rate applied, for example, to intra-Community supplies of goods and exports of goods.

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Eligibility and Requirements for Foreigners Setting Up a Company in Poland

To set up a company in Poland as a foreigner, there are certain eligibility criteria and requirements that need to be met. Let’s take a closer look at what these are:

Eligibility Criteria for Foreigners

Foreign entrepreneurs who wish to establish a company in Poland must fulfill specific criteria related to residency, nationality, or legal status. The following points outline the key eligibility requirements:

Residence Permit: Foreigners must have a valid residence permit or temporary residence permit in Poland. This permit allows them to legally reside and work in the country. 🇵🇱📜

Citizenship: While Polish citizenship is not mandatory, foreigners can still establish a company if they meet the necessary residency requirements. 🌍🤝

EU National Bonus: EU nationals enjoy a special advantage as they may register a Sp. z o.o. (limited liability company) in Poland, simplifying the process for those from European Union member states. 🇪🇺💼

Moreover, the process of company formation offers flexibility:

Additionally, you can open a bank account for your company with a choice of top banks in Poland. 🏦💳

Necessary Documents and Permits

When registering a company in Poland, it is essential to provide the required documents and permits during the application process. These may include:

1. 1. Identification Documents: Foreign entrepreneurs will need their valid passport or national identification card to verify their identity (KYC/AML documents)
   2. Proof of Residence: Proof of residence is typically required, which can be demonstrated through utility bills or rental agreements.
   3. Business Plan: A well-prepared business plan outlining the nature of the business, market analysis, financial projections, and marketing strategies is crucial when setting up a company.
   4. Permits and Licenses: Depending on the industry or sector of operation, additional permits or licenses may be necessary before commencing business activities.

Advantages and disadvantages of LLC Company in Poland

Advantages of Sp. z o.o. company

1. 1. Separate Legal Personality: The LLC has a separate legal personality, allowing it to incur obligations, acquire rights, sue, and be sued independently of its shareholders. 🌐🏢

   2. Limited Liability for Shareholders: Shareholders’ liability is limited to the contributions specified in the company agreement. They are not personally responsible for the company’s debts. 💼💰

   3. Flexibility in Number of Shareholders: An LLC can be established by one or more individuals, providing flexibility in the number of shareholders, and even allowing for a single-member LLC. 👥

   4. Commercial Activity as a Single-Member: The LLC structure allows for commercial activities as a single-member entity, providing a suitable option for entrepreneurs or small business owners. 🌱👨‍💼

   5. Legal Capacity for Business Transactions: The LLC has legal capacity for business transactions and can participate in civil law transactions independently. 📜🤝

   6. Protection of Shareholders’ Investments: Shareholders’ investments are protected, and they are not held personally liable for the company’s financial obligations. 🛡️💸

   7. Ability to Operate as a Single-Member Company: A Spółka z o.o. can function as a single-member company, providing flexibility for entrepreneurs who prefer sole ownership. 👤

   8. Freedom to Hire Any Number of Employees: The company has the freedom to employ any number of workers, allowing for scalability and adaptation to business needs. 💼👥

   9. Immediate Commencement of Business Activities: The company can commence its activities immediately upon signing the company agreement. It operates officially as a Spółka z o.o. in organization until its registration in the National Court Register (KRS), a process that can take up to six months from the date of signing the agreement. 📅🏢

   10. Relatively Low Initial Capital: The relatively low required initial capital of the Spółka z o.o. is an advantage. Currently set at 5000 zł, it does not have to be presented in the form of cash or existing funds in a bank account. The capital is determined in the company agreement and can be adjusted at any time, as long as it doesn’t fall below the statutory threshold. 💰📉

   11. Flexible Capital Adjustment: The capital can be easily increased or decreased as needed, as long as it remains above the statutory minimum. 🔄

   12. Streamlined Online Company Formation: The process of establishing a Spółka z o.o. is streamlined, with the possibility of online registration. This allows partners to avoid visits to various offices. NIP (Tax Identification Number) and REGON are automatically assigned, and the registration application can be submitted and paid for through the online system, often within minutes. 🌐💻

   13. Efficient Registration Procedure: The registration procedure for the company is efficient, especially with the popular online registration method, reducing the time and effort required for partners. 🚀⏱️

Disadvantages of Sp. z o.o. company

1. 1. Lengthy Liquidation Procedure: The process of liquidating a Spółka z o.o. involves gathering extensive documentation and appointing liquidators, making it a time-consuming procedure.

   2. 🏢💼 Notarial Deed Costs: Drafting the company agreement as a notarial deed incurs additional costs for partners, requiring visits to notary offices and gathering various documents, which can be challenging and time-consuming for a large number of partners.

