Unregistered company or entrepreneurship without registration. What are the risks in Poland?

An unregistered company – it sounds absurd, doesn’t it? However, such companies can still be encountered. Many unscrupulous entrepreneurs believe that if their company’s income is small, the tax office or other regulatory bodies will not notice them. This is not the case. Illegal business activities in Poland include companies:

• Without registration
• Without accreditation
• Without licenses

Such companies are usually not registered in the trade register and tax authorities. Financial activities are carried out through personal bank accounts. Documents confirming business activities are often not issued.

The reasons why unscrupulous entrepreneurs do not register their business include the following:

• Desire to avoid taxation
• Various administrative requirements
• Lack of knowledge about business registration requirements
• Lack of necessary documents or funds for registration

Polish authorities actively fight illegal businesses and tighten penalties for engaging in such activities. Various services are involved in this fight in Poland – the police, tax authorities, prosecution, consumer market surveillance agencies, and antitrust bodies.

Types of liability for running an illegal business in Poland:

Administrative and tax:

• Fines ranging from 5,000 to 20,000 PLN (in some cases up to 100,000 PLN) for conducting business activities without registration.
• Obligation to pay all due taxes and contributions to ZUS (social security system).
• Confiscation of property used in business activities.

Criminal liability:

• Imprisonment for up to 2 years for large-scale tax evasion (over 10,000 PLN).
• Imprisonment for up to 5 years for organizing a criminal group to conduct unregistered business activities.

Other consequences:

• Difficulties in obtaining loans or investments.
• Inability to take advantage of benefits and subsidies available to registered entrepreneurs.
• Damage to reputation and loss of trust from clients and partners.

To avoid legal problems, we always recommend registering your business. To choose the right form of registration for your business in Poland, consult with an accountant and a lawyer, and fulfill all necessary requirements.

On our website, you can learn about the process of registering your business in Poland.

If you have any questions on this topic or would like to receive additional consultations, write to us at: office@progressholding.pl.