How to open a company in Poland? Start a business.

how to open company in poland

Any foreigner can open a company in Poland. As a result, more and more entrepreneurs from EU, Ukraine, Belarus,  the former CIS countries and other countries are starting a business in Poland as a foreigner. Below, we will discuss in detail how a foreigner can open a company in Poland.

To open a company in Poland, the primary requirements are a passport and initial capital. The amount of initial capital will depend on what scale of the company you develop,  until it begins to generate profit.

However, the most important decision when opening a company in Poland is choosing the business model, it influence what legal form of registration company in Poland you select. The correct choice of business model will influence the company’s activities and its legal status in the future.

Poland offers a wide range of legal forms for company registration. The most common forms of business used by foreigners in Poland are the establishment of a Limited Liability Company (LLC – Spółka z ograniczoną odpowiedzialnością) or operating as a one person company in Poland (Jednoosobowa Działalność Gospodarcza, JDG). Below, we will discuss the pros and cons of opening a business in Poland in these forms and compare the possibilities of a legal entity versus a sole proprietorship.

How to start a business in Poland? How to open a company in Poland?

The process of registering a company in Poland is fairly straightforward. However, you should approach this process carefully, as any mistakes may cost you money later on.

Starting a business in Poland as a foreigner requires thorough planning at every stage. In other words, you must carefully consider how you will generate income in Poland. Below, we describe how to open a company in Poland.

How to start business in Poland : a comparison of options

Your goal is to choose the correct form of business in Poland. Registering a company as a legal entity, such as an LLC, or registering as a one person company in Poland (JDG) means that the latter is not a legal entity.

Let’s compare the conditions using two main forms – an LLC (Spółka z ograniczoną odpowiedzialnością) and a one person company in Poland (Jednoosobowa Działalność Gospodarcza):

Category one person company (JDG) LLC (Limited Liability Company)
Who can open a company in Poland as a foreigner EU residents. In case of Ukrainians PESEL status UKR. For other citizens only — Pole’s Card, Permanent Residence, YES, any foreigner can start a company in Poland
Registration company in Poland – in remote mode YES. You can register yourself, but we recommend consultations or support YES. You can register yourself, but we recommend consultations. Since all sites are only in Polish, it is more difficult than for individual entrepreneurs. There are nuances
Registration company in Poland – timing 1 day 5 working days
Necessity of electronic signature ePUAP YES YES
Need for a PESEL registration number YES YES
Is a local director or employee needed? NO NO
Responsibility An individual entrepreneur is liable for obligations with all of his personal property. Material liability is limited to the capital and property of the company.
Income tax YES . You can choose 3 forms: 1. On a scale of 12% and 32% of income 2. linear 19% of income 3. single tax on revenue, depends on the sphere of activity, for example for IT 8.5% and 12% YES , no choice. If revenue is up to 2 million EURO, then CIT is 9%, if higher, then 19%. Tax is imposed on  profit
Preferential regimes YES YES , Estonian CIT – 0%, worth considering if your income is over a PLN million
VAT if the revenue is more than PLN 16,667 monthly or  PLN 200,000 annually. If you provide any type of consultation VAT is obligatory. if the revenue is more than PLN 16,667 monthly or  PLN 200,000 annually. If you provide any type of consultation VAT is obligatory.
Minimum authorized capital N/A YES Minimum – PLN 5000
Tax on authorized capital N/A 0,50%
Who can be a director? N/A Any citizen. Director we mean a member of the board.
What documents do you receive after registration? CEIDG Registration Extract Founding agreement, extract from the Court Register (KRS)
Mandatory registration, identification numbers NIP, REGON, CIDG KRS, NIP, REGON
Is it possible to hire employees? YES YES
Tax burden on wages YES, but there are benefits for the first time. For hired employees 52-58% calculated from the salary YES, 52-58% calculated from net salary
Do I need to pay ZUS contributions? YES, but there are benefits for the first time. NO – If there are 2 founders, YES If there is 1 founder
accounting services YES  ,  inexpensive YES, see Progress Holding price list
Reasons for obtaining a residence permit YES YES

 

NOTE: The choice between an LLC (Sp. z o.o.) or a one person company (JDG) will depend on the type and size of your business. If you are a foreigner starting small business in Poland, it is better to choose a JDG. For all other cases starting a business in Poland as a foreigner – an LLC is recommended.

