Company Formation in Poland in 2023

If you want to enter the European market, starting a business in Poland is one of the most lucrative options. As the sixth-largest economy in Europe, it is one of the top potential investment destinations, offering a low private debt, a strong domestic market, and a business-friendly environment for long-term investment. Moreover, Poland has been ranked as the best country for doing business in the Central and Eastern European (CEE) area. Investing in a stable economy with endless business opportunities will be wise.

However, the Polish business environment is hierarchically structured and challenging to navigate. The process becomes more complicated, especially when setting up a company in Poland as a foreigner. 

This article will familiarize you with the Polish business environment, the requirements for company formation in Poland, and the process. So, read ahead!

Poland Company Registration Benefits

Poland welcomes opportunities for growth, business establishment, and ideas created outside the Polish market. However, you must know how it will affect and benefit your business before registering a company here.

1. Central Location

Poland is in the heart of Europe. Its central location makes it a hub for businesses accessing Western and Eastern European markets. The proximity to major European economies reduces transportation costs and facilitates efficient distribution.

2. EU Membership

Poland has been a member of the European Union (EU) member for over a decade. EU membership provides access to a large and prosperous single market with over 500 million consumers. However, it also implies that Poland adheres to EU regulations and standards and can enhance the ease of doing business and promote trade.

3. Trade Opportunities and Incentives

The Polish government has implemented several programs to attract foreign investment. For example, Special Economic Zones (SEZs) and grants are available to incentivize foreign companies to establish themselves in Poland. Moreover, the country also follows double taxation treaties to ease international business.

4. Educated Workforce

Poland boasts a well-educated and skilled workforce. It has a strong tradition of higher education and produces many graduates in various fields, including engineering, technology, and business. You can easily find qualified professionals to hire to drive long-term success.

‍Also Read: The Advantages of Hiring Global Employees

Types of Business Structures in Poland

The Polish Company Act recognizes several business structures like LLCs, LPs, sole proprietorships, etc. Your business model influences everything, from daily operations to taxes and liability. 

Some standard forms of legal entities in Poland are as follows:

1. Limited Liability Company (LLC)

A Limited Liability Company or LLC is a legal business structure where the liability of its shareholders is limited to their capital contributions. It balances liability protection and managerial flexibility and is suitable for small and medium-sized businesses.

2. Joint-Stock Company

A Joint-Stock Company is a corporate business structure characterized by capital divided into freely transferable shares. The management board oversees the company, while the supervisory board ensures proper governance.

3. Limited Partnership

A Limited Partnership merges general partners with unlimited liability and limited partners with liability limited to their contributions. General partners handle the business and are personally responsible for its obligations. Limited partners provide capital but have limited liability, and their losses are restricted to their investments.

4. Registered Partnership

A Registered Partnership is a straightforward business structure where each partner has personal liability for the company's obligations. Partners collaborate to establish and run the business and share profits and liabilities equally unless specified in the partnership agreement.

5. Limited Joint-Stock Partnership

A Limited Joint-Stock Partnership combines aspects of limited partnerships and joint-stock companies. General partners handle the business and have unlimited liability. Meanwhile, limited partners invest capital and have limited liability.

6. Branch Office

A Branch Office is an extension of a foreign company; thus, it is not a separate legal entity. The parent company maintains legal responsibility for the operations and liabilities of a branch. It enables foreign businesses to expand internationally without creating a new company.

7. Sole Proprietorship

A Sole Proprietorship is a business type where a single individual owns and operates the business. They are personally responsible for all aspects of the business, including debts and obligations.

Documents Required for Company Formation in Poland

The following documents and details are crucial for starting a business in Poland:

1. Company Name:

Choose and provide the desired name for your company. The name must comply with Polish naming regulations.

2. Duration:

Specify the intended duration of your business.

3. Office Information:

Provide the company's registered office address in Poland. It can be a physical address or a virtual office, but it must be a valid and verifiable location.

4. Object of business activity:

Clearly define the primary purpose and scope of your company's activities.

5. Invested Share Capital:

State the amount of share capital the partners contribute to the company. It should match the minimum share capital requirement for the business structure.

