Company Formation in Poland: Register a Business
Company formation in Poland is the process of officially starting a business entity. This involves choosing from various company types, such as limited liability companies or partnerships. You start by selecting the appropriate business structure based on factors like liability and ownership and then the registration process which includes reserving a unique company name, drafting, and notarizing articles of association, depositing share capital (for certain entities). Registering the company with the National Court Register, Tax Office, and Social Insurance Institution is also required.
Key documents required include articles of association, identity papers for shareholders and directors, proof of share capital deposit, office address, tax, and personal identification numbers.
Costs involved include notary, registration, and legal fees, varying based on company type and complexity. In Poland, total costs range from approximately PLN 2,000 to PLN 5,000 ($458 to $1,147). It’s essential to consult with legal and financial experts for a precise cost estimate tailored to your specific situation. The process duration depends on the company type and administrative efficiency, ranging from 1 to 3 months.
Table of Contents
How to start a new company in Poland?
To start a new company in Poland, the six steps below have to be followed.
- Choose the Type of Company
- Prepare the Necessary Documents
- Verify and Register the Company’s Name
- Register for Tax
- Register as an Employer
- Obtain Required Permits
1. Choose the Type of Company
Choose the type of business entity that aligns with your objectives. There are 8 type of business structures in Poland, the main ones include Sole Proprietorship (Działalność Gospodarcza Jednoosobowa), Partnership (Spółka Cywilna), Limited Liability Company (Spółka z Ograniczoną Odpowiedzialnością or Sp. z o.o.), and Joint-Stock Company (Spółka Akcyjna or S.A.).
Sole Proprietorship is suitable for individuals who want to start and operate a business on their own as it offers simplicity in terms of ownership and management. Partnership is suitable for cooperation between two or more entities or individuals who want to run a business together. Limited Liability Company (or Sp. z o.o.) is suitable for businesses that want a separate legal entity with limited liability for shareholders. Joint-Stock Company (or S.A.) is suitable for larger businesses with substantial capital requirements.
2. Prepare the Necessary Documents
Prepare documents starting with articles of association (Umowa Spółki) which outlines the company’s purpose, management structure, and details about shareholders’ contributions and responsibilities. Notarization of articles of association is required, and the cost ranges from PLN 1,000 to PLN 2,000 ($229 to $458).
Shareholders and directors must provide valid ID documents, such as a passport or ID card. Your company must have a physical address in Poland, which is either owned or rented.
3. Verify and Register the Company’s Name
Verify the availability of your chosen company name through the National Court Register (KRS). The name has to be unique and not already registered by another business in Poland and it should not violate any trademarks or copyrights held by others. The name should not contain offensive or misleading words. Names suggesting a connection to government authorities or institutions require a special approval.
Register the company name to reserve it. The registration fee ranges from PLN 100 ($23) in the case of a sole proprietorship up to PLN 10,000 ($2,200) for a joint stock company. During the registration, it is required to deposit the minimum share capital which ranges from 0 PLN to PLN 100,000 ($22,949) depending on the company type.
4. Register for Tax (NIP, REGON, VAT)
NIP (Numer Identyfikacji Podatkowej) is your tax identification number and is obtained during the registration process. REGON (Rejestr Gospodarki Narodowej) is a statistical identification number for your company, provided automatically upon KRS registration. If your company’s turnover is equivalent to € 2 million or 9,301,635 PLN ($2,134,700) in the preceding tax year, then you have to register for VAT. The standard VAT rate in Poland is 23%.
5. Register as an Employer (ZUS)
If you plan to hire employees, you must register as an employer with ZUS (Zakład Ubezpieczeń Społecznych). Contributions to ZUS cover social insurance, health insurance, and retirement benefits for your employees.
6. Obtain Required Permits
Businesses in Poland need various permits and licenses depending on their industry and activities. These permits include environmental permits, construction permits, health and safety permits, alcohol or tobacco licenses, food handling permits, transportation permits, fire safety permits, import/export licenses, financial services licenses, specialized industry permits, entertainment and event permits, and professional licenses. The specific permits required vary based on the nature of the business and its location, and it’s essential for entrepreneurs to research and comply with all applicable regulations to ensure legal operation in Poland. Consulting with local authorities and industry-specific regulatory bodies is often necessary to determine the exact permit requirements.
What documents are required for company formation in Poland?
To open a company in Poland, citizens as well as foreigners are required to submit the following documents.