Process of establishing a company in Poland as a foreigner – LLC (Sp. z o.o.)

Process of establishing a company in Poland as a foreigner – LLC (Sp. z o.o.)

  1. Obtaining a PESEL number and registration with ePUAP.

How to start a business in Poland for a foreigner start their own company in Poland? How do they register it? In order a foreigner to register a company in Poland, he/she needs to have an identification number which is PESEL (Powszechny Elektroniczny System Ewidencji Ludności). PESEL is a unique identification number used in Poland to identify citizens, including foreigners who have come to the country. It consists of 11 digits and includes information about the date of birth, gender, and a checksum. To obtain a PESEL, a foreigner must apply to the local authorities (Urząd Gminy) with documents confirming their identity and residency status in Poland.

ePUAP (Elektroniczna Platforma Usług Administracji Publicznej) in Poland is an electronic platform for providing government services online. It is also referred to as an electronic signature, used to sign documents. Through ePUAP, citizens, including foreigners who want to start business in Poland, can interact with government institutions, submit documents, receive information, and perform other administrative procedures online. To access ePUAP, one must register on the platform. This can be done through a special identification process using an electronic signature or a special PIN code, issued by institutions that provide administrative services.

  1. How to establish a company in Poland for foreigner – Main Process

For a more detailed explanation on how to start a business in Poland and register a company, you can visit our page: https://progressholding.pl/en/usluga/opening-a-limited-liability-company-in-poland/ .

Here is a step-by-step process of how to open a company in Poland for a foreigner:

  • Define the main business activity of the future company: select industry codes (PKD), company name, legal address, founders and their shares, management, and share capital.
  • Form the share capital (the minimum amount for an LLC is 5,000 PLN).
  • Register the company with the National Court Register (KRS) and obtain the TIN and REGON numbers.
  • Submit an application for tax registration and obtain the VAT status, and notify that you start a business NIP8.
  • Register employees with the state social insurance authority (ZUS).
  1. Timeframes for setting up a company in Poland

Question how to start business in Poland frequently refers to  long timing. Tis not true. Recently company formation process in Poland shortens. The time required to establish a company and register it with the National Court Register (KRS) in Poland can vary. The process involves submitting the necessary documents, reviewing the application, and receiving approval from the registering authority. Typically, registration takes 5 to 7 working days.

The process of tax registration and obtaining the NIP usually takes about 2 to 7 working days.

Important aspects to consider when set up a company in Poland

Company registration in Poland can be challenging due to legal nuances. The Commercial Companies Code (KSH) is the main law governing legal entities in Poland. This law outlines how companies must operate in Poland (excluding one person company). If your company’s articles of association contain provisions that contradict the KSH, they will be considered illegal in that regard. For example, if the shares are equally divided (50% for each founder), but one founder receives 75% of the dividend and the other 25%, this would violate the law. Additionally, if a director is not a board member, he / she cannot represent the company.

Company name in the process of company formation in Poland

It’s important to understand that the company name must be unique. This is crucial. Polish law places the responsibility on the managers of the company being registered to ensure that there are no other businesses with similar or identical names in the registry. To verify this, you need to visit the KRS online platform portal. To make sure company registration in Poland goes smooth.
Choosing the wrong company name carries the risk that the registrar may refuse registration.
You should also consider copyright laws, for example, a company with a similar name may have a registered trademark, in which case they can prohibit you from using that name.

