The first step to become entrepreneur is always the same – making up your mind and registering the company. The seemingly simple process might become quite complicated in case of insufficient preparation, which leads to an obvious solution – familiarizing yourself with the Polish Corporate Law.
General situation
Polish market is very open to foreign investors and may be a very attractive option for these interested in broadening their sphere of business activity. There is a lot of potential opportunities yet to be discovered and foreign companies have shown a lot of interest in it. Poland is one of the largest members of EU, yet despite that both labour costs and corporate income tax remain at the rate very attractive to the investors. As another incentive serve various boons and grants for prospective entrepreneurs.
Who can start a company in Poland?
The Polish law in this aspect is quite flexible – being of legal age or having a legal representative is the only requirement in most cases, at least for the Polish citizens. Foreigners from European Union, The European Economic Area, USA or the Swiss Confederation can also do it on the same rules, while individuals outside this specification interested in company formation may need a residence permit to do so. It should be noted that in some cases temporary residence permit might be required.This restriction does not apply to:
- Limited partnership
- Limited joint-stock partnership
- Limited liability company
- Simple joint-stock company
- Joint-stock company
They are also allowed to establish representative office of a foreign parent company unless international treaties signed with Poland state otherwise.
Is company registration even necessary?
In case of being interested in becoming the founder of Polish company but being unable to amass initial capital for business activity of larger scale, there is one option available – sole trader. Such entities are called sole proprietor company and are required to be registered in Central Register and Information on Economic Activity (CEIDG) – those interested in becoming part of civil law partnership. For the soon-to-be business entity, it is possible to conduct non-registered activity legally upon fulfilling following conditions:
- Not classified as entrepreneur for different reasons (i.e. civil law partnership),
- Not partaking in activities requiring licenses or permits,
- Not having conducted a business activity in last 60 months,
- Being classified as a natural person,
- Revenue not exceeding 50% of minimum wage in any month of a year,
Before company registration in Poland
The most important issue are the foundations of the structure our business forms. To help with that a few questions may be of great use. What sort of company are you interested in starting? Are you prepared for equal and unlimited liability? Maybe a professional partnership or sole proprietor company will suit your needs, rather than a more complicated options. And finally, are you aware of all documentation required by National Court Register (KRS) for registration? All answers to these questions are available at Gov.pl.
Name – more complicated than it seems
A seemingly simple matter of choosing a name is a bit more than it looks at the first glance. Polish company formation does have certain rules to it and it is imperative that future entrepreneur familiarizes himself with regulations, which while not complicated do exist. As an example, a sole trader is required to include his name and surname in nominative form in this order and while a natural person is only allowed to have registered one sole proprietor company – he is allowed to perform various types of business activities under that entry.
Eligibility – capital issues
One of the most important concerns are Polish share capital requirements – different types of companies have certain requirements on starting share capital and require all of it to be digitized. Additionally, there are requirements concerning the shares value. Minimum share capital are as follows:
- Limited liability companies – 5000 PLN of share capital and 50 PLN of nominal share value
- Limited joint-stock partnerships – 50000 PLN of share capital
- Joint-stock companies – 100000 PLN of share capital and 0.01 PLN of nominal share value
- Simplified joint-stock companies – 1 PLN of share capital
It might be important to know that the Warsaw Stock Exchange (WSE) is one of authorities supervising capital markets and listed companies along with Financial Supervisory Authority (PFSA) and the National Depository of Securities (NDS). As such there is more to worry about than just our corporate bank account.
Tax choice
One of the most troubling issues is the choice of taxation form, which depending on the revenue might be more or less attractive to your company. Polish income tax exists in four forms:
- General rules – according to tax scale (17% and 32%, from 1st July 2022 12% and 32%)
- Flat rate tax (19%)
- Lump sum tax on registered revenues
- Tax card – available only for those who continue this form of payment from previous year
Business compliance
In Poland there are several compliances to follow while operating business. Having at least one annual shareholder’s meeting at the latest 6 months after end of financial year is one of them. Another is having regular board meetings and being registered in Registry Court (shareholders and directors) and National Court of Poland (company). More obvious is complying with Polish law, paying Polish income tax and having annual statements compliant with regulations.
Need help?
It is important to remember that there is always an option of seeking aid of legal services and various agencies, who would gladly offer their counsel for every entrepreneur looking for advice. With their help the process of establishing a company can become a much smoother experience. They can not only offer legal advice but also function as representatives in legal process letting the client avoid the bureaucratic confusion that stands in his way.