Business entities in Poland in 2021
Since 2003, Healy Consultants Group PLC has assisted several of our Clients by being a foreigner’s guide to starting a 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). When our Clients are planning to export their products overseas, it is also often advantageous to register their preferred entity in one of Poland’s special economic zones, which offer excellent infrastructure facilities and tax exemptions, as well as a fast track process to secure manufacturing permits.
Doing business in Poland with a local entity
The Poland limited liability company (spółka z ograniczoną odpowiedzialnością, abbreviation sp. z o.o.)
- In Poland, registration of a limited liability company is easy, with i) a single shareholder, making a minimum contribution of €1,200 (PLN5,000) to a local capital account before registration of the company with the Polish Companies Registrar and ii) one director, who can be a foreigner and does not need to reside in Poland;
- Polish limited liability companies are required to submit financial statements every year to the tax authority. An audit is however required only if the business meets at least two of the three following criteria: i) assets exceeding €5 million; ii) annual turnover exceeding €2.5 million and iii) over 50 employees;
- Best uses for a Poland limited liability company: the Poland LLC is the most popular form of structuring a business activity in Poland. It is an optimal vehicle for most trading activities.
The Poland joint stock company (spółka akcyjna, abbreviation SA)
- To start your business in Poland via a joint stock company, a minimum share capital of €23,800 (PLN100,000) is required, of which at least 25% must be paid up at incorporation. At least one shareholder and one director of any nationality is necessary for the incorporation process to be complete;
- It is not mandatory for a joint stock company to list on a stock exchange. However, according to the accounting regulations in Poland, it will still be required to get its annual financial statements audited every year, with no exemption available;
- Best uses for a Poland joint stock company: This business entity is recommended when the promoters intend to publicly list the company. To give your company a marketing edge, Healy Consultants Group PLC 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 special economic zones (SEZs) in Poland. Such zones intend to support export-oriented and high-tech businesses, with abundant availability of attractive land with all the infrastructure for business purposes. Minimum requirements include a minimum capital investment of €100,000 and creation of at least 250 new jobs;
- Under the Special Economic Zone Program in Poland, participating companies enjoy multiple incentives, including: i) income tax exemptions for qualifying companies; ii) regional aid for new investments and iii) administrative support from the SEZ administrators in legal and organisational issues;
- Best uses for a Poland free zone company: registering a company in one of the special economic zones (SEZs) in Poland is the optimal way to start a manufacturing and/or export-oriented business. Please read about the other low cost manufacturing locations in Eastern Europe.
The Poland limited joint stock partnership
- Poland provides for the registration of limited joint stock partnerships, registered by two types of partners: i) complementary partners, who are personally liable for the debt and losses incurred by the business and ii) joint stock partners, who are liable only up to the amount of their contributions;
- Complementary partners are usually responsible for the day to day management of the business, although they can issue a Power of Attorney to delegate this responsibility to a third party;
- Best uses for a Poland limited joint stock partnership: the main advantage of such entity is its tax transparency; no tax is due at the corporate level and all income is automatically deemed distributed (and taxable) to the partners. The main disadvantage is the unlimited liability of the complementary partners.
Doing business in Poland with a foreign entity
The Poland branch office (Oddziat)
- The Companies Code allows branch registration in Poland. The costs of registering a branch of a foreign company are extremely low, with no minimum capital requirement.. However, the company must appoint an agent in Poland to act as its representative. The branch office may additionally 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)
- The representative office 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;
- Foreign enterprises considering Poland can launch with a representative office for market research purposes before undertaking business registration in Poland;
- 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||Tax resident LLC||Free zone company||Joint stock company||Joint stock partnership||Branch||RO|
|Doing business in Poland permitted?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to sign contracts with local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to invoice local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Local office premises required before registration?||Yes||Yes||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||No||Yes||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||Yes||Yes||Yes||No|
|Accounting and tax|
|Corporate tax on local income?||19%||Up to 0%||19%||0%||19%||No income|
|Corporate tax on foreign income?||Yes||No||Yes||Yes||No||No income|
|Audit always required?||No||No||Yes||No||No||No|
|Annual tax return to be submitted?||Yes||Yes||Yes||Yes||Yes||Yes|
|Access to DTAAs?||Yes||Yes||Yes||No||Yes||No|
|Issued share capital required?||€1||€1,200||€23,800||€12,000||None||None|
|Paid up capital recommended?||€1,200||€100,000||€23,800||€12,000||€1,200||€1,200|
|Resident director/representative required?||No||No||No||No||Yes||Yes|
|Poland shareholder required?||No||No||No||No||No||No|
|Minimum number of directors?||1||1||1||1||1||1|
|Minimum number of shareholders?||1||1||1||1||Parent company||Parent company|
|Individual shareholders allowed?||Yes||Yes||Yes||Yes||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes||Yes|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff?||Yes||Yes||Yes||Yes||Yes||Yes|
|How long to get work permit approved||3 months||3 months||3 months||3 months||3 months||3 months|
|Estimate of engagement costs||€12,160||€14,910||€11,960||Contact us||€14,060||€15,780|
|Draft invoice||View invoice PDF||View invoice PDF||View invoice PDF||Contact us||View invoice PDF||View invoice PDF|