Poland
Setting up a company in Poland
When setting up a company you may want to consider these factors
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Business factors
Business factors need to be considered, such as:
- The industry and type of business
- Nationality of the headquarters/individual(s) and
- Presence of existing trade agreements or relationships
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Location
Location will be another factor. Separate cities and regions may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.
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Geography
Geography may be an issue. At present, Poland is lacking in its transportation systems, with weak road, railway and infrastructure network, which increases the cost of doing business due to the difficulty of accessing each regional Polish market. Internet access is generally good in urban areas, although can be poor in less populated areas.
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Regulation
Regulation has long been an issue in Poland, a country known for an inefficient commercial court system, rigid labour code and heavy red tape. These have all historically proven challenges to foreign companies.
Your Options
Setting up and carrying out business in Poland as a foreigner is highly regulated. Entrepreneurs from non-EU countries may only establish and operate a business in the form of a limited liability company, joint-stock company or limited partnership. Investors may also choose to purchase an existing company. Entrepreneurs from EU countries are able to set up any type of company, the same as Polish citizens. It is also possible to set up a branch or representative office.
Before choosing which legal form of business to set up, entrepreneurs should consider the scope of responsibilities, running costs, size of the business, etc. Limited liability companies are the most popular type for foreigners.
Limited Liability Company
This is the most popular type of business set up by foreigners in Poland, and are intended for larger business ventures. Shareholders are only liable to the amount of share capital they hold.
To establish a company, share capital of PLN 50,000 is required.
In addition, it is necessary for the new company to obtain a REGON (statistical number), NIP (tax identification number) and register for VAT payment.
Steps Required
- Partnership must be entered in the Polish Court Register
- Obtain Certificate of Approval,
- Post- Registration Procedures.
Joint Stock Company
This is a form of legal entity in Poland which carries legal personality with it, generally used for large corporations with more than one owner. The process of incorporation largely mirrors that of registering a limited liability company, with the key difference between the business types being that the joint stock company is fully liable for its obligations to its assets in entirety, without limitation.
Like a limited liability company, the steps for setting up a joint stock company are as follows
1. Execution of articles of association, which may be performed by an attorney. The following documents must be included:
- The business name and company’s registered office
- The purpose of the Company’s activities, as set forth in the Polish Classification of Activities
- If the company is established for a definite duration of a time, the duration of the company
The amount of share capital, at a minimum of PLN 50,000 - A provision as to whether a shareholder is allowed to hold more than one share
- The number of shares and nominal value subscribed for by each shareholder
It is recommended that the articles of association include information detailing what would happen if there was an increase in share capital, changes to the board of directors, additional contributions, dividends, and/or actions that require shareholder approval.
2. A Polish bank account must then be opened.
3. Contributions covering the entire company’s share capital should be paid to this new bank account.
4. An application to register the company with the Polish Court Register is then made. The following must be included:
- Motion for the REGON statistical number issued by the Central Statistics Office
- The application for the company’s registration with the Social Insurance Institution, agreeing to make the required payments, and
- The application containing the NIP tax number and relevant taxation offices.
5. The company’s management board is appointed.
6. The company is entered into the commercial register.
All of the above documents must be submitted in Polish, and therefore, if the applicant is not a Polish language native a registered translator must be appointed to translate the documents into Polish. If the signatories to the deed do not speak Polish, their signing must be in the presence of a sworn translator.
The process can be expected to take between one and two months to reach completion.
Limited Partnership
Limited partnerships may acquire rights and incur obligations. It is a form of commercial partnership and may be formed by at least two individuals – one as a general partner, and the other as a general partner.
This business type aims to keep the company under its own name before creditors and other obligations, be they financial or legal. One partner has unlimited liability whilst the other does not.
Applications for registering a limited partnership must include:
- The standard application form for all Polish companies
- The name, registered office and address of the company, as well as its purpose
- The name of the general partner(s) and the name of the limited partner(s), as well as explanation of the circumstances limiting the ability of shareholder action, if applicable
- The name of the person(s) authorized to represent the company, in which manner, if the general partner(s) have entrusted any individuals to represent the company
- The total sum of the partnership
- Proof of payment of the relevant registration taxes and fees.
Purchase a shelf company
Foreign investors who wish to begin a company in Poland may elect to purchase an existing company.
The most common business types in Poland are the limited liability company and general partnership. It can save significant time and costs involved in setting up a new company if investors choose to purchase a shelf company. Another advantage is that the investor is able to retain all or part of the existing company employees and therefore is spared the need to recruit and train staff.
While there are significant time and cost savings, the following steps must be taken:
1. Changes to the company structure will have to be registered with the Polish Trade Registry.
2. Formal registrations of the new management board need to be made and the Articles of Association will need to be updated.
3. The new shareholder can also implement additional changes, such as a new company name or new objects of activity.
Foreign Branch
Branches do not have legal personality, but rather act as a standalone and distinct part of the company operating in a different country. The parent company bears full liability for the branches’ actions.
This is suitable for companies which wish to control its activities in another country.
There is no minimum share capital requirement imposed.
The branch in Poland must have an authorised appointed representative of the foreign company.
1. The representative needs to provide identification details such as their name and address in Poland.
2. The company must then be registered in the National Court Register including the following documents:
- Minutes of the decision to open a branch
- The company’s articles of association
- Information about board members
- Information about the branch in Poland, including its business activity, address and name.
3. The company must then register for VAT.
Wholly owned subsidiary
Subsidiaries mimic Polish limited liability companies and must observe the same applicable rules and regulations. They are suitable for small and medium sized companies, and they are independent from the parent company, whereas the branch is not.
Foreign companies wishing to operate subsidiaries will not be liable for its business activities, as the subsidiary itself acts like a limited liability company and is therefore liable for its own activities. While the registration process is slightly longer, the relief of these liabilities is often favourable for foreign business owners. This is the most popular form of business for foreign entities that choose to commence business operations in Poland.
To register a subsidiary, the same steps must be followed as if a limited liability company is being set up. A minimum share capital of 5000 PLN is required, and the company name requires the suffix “spolka z o.o”.
The following documents are required to register the subsidiary:
1. Minutes detailing the foreign company’s decision to open a Polish subsidiary
2. The subsidiary’s Articles of Association, which include the name and address, regulations, objectives, shareholder names and capital contribution, and their rights.
3. A bank account in Poland must be opened for the subsidiary.
4. The subsidiary must register for VAT.
Outsourcing Employment Through a GEO Employer of Record Service
Whether to incorporate in Poland, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.
If the company intends to have staff in Poland they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where
- the company is looking to setup an office quickly
- the company wants to work within a defined budget
- the company wants to limit its initial commitment in Poland
- the company needs help with tax, employment, immigration and payroll compliance in Poland
The complexity of employment regulations in Poland makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.
AtoZ Serwis Plus provides a comprehensive service in Poland allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Poland.
AtoZ Serwis Plus then becomes the Employer of Record. AtoZ Serwis Plus assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using AtoZ Serwis Plus is the fastest and most cost effective way to deploy local and foreign workers into Poland. Read more about outsourced employment through AtoZ Serwis Plus.
