- 16 February 2023
- Posted by: Przemysław Bukowski
- Category: Articles
Poland’s presence within the EU guarantees a huge market for products, business opportunities, as well as the use of manpower and the recruitment of specialists at various levels in a particular field of production or construction. In our new article, we would like to explain more about setting up a construction company in Poland and how to run it. Construction companies are very popular in all industrialised countries and Poland is no exception – the sector is growing, the government is investing in construction and there is plenty of work to be done and high profits to be made. Progress Holding will try to tell you how to start a construction company in Poland, what is needed for this and what difficulties and requirements you may encounter.
IMPORTANT: We would like to point out that setting up a company in Poland is quite easy and not accompanied by any difficulties, and the process itself is quite accessible for foreigners.
The first step to start a construction business in Poland is to register a company in Poland. The registration process takes an average of 5 to 10 days. Before starting the registration process, you will need to establish the following points and prepare the necessary information:
- Determine the name of your future company
- Determine the address of the company’s registered office
- Determine the number of co-owners and their shares
- Determine the amount of share capital. (Foreigners are more likely to choose the form of limited liability company, in which case the amount of share capital will be 5000 PLN)
- Appoint the company’s management board
- Draw up the articles of association
- Selection of the type of business activity – PKD codes (not more than 10); in the case of registration of a construction company in the Polish Classification of Business Activities – section F – CONSTRUCTION, divisions 41, 42, 43.
NOTE: When choosing a legal form for a company in Poland, the entrepreneur must understand that by registering as a sole proprietorship, he will be able to conduct professional activities in the industry, but only on a smaller scale. For larger construction projects and conducting business in Europe, it is better to choose the form of a limited liability company. Statistically, 90% of construction companies in Poland open a limited liability company.
Registration of a construction company in Poland
Let’s go through the whole process of registering a company in Poland using the example of the limited liability company form.
There are two ways to register a company in Poland:
- registering a company in Poland online, through the S24 system
- registration of a company in Poland through a power of attorney (notarial) and then online via the PRS system
Let us consider both options in detail.
Online registration is the most cost-effective and fastest option. To register a company in Poland online, the following steps must be followed:
The board members and founders of the company must produce an ePUAP = EPC profile. The basis for obtaining a PESEL is the opening of the company in Poland, a notarised copy of the passport and a power of attorney.
- Once you have received your PESEL number, you must register on the ePUAP Trusted Profile website. Verification of your identity in the system must take place no later than 14 days after the permit is issued. You will have to visit one of the offices in Poland or a Polish consulate to verify your identity.
- Once you are able to sign documents electronically, you will need to register with the National Court Register (KRS).
- The next step is to pay an application fee, the amount is PLN 350. Once the state fee has been paid, the package of documents is sent to the court for consideration.
- If all documents have been submitted correctly and the court has no further questions, confirmation of the company’s registration comes. The company receives a KRS number. The electronic statement can be downloaded from the website. It also receives a Tax Identification Number (NIP), and a statistical number in the National Economic Register (National Economy Register).
- The next step is to open a bank account with a bank in Poland. The account will only be opened in the presence of the applicant, in person. The opening procedure takes 1-2 days.
- The final step is the registration of the new company with the Tax Office (to become a taxpayer and VAT payer), as well as the registration with the Social Security Office and the Statistical Office.
Notary registration is less popular in Poland because it is longer and more expensive. On average, it costs EUR 1000-1500 to notarise the articles of association and establish a company in Poland under the PRS system. The whole process takes from 1 month and more.
The notary does not require your personal presence if you have a notarised power of attorney. The following items are required for the notary:
- A valid passport
- Details of all founders
- Share capital
- Articles of association of the company
NOTE: If the articles of association are executed in this way, it is possible to personalise the articles of association for each owner (no further changes can be made online).
Organisation of the construction company
Employment of employees
Starting a construction business in Poland without hiring employees is basically impossible. Therefore, the next step is to find and hire employees. In Poland, the labour costs of workers from the former CIS countries are estimated to be lower than those of Poles. Therefore, hiring cheaper labour can save a lot of costs on construction works and services. Therefore, many construction companies hire foreign workers, thus saving a significant amount of money and lowering wage costs, thus increasing their competitiveness.
The process of hiring foreigners is very labour-intensive and requires work permits, which discourages local entrepreneurs. Therefore, entrepreneurs starting a business in Poland often bring employees with them and organise them themselves. It is also possible to find potential employees in Poland with the help of intermediary companies that can oversee the process of obtaining work permits, concluding contracts and assist with medical examinations and health and safety briefings.
In order to officially employ a foreigner in a construction company in Poland, requirements must be met, which are as follows:
- A foreign passport
- Employer’s application to employ a foreigner in Poland in the form of a permit (for up to 2 years), permit A (for up to 3 years). A permit A is required for other citizens.
- Signed contract with the employee (as a rule, contracts are concluded for 1 year)
- Open work visa (or visa-free visa for nationals of certain countries, e.g. Ukraine)
IMPORTANT: It is important to know that some construction work may fall under the category of “seasonal work”. In this case, a simplified work permit process applies.