- Passport or Identity Document
- Proof of Legal Stay (Foreigners only)
- Tax Identification Number (NIP)
- Articles of Association
- Registered Office Address
- Share Capital Deposit (if applicable)
- National Court Register (KRS) Documents
It’s essential for foreign individuals or entities seeking to form a company in Poland to work closely with legal and business professionals. They will guide foreigners through the process and ensure compliance with all requirements. They also assist in gathering and submitting the necessary documents. The exact requirements also change over time, so staying up to date with current regulations is crucial.
Can a foreigner start a company in Poland?
Yes, a foreigner can start a company in Poland. Poland welcomes foreign entrepreneurs and investors, and there are no specific nationality restrictions for company formation. However, foreigners must adhere to the legal requirements and provide the necessary documents, such as a valid passport or identity document, proof of legal stay in Poland (e.g., visa or residence permit), and a tax identification number (NIP).
How much does company formation cost in Poland?
The cost of company formation in Poland varies depending on the type of business entity which ranges from PLN 170 ($39) to PLN 8,000 ($1,835).
For a Limited Liability Company (Sp. z o.o.), the total approximate cost is from PLN 6,600 to PLN 8,000 ($1,514 to $1,835) initially, with ongoing monthly expenses for accounting and office rental.
Notary fees for drafting and notarizing the Articles of Association range from approximately PLN 1,000 to PLN 2,000 ($229 to $458).
The registration fee for entering your company into the National Court Register (KRS) is approximately PLN 600 to PLN 1,000 ($137 to $229). Hiring an accountant or accounting services will incur ongoing costs, typically ranging from PLN 500 to PLN 2,000 ($114 to $458) per month, depending on the complexity of your financial operations. The cost of renting office space in Poland varies significantly depending on the location and size of the office. Monthly office rent ranges from PLN 30 to PLN 70 per square meter ($6.9 to $16 per square meter).
For a Sole Proprietorship (Działalność Gospodarcza Jednoosobowa), the costs are generally lower than for an Sp. z o.o. The primary and only expenses include registering with CEIDG (Central Registration and Information on Business), which costs approximately PLN 170 ($39).
Regarding a Joint-Stock Company (Spółka akcyjna or S.A.), the costs for establishing a joint-stock company are higher than for an Sp. z o.o. due to the larger required share capital (minimum PLN 100,000 or $22,949) and potentially more complex corporate governance requirements.
Is it necessary to hire an accountant for a new company in Poland?
No, it is not necessary to hire an accountant for a new company in Poland. However, it is highly advisable as an accountant ensures compliance with tax regulations. An accountant handles financial reporting and provides valuable financial insights for your business especially if you have an office with several employees.
Is it necessary to get an office for a new company in Poland?
No, it is not necessary to get an office for a new company in Poland. The choice to rent or establish an office space depends on the specific needs and nature of your business. Some companies operate without a physical office, especially in the case of online businesses or those with minimal physical presence requirements.
How long does it take to register a company in Poland?
The timeframe to register a company in Poland typically ranges from 4 to 12 weeks (1 to 3 months), depending on factors such as the type of company, the efficiency of document processing, and whether the process is conducted online or offline.
Registering a company online expedites the process, potentially reducing the registration time to the shorter end of this range. However, the exact duration varies based on the specific circumstances of the company formation and any potential administrative delays.
Is it possible to set up a Polish company online?
Yes, it is possible to set up a Polish company online. The online registration process significantly expedites the company formation, potentially reducing the registration time to the shorter end of the typical range (around 4 to 8 weeks) for most types of companies. However, the exact timeframe will vary based on individual circumstances and the efficiency of document processing. Setting up a company online offers convenience and efficiency in the registration process in Poland.
What types of companies can be registered in Poland?
In Poland, 8 types of companies can be registered including the LLC, JSC and partnerships.
Limited Liability Company (Sp. z o.o.) (or LLC) is a common choice for small to medium-sized businesses. It offers limited liability for shareholders, with a minimum required share capital of PLN 5,000 ($1,147). LLCs are subject to corporate income tax (CIT) which is the standard 9% and is liable for Value Added Tax (VAT) of 23%.
Joint-Stock Company (Spółka akcyjna or S.A.) (or JSC) is typically chosen by larger businesses. It requires a minimum share capital of PLN 100,000 ($22,949) and is subject to CIT of 19% and the 23% standard VAT.