Legal Address while start company in Poland

How to open a company in Poland with a legal address? All information about the company’s legal address is recorded in the KRS register. A mandatory condition of the company’s founding agreement is that the address must be in the town or city where the company’s main headquarters are located.
The legal address may differ from the actual address of the company.
In Poland, there are also two types of company registration addresses: “real office” and “virtual office.”
Having a “real office” is one of the indicators of actual business activity. It can make it easier for the company to obtain VAT payer status. However, there are also disadvantages. A “real office” will be more expensive, and someone will need to be physically present there regularly to avoid missing important correspondence or you outsource this service.
A “virtual office” is a service offered by many specialized companies, providing an address for registration and taking on the responsibility of receiving and processing correspondence.

NOTE! The tax administration and banks do not like companies with a “virtual office” address, and this may result in the refusal to open accounts or register for VAT. They even have black lists of “virtual office”. Therefore mind it when opening a company in Poland.

If the company changes its address within the specified location, there is no need to amend the articles of association. However, if the address changes to another town or city, changes to the founding agreement and register will be required. So you need to  make changes in KRS.

Founders and Shareholding

Please note that the official register does not specify the percentage of a founder’s shareholding. Only the number of shares is listed, and you must calculate the percentage participation yourself.
The main rights and responsibilities of a founder include paying the share capital, conducting shareholders’ meetings, appointing and dismissing the board, making decisions on dividend payments, and determining the board’s remuneration.

Pay attention to split of shares when setting up a company in Poland.

Examples of shareholders rights

  • What can a founder do with 51% of shares? – Appoint and dismiss the board members,  conduct dividend payouts.
  • What can a founder do with 25% of shares? – This is a blocking stake for changing the company’s business activity codes (PKD).
  • What can a founder do with 10% of shares? – Can call a shareholders’ meeting.

IMPORTANT! If the founders has not paid for the share capital, despite it being a limited liability company (LLC), they will be personally liable with their property until the capital contribution is paid.

Company Management upon company incorporation in Poland

When setting up a company in Poland, the management board of an LLC is carried all responsibilities and is the only body to sign for the company. Management board is represented by the president of the board (prezes zarządu) or by a collegial body – several board members may be elected. The board of the company should be understood similarly to the role of directors in other countries. The board is the only body authorized to manage the company. The number of board members is not limited by law but should meet the company’s needs and ensure effective management. The company may be represented either by a single member or by two board members’ signatures.

Submission Date of the First Annual Report for a new company in Poland

All companies in Poland are required to submit an annual financial report within 3 months after the end of the financial year. For most companies in Poland, the financial year coincides with the calendar year and ends on December 31. Therefore, the deadline for submitting the annual financial report to the tax authorities for the current year is March 31 of the following year, and to the National Court Register (KRS) by the end of June of the following year.
For newly established companies, the deadline for submitting the annual financial report depends on the date of their registration:

  • If the company was registered before June 30, the first year  of the annual financial statement is current year.
  • If the company was registered after June 30, the first year of the annual financial statement is next year.
Codes of industry classification systems (PKD) – How to choose codes for a new company in Poland

When starting a business in Poland, it is essential to select the correct industry codes (PKD). In Poland, PKD is the classification of economic activities. Each company incorporation Poland is assigned PKD codes upon registration, which are used to identify the nature of the company’s activities. PKD codes assist statistical offices, tax authorities, and other institutions in tracking economic activity within the country.

The PKD codes must be up-to-date and accurately reflect the primary activities of your business registration in Poland. If the nature of your business changes over time, you may need to modify your PKD codes. Any changes, such as adding or removing PKD codes, must be registered through the National Court Register (KRS).

When establishing a business in Poland and drafting the company’s articles of association, we recommend including not only the main activities you plan to engage in but also those that could be of interest for future business operations. There are no restrictions on the number of codes you can select in a new company in Poland.

Out of the entire range of activities, you will need to designate one primary PKD code that defines the main business activity of the company, along with up to ten additional key activities. These will be reflected in the KRS registry.