6. Ownership Clause:

Prepare a document specifying whether company members can possess multiple within the company.

7. Initial Value and Number of Shares:

Mention the initial value and quantity of shares designated to each member.

8. IDs and Information of the Partners:

For partnership firms, each partner must provide either a Polish ID or a passport. They can use their passports or residency cards for identification if they do not have Polish IDs. You must also furnish relevant details about shareholders. It comprises the full names of all partners participating in the company and comprehensive details about their legal status, including whether they are Polish residents or foreign nationals.

What are the Requirements for Starting a Company in Poland?

Meeting the eligibility criteria and fulfilling specific requirements is crucial when setting up a company in Poland. Not only is ensuring compliance a legal obligation, but it is also essential for the smooth establishment and ongoing operations of your business. 

Here are the specific requirements for starting a company in Poland.

1. Minimum Capital:

You must deposit the required share capital to start a business in Poland. The required minimum capital varies depending on the type of business structure you choose. For instance,

• Limited Liability Companies must have a minimum capital of PLN 5,000. 
• Limited Joint-Stock Partnerships require a capital requirement of PLN 50,000.
• Joint Stock Companies in Poland must have at least PLN 100,000 in capital. 
• If you are considering a startup in Poland, there is a favorable option with a minimum authorized capital of just PLN 1.

2. Minimum Number of Directors:

You must have at least one director to oversee business operations.

3. Minimum Number of Shareholders:

Polish law mandates that at least one natural person must be appointed as a shareholder for a company. It validates that there is an identifiable individual with a stake in the business and contributes to its ownership and governance.

4. Shareholders Meeting:

Both commercial and joint stock companies are obligated to hold at least one annual shareholders meeting following the conclusion of the previous financial year. It must take place within 6 months after the financial year-end. 

It is important to note that representative offices, branch offices, and partnerships are exempt from this requirement, although the decision rests with the parent company.

5. Board Meeting:

All business entities registered in Poland must conduct board meetings following Polish legal regulations.

6. Corporate Tax:

Companies in Poland are subject to a standard tax rate of 19% on their gross corporate revenue.

7. Business Registry Requirements:

Registering the names of shareholders, directors, and management personnel in the National Court Register is mandatory.

8. Annual Statements:

Entities operating in Poland must file annual statements and detail their activities during the preceding financial year. You must submit these statements to the Registry Court to stay transparent and adhere to regulatory standards.

9. Financial Statements:

Compliance with Polish law also expects you to approve your financial statements and ensure that they align with the prescribed legal procedures. It ensures accurate and precise financial reporting for all registered companies in Poland.

How to Register a Company in Poland?

Registering a company in Poland is essential for entrepreneurs and businesses seeking to operate within the dynamic European market. Here is a step-by-step procedure to help you navigate the process:

1. Choose a Legal Structure:

Select the legal structure that aligns with your business goals and preferences. Poland offers various options, each with distinct advantages and requirements. Factors such as liability, ownership, and capital can help you determine the best fit for your enterprise. 

2. Sign Articles of Association:

Once you select the business structure, you must draft and sign the Articles of Association. The document outlines the company's structure, ownership, and key operational details. Further, it is mandated to get this document notarized. For a single-shareholder company, an incorporation instrument must also be signed.

3. Open a Bank Account:

You will need to contribute towards the company's share capital. It involves opening a bank account and depositing a specific amount of cash. However, contributions can also include transferring real property rights. It may involve land or movable property, such as vehicles, to the company, depending on the shareholders' agreement.

4. Appoint Corporate Bodies:

Designating corporate bodies is essential to managing the company and complying with legal obligations. It is fundamental to establish a business entity, maintain proper governance, and adhere to company laws. You can proceed with the process in two ways:

• General Shareholders' Meeting:

Shareholders hold a meeting to decide on the management board's composition collectively. They discuss and vote on the individuals they believe are best suited for these critical roles. It is important to note that the minutes of this meeting do not require notarial deeds or written forms.