Partnerships (Spółka Cywilna and others) have various structures including general partnerships (Spółka Jawna), limited partnerships (Spółka Komandytowa), and limited joint-stock partnerships (Spółka Komandytowo-Akcyjna). Partnerships are subject to different tax regimes, and taxation varies based on the specific structure and agreements among partners. VAT is the standard 23% as well.
The choice of company type in Poland impacts tax obligations, including corporate income tax (CIT), and whether the company needs to register for Value Added Tax (VAT). It’s essential to consider the legal and tax implications when selecting the appropriate company structure for your business in Poland. Consulting with legal and financial professionals helps ensure the right choice based on your specific needs and goals.
What are the tax rates for companies in Poland?
The primary tax rates for companies in Poland are split between corporate income tax (CIT) and value added tax (VAT).
The standard CIT rate in Poland is 19% where a reduced CIT rate of 9% is available for small businesses meeting specific criteria. These criteria are that the company’s annual revenue (including income from the sale of goods, products, and services) did not exceed the equivalent of €2 million or 9,301,635 PLN ($2,134,700) in the preceding tax year and the annual headcount of full-time employees did not exceed 9 in the preceding tax year. The company should not be controlled by another company whose company’s annual revenue is less than €2 million or 9,301,635 PLN ($2,134,700) in the preceding tax year .
The standard VAT rate in Poland is 23%. A reduced VAT rate of 8% is applicable to various goods and services, including most food products, books and newspapers, accommodation services, pharmaceuticals, and cultural/entertainment services. The 5% super-reduced VAT rate applies to basic food products, children’s car seats, textbooks and educational materials, and certain medical prosthetic devices.
Tax rates change over time due to legislative updates. It’s crucial to verify the most current tax rates and regulations with the Polish tax authorities or a tax advisor. The examples of goods and services subject to reduced or super-reduced VAT rates vary, so it’s advisable to consult the official guidelines for VAT rates in Poland when determining the applicable rate for specific transactions.
Do all Polish companies have to be VAT registered?
No, not all Polish companies are required to be VAT registered. Regardless of the benefits and liabilities of VAT registration, it is still mandatory for businesses that meet specific criteria to register for VAT.
These criteria are reaching a revenue threshold of 200,000 PLN ($45,899) or conducting activities subject to VAT including sale of goods, import and export of goods, construction and real-estate related activities, catering and hospitality services, and transportation and logistics services.
What are the benefits of registering a company in Poland?
The benefits of registering a company in Poland include access to the European Union (EU) single market, a stable and growing economy, skilled workforce, strategic location, investment incentives, and low operating costs.
Poland’s EU membership provides companies with access to one of the world’s largest and most prosperous economies. This access facilitates trade, investment, and business expansion opportunities throughout the EU. Poland has maintained a stable and resilient economy with consistent GDP growth over the years. It offers a favorable environment for businesses to thrive and expand.
Poland boasts a well-educated and skilled workforce, making it an attractive location for businesses seeking qualified employees. Poland’s central location in Europe makes it a strategic hub for logistics and distribution, enabling businesses to reach various EU markets efficiently.
The Polish government offers various incentives, such as grants, tax relief, and funding programs, to encourage foreign and domestic investment in key sectors of the economy. Compared to Western European countries, Poland generally offers lower operating costs in terms of labor, real estate, and other business expenses.
What are the liabilities after registering a company in Poland?
After registering a company in Poland, the primary liabilities and responsibilities are taxes, accounting and financial reporting, labor obligations, social insurance contributions, and regulatory compliance.
Companies in Poland are subject to various taxes, including Corporate Income Tax (CIT), Value Added Tax (VAT), and potentially other taxes depending on their activities. They are responsible for accurate tax reporting, payment, and compliance with tax regulations. Companies must maintain accurate financial records and prepare periodic financial statements in accordance with Polish accounting standards. Compliance with reporting requirements is crucial.
If the company employs staff, it must adhere to labor laws, including employment contracts, payroll management, and compliance with labor regulations, such as minimum wage and working hour requirements. Employers are responsible for deducting and remitting social insurance contributions (ZUS) on behalf of their employees. They must also contribute to social insurance funds.
Depending on the industry and activities, companies are subject to specific regulations and permits. It’s essential for companies in Poland to understand and fulfill these liabilities and responsibilities to maintain legal compliance, avoid penalties, and operate successfully in the Polish business environment. Consulting with legal and financial professionals will help ensure adherence to all legal obligations and requirements.