8 Types of Companies in Poland
Opening a business in Poland requires making a choice between 8 types of companies available. Each type has its own unique characteristics, and the choice depends on desired type of ownership, size of the enterprise, number of people you plan to employ, and a range of a personal financial responsibility of the entrepreneur.
The most common company type in Poland is a sole proprietorship with over 2,800,000 companies registered, often chosen due to the minimum formalities necessary to set up a company, as well as the simple process of closing the business.
The second type of company, the most frequently registered in Poland, is a limited liability company with 10,000 companies added quarterly to a National Court Register (KRS), chosen for no risk of liability with personal assets.
The 8 types of companies that can be started in Poland are listed below.
- Limited liability company
- Joint-stock company
- Limited joint-stock partnership
- Sole proprietorship
- Limited partnership
- Civil partnership
- Registered partnership
- Professional partnership
Table of Contents
1. Limited liability company
A limited liability company (LLC) in Poland is called “Spółka z ograniczoną odpowiedzialnością”, sp. z o.o., is the second most frequently opened form of business.
A Polish limited liability company is one of the best types for small companies which intend to delegate tasks and reduce business risks. LLC is attractive due to the low initial capital, which is PLN 5,000, approximately €1,080 or $1,155. An entrepreneur opening a limited liability company is not responsible for the company’s liabilities with personal property, but only with the amount of capital contributed.
Starting a limited liability company in Poland requires a registration in a National Court Register (Krajowy Rejestr Sądowy, KRS), depositing a share capital on a company’s account, and registering in ZUS.
Registration of a Polish limited liability company is done in-person by signing a company agreement in a notary’s office in the form of a notarial deed, or by sending an online form via KRS S24. Signing the contract in a traditional way requires presence of all the business partners in a notary’s office, as well as additional online registration in a Polish Court Registers Portal (Portal Rejestrów Sądowych, PRS).
Depositing a share capital on a newly formed limited liability company’s bank account must be done no later than 7 days after registration. In case of not fulfilling this requirement, the lack of share capital will be noted in the KRS.
Registration in the Polish Social Security Institution (Zaklad Ubezpieczeń Społecznych, ZUS) is obligatory for all the shareholders if they are not entitled to health insurance from any other source.
A Polish limited liability company is funded by one proprietor, hence it is a good solution for someone who does not have large capital and does not want to be responsible for company operations with their personal assets.
Incorporation of a limited liability company in Poland cannot be performed by persons who have been convicted of certain crimes, such as corruption, financial crimes or acting to the detriment of the company. These persons are excluded from serving as president of a limited liability company, however they are allowed to be partners of the company.
Businesses registered as a limited liability company in Poland are subject to the obligation to pay CIT on income and VAT on goods and services after exceeding the sales limit of PLN 120,000, which is an equivalent of $27,782 or €25,883 per year.
2. Joint stock company
A joint-stock company (JSC) in Poland is called “Spółka akcyjna” and abbreviated as S.A. Operating a joint-stock company is one of the most complicated and complex forms of business.
Polish joint-stock companies are the best for rapidly growing business and are usually created by transformation from limited liability or partnership companies, and chosen by people with large financial and investment plans.
Polish joint-stock company is registered in four steps, and requires concluding a company agreement and its registration in a National Court Register (Krajowy Rejestr Sądowy, KRS), establishing company’s governing boards, depositing a share capital on a company’s account, and signing a contract for maintaining the register of shareholders.
Concluding a company agreement of a Polish joint stock company is accomplished either in person by executing a company agreement at a notary’s office through a notarial deed or by submitting an online form via KRS S24. The traditional in-person signing of the contract establishing the
JSC necessitates the presence of business partners at a notary’s office, in addition to online registration on the Polish Court Registers Portal (Portal Rejestrów Sądowych, PRS).
Establishing company’s governing boards for a joint-stock company in Poland requires an appointment of the management board, supervisory board and general meeting. The boards are obliged to continuous supervision of company operations, and are appointed in company agreement or by separate acts. The competences and scope of responsibilities of members of the boards of Polish joint-stock companies are determined by the Commercial Companies Code.
Depositing a share capital for a Polish joint-stock company requires the amount of at least 100,000 PLN ($23,000 or €22,000). The share capital of S.A. company must be stored on a company’s bank account. The minimal worth of a single share issued by the company is PLN 0.01 (1 grosz) or $0.0023, which is the smallest quotation step on the Polish stock exchange, which means that it cannot be divided into smaller parts.