   3. 💰📊 Double Taxation: Spółka z o.o. may face double taxation, with corporate income tax (CIT) paid by the entity and additional income tax (PIT) incurred when distributing profits to individual partners. The tax rates are either 9% or 19%.

   4. 📚💻 Full Accounting Obligation: Spółka z o.o. is obligated to maintain a full accounting system, leading to complexity and formalization in recording economic and financial events. This often results in additional costs for external accounting services or hiring an in-house accountant.

   5. ⚖️💸 Annual Financial Reporting: The requirement for annual financial reporting is a burden for Spółka z o.o. companies, irrespective of their revenue. Failure to submit reports may result in financial liability, with partners facing fines.

   6. 👥🏦 Management Board Liability: Although rare, the liability of management board members for the company’s obligations can be a significant drawback. If the company cannot be held responsible, creditors may seek repayment from board members, potentially involving their entire assets and even their spouse’s assets.

   7. Setting up a company in Poland as a foreigner comes with numerous benefits and opportunities. From a favorable business environment to tax incentives, there are several reasons why Poland is an attractive destination for foreign investors. Let’s explore some of the key advantages and opportunities available when establishing a company in Poland.

Tax Incentives, Grants, and Subsidies

One of the major advantages of starting a company in Poland is the availability of tax incentives, grants, and subsidies. The Polish government offers various programs aimed at supporting foreign-owned companies. For example, businesses operating within special economic zones can benefit from reduced corporate income tax rates or even be exempt from paying it altogether for specified periods. 🌐🇵🇱

There are grants and subsidies available for specific sectors such as technology, research and development (R&D), innovation, energy efficiency, and more. These financial incentives provide valuable support to companies looking to establish themselves in Poland. 💼💰

Moreover, if you set up a Polish company, you can apply for the SME FUND 2023 grant, which offers additional financial assistance and opportunities for growth. 🚀💡

Additionally, the EU provides a system that protects your trademark in all member states through EU trademark registration managed by the EUIPO. Instead of registering in each country separately, you can register once with the EUIPO and have exclusive rights in all EU countries. This not only streamlines the process but also provides a strong legal foundation for your brand. 🛡️🌍

And here’s an exciting opportunity: with the SME FUND 2023 grant, you can imagine significant savings on EU trademark registration costs. Instead of the standard 850€, you pay only 212€! To seize this opportunity, fill in the form and discover the secret. Remember, it’s first come, first served! 🌟🔐

Access to EU Markets

As a member of the European Union (EU), establishing a company in Poland provides access to the vast EU market. This membership allows businesses based in Poland to trade freely within the EU’s single market without facing trade barriers or tariffs. It opens up doors to 27 other countries with over 450 million potential customers.

Being part of the EU also means that companies established in Poland can benefit from various EU programs designed to support business growth such as Horizon Europe (the EU’s research and innovation program) or COSME (the EU program for small and medium-sized enterprises).

Sectors with Growth Potential

Poland offers opportunities for businesses across various sectors. Some industries, in particular, have shown significant growth potential in recent years. The technology sector, for example, has been thriving with a growing number of startups and tech companies emerging in cities like Warsaw, Krakow, and Wroclaw.

Manufacturing is another sector that holds promise in Poland. The country has a strong industrial base and is known for its skilled workforce and competitive production costs. The services industry, including finance, IT outsourcing, shared services centers, and e-commerce, continues to flourish.

Networking and Collaboration Opportunities

Establishing a company in Poland also provides ample networking and collaboration opportunities within the local business community. Poland has a vibrant entrepreneurial ecosystem with numerous industry events, conferences, and networking platforms where entrepreneurs can connect with like-minded individuals.

Moreover, there are various chambers of commerce and business associations that facilitate networking among businesses both domestically and internationally. These platforms offer valuable resources for establishing partnerships or finding new clients or suppliers.

Procedures and Costs of Registering a Company in Poland

Step-by-step Explanation of the Company Registration Process for Foreigners in Poland

Registering a company in Poland as a foreigner may seem like a daunting task, but with the right information, it can be a smooth process. Here is a step-by-step breakdown of the procedures involved:

1. 1. Choose your company structure: The first step is to decide on the type of company you want to register. In Poland, common options include limited liability companies (Spółka z ograniczoną odpowiedzialnością or Sp. z o.o.) and joint-stock companies (Spółka akcyjna or S.A.). Each has its own requirements and implications.
   2. Prepare necessary documentation: To register your company, you will need certain documents, such as articles of association, which outline the purpose and structure of your business. You will also need identification documents for all shareholders and directors involved.
   3. Open a bank account: Before registering your company, you must open a bank account in Poland. This is where you will deposit the required share capital for your chosen company structure.
   4. Notarize documents: Some documents may need to be notarized by a Polish notary public. This includes the articles of association and any other legal agreements related to your business.
   5. Submit registration application: Once all necessary documentation is prepared, you can submit your registration application to the relevant registry court in Poland. The court will review your application and verify that all requirements are met.
   6. Receive KRS number: If your registration application is approved, you will receive a KRS number from the registry court. This unique identification number confirms that your company is officially registered.
   7. Register for tax purposes: After receiving your KRS number, you must register for tax purposes with the appropriate tax office in Poland.