• Shareholder Votes:

Individual shareholders can vote to appoint members to the management board if the Articles of Association allow it. It offers flexibility, especially when shareholders have differing opinions on board composition.

5. Files for Registration:

You must officially register your business with the stipulated minimum capital in the National Court Register (KRS), also known as the Company Register. Here are the general steps for registering a company in Poland:

• Complete an application for company registration at the Registry Court of KRS.
• Provide all necessary documents, including the Articles of Association, proof of share capital deposit, and any other required paperwork.

6. Obtain Necessary Permits:

The final step is to secure any additional permits or registrations required to conduct specific business activities. Relevant permits and approvals may include identification numbers like NIP (Tax Identification Number) or REGON (National Business Registry Number) and any special permissions needed for your particular industry or services.

Timeline for Poland Company Formation

The timeline for opening a business relies on various factors, including the business type and the intricacies of the registration process. Consequently, there is no fixed or guaranteed duration for company formation in Poland. 

Here is a general overview of a timeline for company formation in Poland.

 1. Preparation of Documents

Gathering the documents is the first step to initiate registration. The duration of document preparation can fluctuate, ranging from a few days to several weeks. Factors like the complexity of the business and the responsiveness of the involved parties can delay the process.

2. Notarization and Notarial Deed

Documents, like articles of association, may demand notarization. The timeline for notarization may vary, contingent on notary availability, and is accomplished within a few days.

3. Bank Account Opening

Establishing a bank account for your company is a pivotal registration step. The time required for this stage depends on the chosen bank and the completeness of the documentation submitted. Generally, it can take a few days to a couple of weeks.

4. Registration with the National Court Register

Your company must be registered with the KRS, the central registry for commercial entities in Poland. The registration timeline can alter but usually spans around two to three weeks. It is ideal to anticipate potential delays if any issues or additional requirements emerge during registration.

5. Tax Registration

Once you register your company with the KRS, the next crucial step is tax registration. It typically takes a few days to a couple of weeks to finalize.

Related Read: The Cost of Hiring a New Employee: A Comprehensive Guide

Setting up a Company vs. Partnering with an Employer of Record in Poland

Poland boasts a growing economy within the European Union and provides access to a large consumer market and a skilled workforce. However, setting up a company can present several hurdles. You must navigate complex legal requirements, understand local labor laws, and comply with tax regulations. In addition, language barriers and bureaucratic procedures can complicate the setup process.

An Employer Of Record can be your trusted partner to simplify the complexities of international expansion.

Listed below are some primary differences between setting up a business in Poland and using an Employer of Record to help you make an informed decision:

While setting up a business in Poland offers more control and potentially greater long-term flexibility, it comes with higher capital requirements and increased liabilities. Leveraging an EOR promises a faster and more cost-effective entry into the market without setting up an entity.

Hire Talent in Poland Compliantly

Setting up a company in Poland will be an attractive option, primarily because of the significant economic growth and development in recent years. However, navigating regulations and compliance during the company formation can be daunting. 

With Skuad’s unified platform, you can hire and onboard employees and contractors without setting up a company in Poland. Skuad manages all aspects of employment, including payroll, benefits, and tax obligations, and ensures that your operations remain fully compliant with employment laws in the country you hire in, including Poland.

Want to know more? Talk to our experts today! 

FAQs

Q1. How much does it cost to set up a company in Poland?

The cost of starting a business in Poland varies depending on the structure and activity. For instance, an LLC company requires an initial capital of 5,000 PLN. Following the minimum investment, you must pay for company registration at the National Court Register. It amounts to 600 PLN to cover the expenses in court and includes 100 PLN to announce the new company. There may be additional associated costs for VAT registration and other fees.

Q2. Can a US citizen start a business in Poland?

Yes, citizens from the United States can run a business or set up a company in Poland. The choice of the business structure depends on their preference and the terms on which they reside in the country.

Q3. How much is company income tax in Poland?

Poland offers a below-average corporate income tax rate of 19% at present.

Q4. How long does it take to set up a company in Poland?

Starting a business in Poland can take about 1 to 5 days. However, the duration may vary due to the registration process and approvals and can delay the process.