Signing a contract for maintaining the register of shareholders for a Polish joint-stock company requires the newly established management board to authorize it by a brokerage house or a notary.
A Polish joint-stock company cannot conduct simplified accounting and is obliged to provide transparency and full accounting.
The joint stock company in Poland is obliged to pay CIT and VAT, with rates dependent on the size of the company.
3. Limited joint-stock partnership
A limited joint-stock partnership is called in Polish “Spółka komandytowo-akcyjna”, S.K.A. This type of a company indicates that at least one business partner takes the role of a general partner, and is liable for the company’s obligations with all their assets, while the other partners are shareholders who are not liable for the company’s operations.
Operating a limited joint-stock partnership is the most profitable for larger family businesses. The initial capital in a limited joint-stock partnership is at least PLN 50,000, that is ca. €10,800 or $12,600.
A limited joint-stock partnership in Poland is characterized by high costs of accounting due to the fact that it must be full accounting, as well as the difficult process of registering the company due to the need to do it at a notary.
A Polish limited joint-stock partnership is obliged to pay CIT and VAT.
4. Sole proprietorship
A sole proprietorship is called in Polish “Jednoosobowa dzialalność gospodarcza” or JDG for short, is one of the easiest companies to set up and run in Poland.
Polish sole proprietorship is the most beneficial type of company for individuals running a personal business who does not plan to employ employees, for example provides specific services or sells handmade products.
A person setting up a sole proprietorship must take into account the monthly costs of ZUS contributions, which in the first two years amount to 30% of the minimum wage. The 30% of a minimum wage in Poland is PLN 1,080 ($251 or €235). After two years the rate is raised to 60% of the average wage, for example in 2023 it is amount 4,161 Polish Złoty ($968 or €904).
An entrepreneur setting up a sole proprietorship must take into account the obligation to personally pay personal income tax (PIT) on income and VAT if the annual sales amount exempt from this fee is exceeded PLN 200,000 ($46,512 or €43,478).
Opening a company in Poland as a JDG does not require your own contribution, but the entrepreneur is liable for the company’s obligations with all his or her personal property.
5. Limited partnership
Limited partnership in Poland is called “Spółka komandytowa”, in short Sp.k., and establishes a type of business in which partners have different rights. One partner of a limited partnership is the general partner, who is fully responsible for the partnership’s obligations, and the remaining partners, called limited partners, are liable only up to the limited partnership sum specified in the agreement.
Operating a limited partnership in Poland is beneficial when the form of contribution of the partners is different, or when some partners contribute ideas or skills, while others contribute property. There is no specified minimum amount of financial contribution to become a partner in such a company.
In a limited partnership in Poland there is no tax on income, all partners are obliged to settle their accounts individually, but accounting is settled in a limited partnership in full.
If the annual income within a Polish limited partnership exceeds the threshold of PLN 200,000 ($46,512 or €43,478), the limited partnership is obliged to pay VAT.
6. Civil partnership
A civil partnership is called in Poland “Spółka cywilna” and abbreviated as SC. This is the oldest form of company established in Polish law. A civil partnership is a common choice among family businesses due to the joint division of profits and responsibilities.
Opening a Polish civil partnership requires only signing a company agreement in writing and reporting it to the Central Register of Companies (Centralna Ewidencja i Informacja Gospodarcza, CEIDG). The only exception applies when one of the shareholders contributes a real estate to the company’s assets, when the notary deed is required.
Operating a civil partnership requires at least two shareholders. No initial capital is required to start a business.
In a civil partnership, all members are jointly and severally liable for the company’s obligations with their personal assets, but liability is limited to the value of their own contribution.
The income of a civil partnership in Poland is taxed directly by its partners, which means that the company as an entity does not submit taxes.
Polish civil partnership is obliged to settle VAT if the annual sales threshold exceeds PLN 200,000 ($46,512 or €43,478).
7. General partnership
General partnership is called in Poland “Spółka jawna”, in short Sp.j., is a solution for entrepreneurs planning short-term cooperation, because dissolving the company does not require additional formalities or contributing a share capital. It is also a good choice for family businesses and specialists who want to manage profits together.
To establish a general partnership in Poland you need to submit an application in a National Court Register (Krajowy Rejestr Sądowy, KRS).
A general partnership In a Polish general partnership, the financial liability of partners is not limited to the value of the contribution. In a general partnership, all members have equal rights to manage the company. The partners share profits and losses in accordance with the concluded partnership agreement.
A general partnership is not a tax entity, so no tax is settled on its income, and each partner settles it independently. However, VAT is payable if there are no grounds to use the exemption.