Overview of Required Documentation

When registering a company in Poland, you will need to provide specific documentation. Here is an overview of the required documents:

• • Articles of association: These documents outline the purpose and structure of your company.
  • Identification documents: You will need identification documents for all shareholders and directors involved in the company.
  • Bank confirmation: A confirmation from the bank stating that you have deposited the required share capital in your business bank account.

It’s important to ensure that all documentation is accurate and complete to avoid any delays or complications during the registration process.

Government Fees and Additional Costs

Registering a company in Poland incurs certain government fees. The exact amount depends on various factors, such as the type of company being registered and its share capital. It is advisable to check with the registry court or seek professional advice to determine the specific fees applicable to your situation.

In addition to government fees, there may be additional costs associated with registering a company in Poland. These can include legal assistance fees, translation services for non-Polish documents, notary fees for document authentication, and any other professional services required during the registration process. It’s essential to consider these potential costs when budgeting for your company registration.

Estimated Timeframe for Company Registration

The time it takes to complete the registration process can vary depending on several factors, including the workload of the registry court and whether all documentation is correctly prepared. On average, it can take between two weeks to three months from submitting your application until you receive your KRS number. It’s important to plan accordingly and allow sufficient time for any potential delays or additional requirements that may arise during this period.

Registering a company in Poland as a foreigner involves several procedures and considerations. By understanding each step involved, preparing necessary documentation accurately, accounting for government fees and additional costs, and allowing ample time for completion, you can navigate through this process smoothly. Seeking professional guidance from lawyers or business consultants experienced in company registration can also provide valuable assistance and ensure compliance with all legal requirements.

Setting Up a Limited Liability Company in Poland: Requirements and Eligibility

In Poland, establishing a Limited Liability Company (LLC) can offer numerous benefits for foreigners looking to start their own business. Let’s delve into the requirements and eligibility criteria associated with setting up an LLC in Poland.

Benefits of Establishing an LLC in Poland

Creating an LLC in Poland provides several advantages that make it an attractive option for foreigners. Some of the key benefits include:

1. 1. Limited Liability: As the name suggests, an LLC offers limited liability protection to its shareholders. This means that their personal assets are safeguarded in case the company faces financial difficulties or legal issues.
   2. Flexible Management Structure: An LLC allows for flexibility in terms of management structure. It requires at least one shareholder and one director to form the company, allowing individuals to have full control over their business operations.
   3. Tax Exemptions: LLCs are eligible for certain tax exemptions and incentives provided by the Polish government. These exemptions can help reduce the overall tax burden on businesses, making it more financially viable.
   4. Separate Legal Entity: An LLC is considered a separate legal entity from its owners, which means that it can enter into contracts, own property, and engage in various business activities on its own behalf.

Minimum Capital Requirements

When establishing an LLC as a foreigner in Poland, there are minimum capital requirements that need to be met. The current minimum share capital required is 5,000 PLN (Polish Zloty), which is approximately $1,300 USD.

Foreigners must ensure they have sufficient funds available to meet this requirement before proceeding with the registration process. It’s important to note that this capital should be deposited into a dedicated bank account during the registration process.

Shareholders and Directors

To form an LLC in Poland, at least one shareholder and one director are required. The shareholder(s) can be individuals or legal entities, and they are the owners of the company. The director(s), on the other hand, are responsible for managing the day-to-day operations of the business.

It’s worth mentioning that shareholders and directors can be the same individuals, allowing for a streamlined decision-making process. There are no restrictions on foreign nationals serving as shareholders or directors in a Polish LLC.

Poland Limited Liability Company (Sp. z o.o.) – characteristic

In conclusion, establishing a limited liability company in Poland as a foreigner offers numerous benefits and opportunities. The eligibility requirements are relatively straightforward, and the procedures for registering a company are well-defined. By setting up a company in Poland, you can take advantage of its favorable business environment, strategic location within Europe, and growing economy.

Now is the time to explore the possibilities that Poland has to offer for foreigners looking to start their own business. With its supportive infrastructure, skilled workforce, and competitive costs, Poland provides an ideal platform for entrepreneurial success. Whether you’re interested in manufacturing, IT services, or any other industry, Poland welcomes you with open arms.

What is your choice? Poland or maybe Estonia with 0% Corporation Tax?

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Eesti Consulting will help you estabilish a company in Estonia with e-Residency Card or by Power of Attorney.