Business entities in Poland
Since 2003, Healy Consultants has assisting our Clients with selecting the optimal legal entity for the nature of their business. In Poland, the most common type of structure used for business registration by foreigners is the limited liability company (LLC, locally known as a sp. z.o.o). Alternatively, foreign companies can also register a branch office or a representative office. Lastly, it is also possible to register such entities in Poland’s special economic zones (click on the weblink for further details).
The Poland limited liability company (spółka z ograniczoną odpowiedzialnością, abbreviation sp. z o.o.)
- An LLC must appoint at least one director who may be a natural person or legal entity. A Polish LLC needs at least 1 shareholder, of any nationality. However, according to the Poland commercial partnerships and companies code, a limited liability company is allowed to incorporate another LLC only if it has multiple shareholders;
- Minimum paid-up share capital of €1,200 will also be required during the completion of the incorporation process. The minimum share capital is divided into shares of equal or unequal par value;
- Best uses for a Poland limited liability company: the Poland LLC is the most commonly used business entity by foreigners willing to do business in Poland. It is an optimal vehicle for most trading activities.
The Poland public limited company (spółka akcyjna, abbreviation SA)
- Such a company requires a minimum share capital of €23,800 for incorporation, of which at least 25% must be paid up at incorporation. It also requires at least one shareholder and one director of any nationality for incorporation process to be complete;
- It is not mandatory for a PLC to list on a stock exchange in Poland. However, it will still be required to go through an annual audit;
- Best uses for a Poland limited liability company: This business entity is recommended when the promoters intend to publicly list the company. To give your company a marketing edge, Healy Consultants recommends our Clients establish a Poland PLC instead of an LLC and to list it on the Warsaw Stock Exchange or the Frankfurt Stock Exchange.
The Poland free zone company (SEZ company)
- Foreigners can register their business in one of Poland’s special economic zones. Such zones intend to support export-oriented and high tech businesses, by providing adequate infrastructure and facilities for their operations. Minimum requirements will vary from one zone to another and usually include a minimum number of job created and minimum capital requirements;
- Best uses for a Poland free zone company: registering a company in a free economic zone or industrial zone is the optimal way to start a manufacturing and/or export oriented business in Poland. See also this page for alternative low cost manufacturing locations in Eastern Europe.
The Poland branch office (Oddziat)
- The Poland Companies Code allows foreign companies to register local branches of their business with no minimum capitalization requirement. However, the company must appoint an agent in Poland to act as a representative with a local address. The branch office may have an independent management team and corporate bank account in Poland;
- Best uses for a Poland branch office: The main advantage of registering a branch is to enable the head office to prepare consolidated accounts, which will be translated and then submitted by the branch to the Poland tax office. However, the foreign head office is subject to unlimited liability for the operations and debt of the local branch.
The Poland representative office (Przedstawicielstwo)
- This is not allowed to make any direct sales within Poland or sign contracts and henceforth not subject to local corporate income tax. Like a branch, appointment of a resident representative is mandatory;
- Best uses for a representative office: A representative office in Poland may only conduct activities that involve advertising and promotion of the parent company.
Table of comparison between different entity types
|Operations and logistics||LLC||PLC||Free zone company||Branch||RO|
|Also known as:||sp. z o.o.||SA||SEZ company||Oddziat||Przedstawicielstwo|
|Doing business in Poland permitted?||Yes||Yes||Yes||Yes||No|
|Allowed to sign contracts with local Clients?||Yes||Yes||Yes||Yes||No|
|Allowed to invoice local Clients?||Yes||Yes||Yes||Yes||No|
|Can register the company with a virtual office solution?||Yes||Yes||No||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||Yes||Yes||No|
|Accounting and tax|
|Standard Poland corporate tax?||19%||19%||19%||19%||0%|
|Corporate bank account?||Societe Generale Poland||HSBC Poland||NBP Poland||Bank Millenium||CommerzBank|
|Statutory audit always required?||No||Yes||No||No||No|
|Annual tax return to be submitted?||Yes||Yes||Yes||Yes||Yes|
|Access to DTAAs?||Yes||Yes||Yes||Yes||No|
|Issued share capital required?||€1,200||€23,800||€1,200||None||None|
|Resident director/manager required?||No||No||No||Yes||Yes|
|Poland shareholder /partner required?||No||No||No||No||No|
|Minimum number of directors/managers?||1||1||1||1||1|
|Minimum number of shareholders/partners?||1||1||1||Parent entity||Parent entity|
|Individual shareholders/partners allowed?||Yes||Yes||Yes||No||No|
|Corporate shareholders/partners allowed?||Yes||Yes||Yes||Yes||Yes|
|Public register of shareholders and directors?||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff in Poland?||Yes||Yes||Yes||Yes||Yes|
|How long to get work permit approved?||3 months||3 months||3 months||3 months||3 months|
|Estimate of engagement costs||€10,960||€10,960||€13,910||€13,060||€14,780|