Common Mistakes Made by Foreign Investors When Starting a Business in Poland

Poland, as a member of the European Union with an attractive economy, is becoming an increasingly popular destination for foreign investments. However, despite the favorable environment, many foreigners encounter difficulties when establishing and running a business in the country. Let’s explore the most common mistakes made by foreign investors and provide practical tips to avoid delays and unnecessary costs.

1. Lack of Knowledge of Legislation and Polish Market Specifics
   One of the most frequent mistakes is underestimating the complexity of Polish law. It’s essential to thoroughly understand all aspects related to business registration, taxation, labor law, and the specifics of dealing with Polish institutions. Ignorance of local rules and regulations can lead to significant fines and delays.
   Tip: Consult a qualified Polish lawyer and accountant. They will help you navigate legal intricacies, ensure proper document preparation, and advise on legally optimizing your tax burden. Don’t rely on unverified sources of information.
2. Incorrect Choice of Legal Structure
   Choosing the right legal structure (e.g., LLC, joint-stock company) directly impacts taxation, liability, and administrative workload. A wrong choice can result in inefficient business management and unnecessary financial costs.
   Tip: Carefully analyze the pros and cons of each structure based on your business scale, number of partners, and investment size. Study the tax implications of each company form, including tax rates, social contributions, and reporting requirements. A lawyer’s consultation will help determine the best legal structure for your situation.
3. Incorrect Selection of PKD Codes
   Mistakenly chosen PKD codes (Polish Classification of Economic Activities) can create serious problems for your company. This may lead to:

• Denial of necessary tax numbers or additional tax assessments.
• Requirements for additional licenses or permits.
• The need to amend the company’s articles of association, incurring time and financial costs.
• Limited access to subsidies, grants, and loan programs.
• Inability to conduct activities due to missing qualifications or permits.
  Tip: Thoroughly review the PKD classification and ensure the selected codes match your activities. Verify whether the code requires licenses or permits. Consult an accountant or lawyer.

4. Inadequate Business Plan Preparation
   Without a well-developed business plan that includes a detailed market analysis, financial forecasts, and a growth strategy, the chances of success diminish significantly. Poor preparation can lead to underestimating risks and inefficient resource use.
   Tip: Create a detailed and realistic business plan, including competitor analysis, marketing strategy, sales plan, and financial projections for several years ahead. This will help attract investments and ensure business success.
5. Incorrect Document Preparation. Errors in Company Articles
   Any inaccuracy or incompleteness in documents during business registration can lead to delays or refusals. Documentation requirements can be strict, so impeccable preparation is crucial. Pay special attention to the company’s articles of association—clearly define share distribution, rules for partner withdrawal, and profit-sharing regulations.
   Tip: Double-check all documents for compliance with legal requirements. Ensure the articles meet National Court Register standards. Use a professional translator for Polish translations. Don’t skimp on specialists—it will save time and stress.
6. Improper Opening of a Bank Account
   In Poland, a corporate bank account is essential for business operations. Using a personal account for business purposes can cause issues with tax authorities and banks. Additionally, poorly prepared registration documents often lead to account opening refusals. Banks may request extra details, conduct checks, or even deny service.
   Tip: Choose a bank based on your business needs, considering fees and online banking convenience. Prepare all required documents in advance. Ensure the company owner has a PESEL number, often required for bank identification. Issue a power of attorney if a representative opens the account.
7. Underestimating the Language Barrier
   Not knowing Polish can significantly hinder communication with government agencies, partners, and clients, leading to misunderstandings, delays, and financial losses.
   Tip: Hire Polish-speaking staff or use translators. Learning Polish is a long-term investment that will greatly ease doing business in Poland.
8. Poor Budget Planning
   All potential expenses—registration fees, taxes, rent, salaries, marketing, and unforeseen costs—must be carefully calculated. Underestimating costs can lead to financial difficulties or even bankruptcy.
   Tip: Prepare a detailed expense estimate and set aside a reserve fund for unexpected situations. Regularly monitor your business’s financial health and adjust the budget as needed.

By following these tips, foreign investors can significantly reduce the risk of mistakes and ensure successful business establishment and growth in Poland. However, remember that consulting professionals—lawyers, accountants, and business advisors—is a key factor in achieving success.

If you have any questions, write to us at: office@progressholding.pl.