How to Set Up a Company in Poland: A Guide for Entrepreneurs

Starting a business in Poland offers numerous opportunities due to its strategic location within Europe, growing economy, and access to the European Union’s single market. Whether you’re a foreign investor or a local entrepreneur, understanding the legal and administrative steps to establish a company is crucial. Below is a step-by-step guide to help you navigate the process.

1. Choose the Right Legal Structure

The first step in setting up a company in Poland is selecting the appropriate legal structure. The most common types include:

• Limited Liability Company (Sp. z o.o.): This is the most popular form of business entity for foreign investors due to its simplicity and limited liability. Shareholders are only liable for the company’s obligations up to the value of their contributions.
• Joint-stock Company (S.A.): Suitable for larger businesses, especially those planning to be publicly listed. It has higher capital requirements and more complex governance structures.
• Sole Proprietorship (Jednoosobowa działalność gospodarcza): Ideal for small businesses or freelancers, where one individual is the owner and responsible for the business.
• Partnerships: There are several types of partnerships, such as general partnerships and limited partnerships, depending on the business’s size and scope.

2. Register the Company

Once you’ve chosen the legal structure, the next step is to register your company with the relevant authorities. Most businesses in Poland are registered with the National Court Register (KRS).

• Limited Liability Companies (Sp. z o.o.): Registration can be done online through the eKRS system or by filing paper documents at the relevant district court.
• Sole Proprietorships and Partnerships: Registration is done through the Central Registration and Information on Business (CEIDG), which is free of charge and can be completed online.

Key documents required for registration include:

• The company’s articles of association.
• Information about the company’s shareholders and directors.
• Proof of payment for the registration fee (for Sp. z o.o. and S.A.).

3. Share Capital

For Limited Liability Companies (Sp. z o.o.), the minimum share capital requirement is PLN 5,000. The capital must be deposited in a company bank account before registration is finalized.

For Joint-stock Companies (S.A.), the minimum share capital is PLN 100,000.

4. Obtain a Tax Identification Number (NIP) and REGON

Once your company is registered with the KRS or CEIDG, it will automatically receive a Tax Identification Number (NIP) and a Business Statistical Number (REGON) from the relevant tax office and statistical office. These are essential for carrying out tax reporting and other business activities in Poland.

5. Register for VAT (Optional)

Depending on the nature of your business, you may be required or choose to register for VAT. In Poland, VAT registration is mandatory if your annual revenue exceeds PLN 200,000. Even if your revenue is below this threshold, you can voluntarily register as a VAT payer to reclaim VAT on purchases.

The standard VAT rate in Poland is 23%, with reduced rates of 8% and 5% for certain goods and services.

6. Open a Bank Account

A Polish company must have a local bank account to conduct business. Opening a corporate bank account usually requires the company’s registration documents, proof of the shareholders’ identities, and the company’s tax identification number (NIP).

7. Appoint a Management Board

For companies like Sp. z o.o. or S.A., a management board must be appointed. The board oversees the daily operations of the company and is responsible for making decisions in the interest of the business. At least one board member must reside in the European Union, EEA, or Switzerland, or appoint a representative in Poland.

8. Compliance and Reporting Requirements

Once your company is established, you are obligated to fulfill various compliance requirements, including:

• Annual Financial Reporting: Polish law requires companies to submit their financial statements to the National Court Register (KRS). For some entities, an audit may be required.
• Corporate Income Tax (CIT): The standard corporate income tax rate is 19%, but small taxpayers with annual revenues below EUR 2 million may benefit from a reduced rate of 9%.
• Social Security Contributions: If you hire employees, you must register them with the Social Insurance Institution (ZUS) and pay the relevant social security contributions.

9. Hire Employees (If Needed)

If your company plans to hire employees, you must comply with Polish labor laws. This includes offering contracts that meet the requirements set out in the Labor Code, registering employees with ZUS, and ensuring they receive appropriate health and safety training.

10. Seek Professional Legal and Accounting Assistance

Navigating the legal and administrative steps to establish a company in Poland can be complex, particularly for foreign investors. It’s advisable to seek the assistance of a qualified lawyer and accountant who can help ensure compliance with Polish law and regulations.

Conclusion

Setting up a company in Poland can be a rewarding venture, but it requires careful planning and understanding of the legal and administrative landscape. By selecting the right legal structure, ensuring proper registration, and complying with tax and reporting requirements, you can position your business for success in the Polish market.

If you need help navigating the process of establishing your business in Poland, feel free to contact us for professional legal support tailored to your specific needs. We are here to assist you every step of the way.