Poland is an interesting and prospective jurisdiction for launching and operating European-oriented businesses. The county can be characterized by its adherence to major strict European legal and compliance practices but openness to foreign investors at the same time. The process of starting and operating a business is generally easy, predictable, and is not associated with high transactional costs for entering the country. The jurisdiction is also associated with the following advantages it opens both to local and foreign entrepreneurs.
Advantages of the Jurisdiction
If you are preliminarily interested in starting your operation in this country, the following business options and opportunities can start to be available from the moment of local company formation.
- advantages from the strategic geographical location in the European region
- benefits associated with the membership in EU, OECD, and WTO
- flexibility of the business registration process with an opportunity to found a company in Poland remotely
- many available opportunities for entering European markets
- well-developed local economic sectors (chemical, consumer goods, textile, food, trade sectors, etc.) suitable for doing business
- qualified and experienced local employees
- comparatively low costs for keeping a business
These are only general benefits attributed to this jurisdiction. In fact, it opens lots of other opportunities for starting and running a business profitably in many other sectors. Contact Prifinance lawyers to find more on the aspect of benefits for Poland company formation options in the sectors of your operation or interest. This intent may be realized in one of the subsequent forms of doing business locally.
Major Forms of Legal and Business Presence
Any foreign businessman who wishes to realize a business goal of company formation in Poland is free to choose among the following variations of legal and organizational forms, depending on the concrete business goals set by such a businessman:
- Limited Liability Company (LLC) – a Polish legal person that is considered to be one of the most popular among local citizens and foreign entrepreneurs due to its flexibility and ease of formation. It doesn’t take too long to incorporate this business and it does not require high costs to establish and maintain it. The highest cost associated with this type of legal person is forming its chartered capital of approximately EUR 1,000 (or PLN 5,000 in local currency). Each share should have its nominal value – PLN 50 at minimum. This legal person may be incorporated even by one person only. Each such participant of a Polish LLC іs not liable under any conditions for the debts and obligations of this legal person in excess of the amount invested in equity purchase. But, specific restrictions on share transfers are stipulated in chartered documents and applied practically.
- Joint-Stock Company – this Polish variation of doing business is designated to involve external financing and offer shares to the general public. Consequently, starting and handling this form of Polish company requires compliance with more severe requirements but promises higher rewards. It is required for its founders to create chartered capital in the amount of around EUR 21,000 (PLN 100,000 in local currency). Each share should have its nominal value – PLN 0.01 at minimum.
- General Partnership – a variation for handling business simpler than registration of a company in Poland. It envisages that at least two persons join their effort and resources to conduct certain types of business while they jointly and severally bear financial liabilities for the results of such an operation. A partnership agreement is required in this case to formalize the duties and rights of business partners involved in it.
- Limited Partnership – a variation for doing business that is also a good alternative to an option of opening a company in Poland. It requires having (1) one general partner at minimum whose financial liabilities should cover all potential losses that the joint doing business results in, and (2) one limited partner at minimum whose financial liabilities don’t exceed the amounts of monetary funds or other assets invested in this partnership. A partnership agreement is also required in this case to fix all obligations and rights that business partners possess with regard to each other.
- Branch – this is a form of doing business for a non-resident legal person with certain restrictions – for conducting the types of business activities it is entitled to carry out in its country of registration only. Registration and entering information about the branch of a foreign company in the Polish business register is required.
Registration Requirements and Steps
Company registration in Poland usually requires passing these must-have steps:
- Clarifying commercial objectives an entrepreneur intends to realize through a Polish legal person or in any other form (should be defined taking into account the scope and value of anticipated operations).
- Elaborating on suggestions of business names for a future legal person and verifying those using rules applied for company names in Poland. Reservation of the final chosen option of a business name.
- Searching for and arranging an official address for a future Polish legal person.
- Requesting and gathering personal (for natural persons) and registration (for legal persons) details of founders. Collecting information about beneficiaries and managers of a future Polish legal person.
- Elaborating on and negotiating statutory documents for a future Polish legal person. Filling in all required registration forms.
- Forming a statutory capital for a future Polish legal person.
- Arranging and submitting the set of required registration documents to a registrar. Providing additional information (optional). Entering information about registration to the Polish business register.
- Getting a registration certificate in the case of a positive decision.
- Arranging registration for the purposes of paying taxes and hiring employees.
- Searching for banks that are ready to open accounts for a newly registered company (compliance requirements vary depending on the banking institution).
- Applying for and getting licenses and authorizations that may be obligatory for starting operation in certain sectors (like banking and financial).
This is an approximate scheme of a company formation in Poland. If you want to get a concrete plan for registering a Polish company, ask Prifinance lawyers to elaborate on it for you.
Legal and Regulatory Framework
Generally, the local legal regulation is very favorable for doing business and attracting investments in the country. There are no restrictions or limitations applied in this regard except for some strategic sectors, like TV broadcasting or aviation. The local regulation is also associated with the necessity to comply with a number of compliance requirements adapted to common European standards, first of all in the area of money-laundering prevention and terrorism financing.
The Commercial Companies Code, the Act on Trading in Financial Instruments, the Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, and the Act on Investment Funds are legal acts of primary importance for non-resident investors who wish to start activities in this country. The Polish Ministry of Justice (administers the Polish National Court Register) and the Polish Financial Supervision Authority are local state authorities foreign investors will be likely dealing with while entering and operating in the country.
Tax System in Poland
If a non-resident entrepreneur intends to open a company in Poland, this business decision should be evaluated along with the following parameters of the local tax system:
- Corporate income tax rate (CIT rate) – 19%.
- Personal income tax rate – (1) standard - 32%, (2) extra 4% of the solidarity tax for income over PLN 1 million.
- Value-added tax rate – 23%.
- Withholding tax rates (applied to foreigner taxpayers) – (i) dividends – 19% (ii) interest – 20% (iii) royalties – 20%.
- Capital gains tax rates – (i) corporate – don't differ from the generally-applied CIT rate (ii) individual rate that is applied to transactions of shares transfers –19 %.
These are basic highlights that are necessary to keep in mind while considering the option of registering a Polish company. Prifinance lawyers are ready to consult you more precisely on different aspects of paying taxes in Poland and carry out approximate calculations of taxes due.
How Prifinance Specialists May Help You
Prifinance lawyers will be glad to assess more precisely the option of setting up a company in Poland taking into account concrete aspects of your business case. Lawyers will be glad to offer you extra alternatives that may suit you even more to grow your business. Precisely, lawyers are ready to provide you legal support regarding these aspects:
- defining target information that has to be collected and submitted for consideration to local Polish authorities;
- drafting and formalizing all required documents;
- handling negotiations with local partners, state authorities, and banks;
- supporting the further operation of a newly registered legal person.
We offer prompt company registration and bank account opening services in Poland and worldwide. New registration and ready-made options. Provide extensive details for more precise consultations and suggestions that can be effective for your future project.