Starting a one person company business registration

Starting a one person company business registration

Here’s how to open a business in Poland and key points to consider when starting a one person company (JDG). Many foreign private entrepreneurs in Poland choose this legal form to conduct business.

Opening a one person company in Poland is also available to many foreigners residing in the country, though there are certain restrictions. The following are the requirements for foreign nationals how to register a business in Poland:

  • EU citizens.
  • Foreigners with permanent residence in Poland.
  • Foreigners holding EU resident cards.
  • Foreigners with a Polish Card (Karta Polaka).
  • Citizens with refugee status.
  • Students with temporary residence permits.
What else is required for foreigners to one person company in Poland?
  • A valid identity document.
  • A PESEL number.
  • A legal residential address.
The registration process for a one person company in Poland  for a foreigner involves the following steps:
  1. Choose the business form – one person company (JDG).
  2. Submit an application to CEIDG (Central Register and Information on Economic Activity). You can apply online through the electronic portal or offline in person.
  3. Provide the entrepreneur’s name, residential address, type of activity, and business start date in Poland.
  4. Choose the taxation method.
  5. Verify identity, either via electronic identification (ePUAP) or in person.
  6. Obtain a registration certificate (NIP), which is the taxpayer identification number (NIP) and REGON number.

Important!!! Afterward, ensure that the tax form is aligned with the tax office, as the CEIDG system does not always provide the correct tax details. Make sure that company registration in Poland is reflected in proper document.

What to do after registering a company in Poland

Once the company registration process in Poland is complete, several important steps must be taken.

VAT registration when you start a business in Poland:
  1. Submit the VAT-R form (the form is submitted through the ePUAP system using an electronic ID) within 7 days of reaching an annual turnover of 200,000 PLN or 16,667 PLN per month. VAT registration is required for all sole proprietors providing consulting services.
  2. Provide the company name, address, NIP number, REGON number, expected turnover, and the date when VAT taxation is expected to begin.
  3. Receive VAT registration confirmation—this is a notification from the tax office (US) confirming the assignment of a VAT (VAT UE) number.
What is NIP-8?

In the course of doing business in Poland, various certificates must be submitted to regulatory authorities. One of these is the NIP-8 declaration, which is a declaration of the company’s bank accounts and addresses. When start a company in Poland how submit a declaration:

  1. Log into the e-Deklaracje system or your personal account in e-Urzad Skarbowy using your ePUAP account.
  2. Select the “Pliki do pobrania” (Files for download) tab.
  3. Click on “NIP-8” under the “Deklaracje i wnioski” (Declarations and applications) section.
  4. Enter your NIP number.
  5. Fill out the declaration, sign it via ePUAP, and submit it to the tax office.

Opening a bank account after registering a business in Poland

When you start a business in Poland you have to  open a bank account. It’s important to know that recently, opening a bank account remotely for a newly established Polish company with foreign founders and directors has become difficult, and in most cases, is no longer possible. Now, new company in Poland representatives must appear in person at the bank to sign all the necessary documents. Additionally, banks have introduced stricter checks for new clients, with enhanced verification measures implemented to combat money laundering and terrorist financing. To open a company account in a Polish bank, the following documents are required for LLC:

  • Passport
  • Company registration excerpt (KRS) for a new company
  • Articles of Association (umowa spółki) and all changes if any
  • Information about the company’s planned activities, etc.

IMPORTANT: A mandatory requirement for opening a bank account is the inclusion of information about the company’s owners in the Central Register of Beneficial Owners (CRBR). When register a company in Poland ensure that shareholders are in CRBR.

Choosing an outsourcing accounting company

If you have decided to start a company in Poland, accounting will be a crucial factor in this process. This is necessary for all new companies in Poland, regardless of the form of organization you choose when opening a company in Poland—whether it be a limited liability company (LLC) or a one person company (SP).