8. Professional partnership
A professional partnership in Poland is called “Spółka partnerska” and abbreviated as Sp.p. This is the only form of activity among all the 8 types of companies operating in Poland that is reserved for specific professional groups. Persons who should use this type of company are listed in Article 88 of the Commercial Companies Code and include architects, doctors, accountants, and lawyers.
The partnership does not pay tax on the income it receives. Each person forming part of the company settles their taxes individually and decides whether they will be taxed with personal income tax or a flat tax rate.
Polish professional partnerships do not have a specific initial share capital threshold defined by law, which is beneficial from the point of view of a newly opened company.
Despite relatively low registration and operating costs resulting from the possibility of conducting simplified accounting, establishing a professional partnership requires a number of formalities, including entry in the National Court Register and preparation of a company agreement.
VAT is not levied on services sold within the professional partnership in Poland. Each of its partners is obliged to pay VAT if the annual sales exceed PLN 200,000, which is an equivalent of $46,512 or €43,478.
What is the most common company type in Poland?
The most common type of company in Poland is sole proprietorship. However, in recent years (2020-2023), limited liability companies have been the most frequently opened.
According to data from the Central Statistical Office, at the end of 2020, the largest group of legal entities were sole proprietorships and there were 2,842,396 of them registered in Poland.
The second largest type of company in Poland is a civil partnership with 280,568 registered companies.
The percentage of the 8 types of companies varies strongly each year. Sole proprietorship and limited liability companies are the most popular ones. Both are the most attractive option for foreigners and online businesses because of minimal formalities. The additional advantage of establishing a JDG or sp. z o.o. is a possibility of a fully online registration process. Changing a specific type of business in Poland after registration is possible with the exception of sole proprietorship.
Which type of Polish company is better for foreigners?
For foreigners opening a business in Poland the best choice is a limited liability company. Polish limited liability companies are allowed to have both Polish and foreign partners, and the company can be registered online. Additionally, the owners of limited liability companies are not personally liable for the company’s debts.
The second attractive type of business in Poland for foreigners starting a company in Poland is a limited partnership because it allows both active and passive partners. Active ones work in the company and are responsible for decisions, passive ones only contribute capital.
Both limited liability companies and limited partnerships are attractive for foreigners operating a business in Poland as they do not require complicated operations and at the same time offer a safe starting position.
Which type of company is better for an online business in Poland?
For an online business in Poland The best type of company is a sole proprietorship (Jednoosobowa działalność gospodarcza, JDG) or a limited liability company (Spółka z ograniczoną odpowiedzialnością, sp. z o.o.). These two types require a minimal number or none formalities done in person. A limited liability company will be more attractive for businesses that involve major investments or plan to use venture capital.
Is it legal to own multiple types of companies in Poland?
Yes, it is legal to own many types of companies in Poland. There are no restrictions on the number of companies in which you are allowed to have shares. Nevertheless, it is worth remembering that starting another company involves multiple responsibilities, as requirements for types of companies differ in Poland.
Before deciding to open another type of business, it is worth considering whether it would be better to invest in an already operating business, and it is also worth consulting your plans with a tax advisor or lawyer to obtain reliable and up-to-date information.
Is it possible to change the company type after registration?
Yes, it is possible to change the company type after registration. However, this is time-consuming and not all types of companies can be transformed into other types. In most cases, the more beneficial way to change the company type is to close a business and open a new one than to change its type.
A sole proprietorship business is allowed to be transformed into a limited liability company, a general partnership, professional partnership, limited partnership, limited joint-stock partnership, and a limited liability company. A joint-stock company is allowed to be transformed into any other commercial company. A civil partnership is also allowed to be transformed into any other commercial company using a simplified procedure.
Effective transformation of company type in Poland begins with the preparation and submission of a transformation plan to the National Court Register, which must appoint an expert to examine the plan. In the case of companies, partners and employees should be notified twice, one month before the planned change. After accepting these actions, an application must be submitted to the National Court Register for registration of the transformation. It takes up to several months to complete all of these activities. Therefore, when setting up a company, it is worth considering carefully the choice of the form of running it.
How to start a company in Poland?
To start a company in Poland you need to choose one of the 8 company types. Starting a company requires also registering it in-person or online. It is done in Central Register of Companies (Centralna Ewidencja i Informacja Gospodarcza, CEIDG) or in National Court Register (Krajowy Rejestr Sądowy, KRS), depending on the type of business you choose to start.