Secondment of employees – foreigners to work in other EU countries
In Poland, there is also the A1 form – this form is issued by the Polish Social Insurance Institution (ZUS) to a person who has the right to stay legally in Poland (and pays taxes), but may be delegated to another EU country, e.g. to work on the basis of an agreement or contract. So if a construction company wants to take advantage of a business opportunity to operate in Europe and sign a contract for construction work in another EU country, the A1 form is a mandatory document for an employee working on a Polish visa or residence card. Please note that the A1 form alone will not be sufficient for a foreigner and additional documents will be required. An employee can run a construction company on the territory of other countries for no longer than 183 days.
An important element in the operation of a construction company and the development of the business will be the availability of equipment, or lack thereof. Many budding entrepreneurs and start-ups who cannot afford expensive equipment (e.g. the cost of even used equipment, such as an excavator from £290,000, a bulldozer from £300,000) resort to renting the necessary equipment and tools or contacting contractors who already own construction equipment. As experienced entrepreneurs say, it is better to save on equipment, as renting it will make you uncompetitive.
Licences and permits
You do not need a licence to start a construction business in Poland. Construction activity in Poland is regulated by a building permit. A newly-established construction company, before starting work, submits all the necessary documentation for a building permit (or an agent you hire to supervise the work will do it for you) and, once it is obtained, starts construction work. There is a list of building and renovation works that do not require planning permission but only a notification to commence. These include car parks, latrine cleaning, fencing, house insulation, compaction work, etc.
Other construction work must be notified to the authorities or a building permit must be obtained. These permits can be obtained from local authorities and are usually not difficult. And if you can find a suitable civil engineer in your area, he or she will have the connections and business acumen to obtain and produce the necessary documentation.
Setting up a business in Poland is not enough. Attracting clients is also essential to launching a construction company. Few companies grow quickly. It is also very difficult to start a successful construction business from scratch. The lack of positive reviews and experience of a newly opened company also makes it difficult to find customers. The high level of competition in the industry should not be forgotten either. This is why many young construction companies resort to working with large companies as contractors or subcontractors. Such joint work will have a positive impact on the company’s reputation and will start to open up a ‘portfolio’ of their work.
Don’t forget to advertise your services on various online resources. Although this will require an additional financial outlay, but the reach can be very large, which will also find customers for your services and give a boost to your business.
Get the job done well for competitive prices, and here is the ‘word of mouth’ in front of you, which will also contribute to the promotion of your company in the construction market in Poland, as well as the possible expansion of your business in Europe.
You can also attract clients through various digital services such as building your own website, attracting targeted advertising on social networks, SEO promotion.
Specifics of accounting in a construction company
Accounting in a construction company in Polandmall differ from accounting in any other company, although, there are some nuances and peculiarities.
The main difficulty will be that in construction there are many steps and operations that must be provided and displayed correctly in accounting. At a minimum, the following elements must be taken into account:
- The specifics of the facilities, their characteristics
- Preparation for construction (design of layouts, plans, execution of documents)
- Possibility of step-by-step calculations
- Availability of specialised documents – cost estimates, construction certificates, designs, invoices for internal movements and material transfers, etc.
It is preferable for the construction company to keep its books separately for each process:
- Preparation for construction
- Transport costs
- Purchase work
- Construction and installation work.
Among the main peculiarities of construction accounting is the large number of different materials that builders work with. If these are stored in different warehouses, this can complicate the inventory and accounting process.
Construction accounting is prepared according to normative ratios in order to compare final actual costs with planned costs. All direct costs are rationalised: the cost of materials and services, employee wages, depreciation, etc.
The reporting deadlines for a construction company in Poland are as follows:
- Corporate income tax (CIT) – pay in advance by the 20th of the previous month
- CIT-8 (annual report) – by 31 March each year
- VAT-7 report – every month by the 25th day of the preceding month
- Payroll – by the 15th of the preceding month
- Annual financial report – by 30 June.
In accounting for a construction company, we would like to focus on construction in progress. Construction in progress is the set of costs incurred by the builder that have accumulated from the day the facility is laid down to the day it is commissioned. Completed facilities are tied to a specific plot of land. Completed buildings and structures must be permanent; temporary buildings are accounted for separately.
IMPORTANT: The total of construction in progress is made up of actual costs only.
Construction in progress cannot be depreciated.
Upon receipt of the source documents, the accountant sums up all the cost items of the erected building or structure. The total records the costs of equipment, finishing materials, raw materials, employee wages, fuel for machinery. If a defect is discovered during a site inspection, it will be included in the costs.
The process of setting up a company in Poland is quite time-consuming, but in principle, if the entrepreneur approaches the matter competently, there should be no particular problems. If you want to set up a company in Poland and save time and effort, it would be better to turn to professionals who are well versed in all stages of setting up a company and are familiar with local regulations. We are ready to help you at every stage. If you have any questions or would like more advice on the subject, please contact us at email@example.com.