Setting up a business in Poland

As the 8th largest economy in the European Union, Poland has been attracting many expatriates over the years, especially foreign investors. Indeed, the country is deemed to be a haven for investment, both from Europe and the rest of the world. Located in the heart of Europe, the country is a gateway towards Germany, Czech Republic, Slovakia, Lithuania, Ukraine, Belarus, and Russia. So if you intend to set up a business here, you will enjoy a vast business-friendly environment.

Types of companies in Poland

There are several types of business forms and company types to choose from depending on your start up capital, the number of people you want involved, your company's financial liability and other factors.

Here are the main business types of companies you can set up in Poland.

Self-employment/sole proprietorship/sole trader. Meant for the operation of a small business (tutoring, craftsmanship, personal training, consulting, etc.), this form of ownership is the simplest to set up and also the most common among Polish citizens. However, it is also the one that requires the highest form of liability from its founder. There is no minimum capital requirement. Note that the company's owner will be fully liable for their financial obligations with both company and personal property. Tax-wise, entrepreneurs will be required to submit PIT (Personal Income Tax) declarations.

Partnerships. A partnership is a company set up by at least two individuals (or legal entities). They come in many forms (general, professional, civil, limited, etc.) and differ in the specifics of liability. For instance, in a general partnership, all partners are equally liable for debts and obligations; while in a limited partnership, one partner is liable without limitation and others are not. There is no minimum capital requirement and the founders will be required to pay Personal Income Tax or Corporate Income Tax.

Limited liability company (Sploka zoograniczona odpowiedzialnoscia or Sp. z.o.o). This type of establishment is most suited for small and medium-sized businesses and the company's founders are liable only to the amount of capital invested. There is a minimum capital requirement: 5,000 PLN. Taxation is performed in the form of Corporate Income Tax.

Joint stock company (Spolka akcyjna). This is another form of a limited liability company and its founders are only liable to the extent of their invested capital. The difference is that it is a public company that can be listed on the Stock Exchange. Setting up a joint stock company requires a larger investment ' the minimum capital requirement is set at 100,000 PLN.

Procedures to set up a company in Poland

If you come from a country that is an EU member state, you will be able to register your business following the same procedures as a Polish citizen. If you are a resident of a non-EU country, certain restrictions may apply.

If you have a registered company in another country (whether an EU member state or not), you have the option of opening a branch of your company based on the cross-border provision of services agreement.

The first step in registering a company in Poland will be submitting an application to Pole Registry of Commerce. The following decisions will need to be made:

• Decide on the scope of your intended business activity and choose PKD (Polish Classification of Activity) codes
• Choose your preferred form of taxation and PIT payment schedule (monthly or quarterly)
• Decide whether you need to register for VAT
• Choose the name for your company and a form of accounting
• Choose a starting date for your business activities, etc.

Note that registration fees apply. Once your application is approved, you will receive a confirmation letter.

The second step is notarising the company's constitution at the National Court Register

(Krajowy Rejestr Sadowy) or CEIDG. Fees apply and the following documents will also be required:

• A written registration application
• The company's constitution and statutes
• Directors' signatures
• A signed declaration by all members, stating that the initial capital has been totally released, along with a confirmation letter issued by a bank or investment institution.

Note that you can complete the registration process in person or submit your application online or by phone. All in all, the procedures can take up to four weeks.

Thereafter, you are required to apply for REGION registration at the Glowny Urzad Statystyczny, which is the National Statistics Agency. It is an essential step before you are allowed to open a bank account with a commercial bank where you will deposit the company's capital. Other documents such as the directors' and partners' details, etc., may also be requested.

Once all these steps have been accomplished, you will have to register the company at the National Tax Office, get a NIP number (tax identification number) and a VAT number (if applicable). You will then have to request a ZUS, that is a matriculation number for Social Security.

New opportunities for start-ups

In order to promote business activity in the country, Poland has introduced a number of helpful measures within the framework of the Constitution of Business:

• If you are planning on starting a small business, you can benefit from the non-registered activity clause and skip the registration process for your business
• If your small business has been registered, you can benefit from ZUS relief ' in this case you will only be paying health insurance for 6 months.

Support

The Pole government has set up the Polish Information and Foreign Investment Agency so as to provide assistance and support to foreigners wishing to set up their business in the country. Feel free to contact this agency if you need any information or help in relating procedures.

Useful links:

National Court Register
National Statistics Agency
Polish Information and Foreign Investment Agency