Proper and accurate accounting for a Polish company is extremely important. You should take care of this right after registering your new company in Poland. It is advisable to entrust the accounting to professional specialists who have extensive experience in this field. If you decide to outsource your accounting to a new company, it is essential that the employees of this company have licenses from the Ministry of Finance of Poland to conduct this type of activity.

The process of registering a business in Poland and its subsequent management can be quite labor-intensive, but if the entrepreneur approaches the matter wisely, there should be no significant problems. If you want to open a business in Poland and also entrust the accounting of your company in Poland to specialists who have long been in the market for such services, thereby saving time and effort, you can contact our company, Progress Holding. Our company is ready to assist you at any stage when you start a company in Poland.

 

 

What advantages can a new company owned by the foreigner get from working with Progress Holding?

  • For successful collaboration with clients, our company assigns each client a personal account manager and accountant.
  • Progress Holding offers its clients a wide range of services, from the setting up a business and registration of a company to ongoing support for your business at all stages of operation.
  • With us, you will benefit from electronic document management, which significantly speeds up the process of working with foreign investors.
  • For effective cooperation, Progress Holding provides training for the client’s staff and offers organizational and legal documents and instructions.
  • Our company uses automated accounting, so all clients are provided with free software, including tools for submitting invoices to KSeF (the National Electronic Invoicing System) in Poland.

Selection of Contractors and Checking Their Reliability

When you set up a company in Poland reliable  suppliers and buyers in Poland are  crucial. After registering your company, the choice of contractors with whom you plan to do business is essential.

In Poland, you can verify the reliability of future contractors in the following ways:

  • Check the registration data in the KRS (National Court Register) or CEIDG (Central Registration and Information on Business), to ensure that the company is registered and operating legally.
  • Check the financial reports of potential partners, which are generally accessible.
  • You can also check the history of court cases in the court case registry.
  • Read and review feedback from other clients about the contractor.
  • Browse social media for comments on the company’s work.

NOTE! Progress Holding  can check creditworthiness of the  contractor in the  Register of insolvent companies. Setting up a business in Poland its  important support for a foreigners.

Opening a Business in Poland for Ukrainians and Belarusians

Opening a Business in Poland for Ukrainians and Belarusians.

Recently a lot of investors from Ukraine and Belorussia investigate how to start a company in Poland. How can a Ukrainian open a business in Poland? We frequently receive this question. Recently, due to the current global events, doing business in Poland has become a good alternative for Ukrainians and Belarusians. Advantage is that Ukrainians have the right to create companies in Poland under the same conditions as Polish citizens.

Ukrainians residing in Poland on a visa or temporary residence permit can open companies in Poland. When registering a company, Ukrainians must provide a valid passport and proof of residence in Poland.

The process of opening a business in Poland for a Ukrainian is not much different from the process for any other foreigner. In other words, a Ukrainian citizen goes through the same steps and processes to open a company in Poland that we described above.

Features of Opening a Business in Poland for Ukrainians: Setting up a business in Poland for Ukrainian citizens and tax residents who register a business in Poland, there is an additional obligation under Ukrainian legislation: they must notify the Ukrainian tax authority about acquiring a stake in a foreign company or gaining control functions in that company (hereinafter referred to as the Notification). This is due to changes in Ukrainian tax legislation that came into effect in early 2022, which established the concept of a “controlled foreign company” and a range of obligations for its owners and managers.

How to open a one person company in Poland as a Ukrainian

Opening a one person company in Poland for a Ukrainian occurs under the same conditions as for Polish citizens if the Ukrainian has a PESEL UKR. We have described how to open a sole proprietorship above.

To open a one person company, a Ukrainian needs a valid passport and proof of residence, which can be a temporary residence card.

We also want to remind you that there are government support programs in Poland for Ukrainian entrepreneurs, providing financial assistance and consulting services.

If you have additional questions about how to set up a company in Poland, or if you would like to receive additional consultations, please write to us at: office@progressholding.pl