Set Up Business in Poland
Poland Expansion Guide
Global Upside helps companies set up, hire, and operate in Poland. Set up a legal entity quickly and easily with our solutions for branch, subsidiary, and rep office. Looking for an alternative to permanent establishment? Hire and pay employees in Poland without a legal entity by using our PEO & employer of record services. Once your business is set up, our teams can support with recruitment and staffing, human resources, employee benefits, payroll, accounting, and tax.
Capital City
Warsaw
Currency
Polish złoty (zł)
Language
Polish
Government
Republic
Country Overview
Poland, located in Central Europe, has a population of nearly 38.5 million people. Poland is the fifth most populous member state of the European Union. The country’s business viability has grown substantially due to the integration of global value chains. The Polish government’s push toward a responsible development plan, private R&D spending, research quality, and university-industry collaboration have also been instrumental in improving Poland’s capacity to innovate and embrace new technologies to develop sustainable industries.
- Poland is rich in natural resources and the primary minerals produced are zinc, sulfur, lead, coal, and copper.
- The main export items are automatic data-processing machines, seats, cars, and parts of motor vehicles.
- Poland majorly imports petroleum oils, phones, and medicament.
Options for setting up a legal entity in Poland include:
Limited Liability Company (Spółka z ograniczoną odpowiedzialnością/sp. z o.o.)
A limited liability company is the most common form of legal entity set-up in Poland. The minimum capital requirement is PLN 5000. The investors are not responsible for the firm’s obligations, however, the management body is liable for the performance of the company and can be held accountable by the firm’s lenders or creditors. It is important for the LLC to pay both corporate income tax and VAT in Poland.
Joint-Stock Company (Spółka akcyjna/SA)
A joint-stock company is a common form of set-up for large-size businesses. The minimum capital requirement is PLN 10,000, 25% of which must be paid prior to incorporation. The stockholders are not accountable for the company’s obligations. Joint-stock companies must pay both corporate income tax and value-added tax.
Registered Partnership (Spółka jawna/sp. j)
A registered partnership is a type of set-up that requires at least two people to establish. The liabilities and profits are equally shared by all the partners.
Limited Partnership (Spółka komandytowa/sp. k.)
A limited partnership is a type of setup consisting of a general partner and a limited partner. The general partner manages the business and has unlimited personal liability for the debts and obligations of the limited partnership. The limited partner has limited liability but cannot participate in management. There is no minimum capital requirement.
Professional Partnership (Spółka partnerska/sp. p.)
A professional partnership is a type of set-up in which each partner has the individual right to administer the ownership. The partners are not individually liable for any obligations of the association unless stated otherwise in the articles of partnership.
Limited Partnership by Shares (Spółka komandytowo-akcyjna/S.K.A.)
A limited partnership by shares is a type of set-up that typically involves two partners – the general partner, who has unlimited liability, and the shareholder, who provides the majority of the funding but has limited liability. The minimum capital requirement is PLN 50,000.
Any foreign investor interested in opening a branch in Poland must abide by the guidelines established by the National Court Register Act and the Freedom of Business Activity Act. That said, any foreign company establishing a legal entity in Poland will receive the same treatment as a local company.
4. Representative Office (przedstawicielstwo)
The set-up process for a representative office is governed by the Freedom of Business Activity Act. A representative office can be established without a legal document from the Ministry of Economy. The only legal permit required is enrollment in the representative office’s record, which is maintained by the Polish ministry.
5. Sole Proprietorship (indywidualna działalność gospodarcza)
A sole proprietorship is the simplest form of establishment. The shareholders in a sole proprietorship and exposed to unlimited liability.
It takes around three to four weeks to establish a legal entity set up in Poland.
There are three standard forms of employment contracts in Poland:
1) Employment contract for a trial period – the trial period has a duration of 3 months, following which a contract can be converted to either definite or indefinite.
2) Employment contract for a definite period – the indefinite period has a duration of 33 months. It is viable that 3 contracts can be terminated consecutively.
3) Employment contract for an indefinite period – the indefinite period has a duration of over 33 months or is the 4th consecutive employment agreement.
According to the Polish employment law, the following information is required on all employment contracts:
- Personal details of both the parties
- Execution date
- Contract type
- Start date
- Job location
- Type of agreed work/position
- Remuneration
- Other specific components payable in addition to the base salary
- Working time status of an employee (i.e. full-time/part-time)
Employees are entitled to the following 13 paid public holidays:
- Jan. 1: New Year’s Day
- Jan. 6: Epiphany
- Easter Sunday and Monday
- May 1: Labor Day
- May 3: Constitution Day
- 1st day of Whitsun Holidays
- Corpus Christi
- Aug. 15: St. Mary’s Ascension Day
- Nov. 1: All Saints’ Day
- Nov. 11: Independence Day
- Dec. 25 and Dec. 26: Christmas
In most cases, payroll frequency is monthly. The payroll process depends on the employment bond. If the salary date falls on a holiday, the payment must be completed on a prior working day. All employers must provide employees with payslips that include all relevant payment details.
Accounting standards in Poland are set in accordance with the International Financial Reporting Standards (IFRS) or the Polish GAAP. Financial statements are required to be composed annually.
Corporate Tax
The tax rate in Poland is 19%. However, a lower rate of 9% may be available to small businesses.
Value Added Tax (VAT)
The standard VAT rate in Poland is 23%. A reduced rate of 5-8% exists for a few specific items.
The General Data Protection Regulation (GDPR) came into effect on May 25, 2018. GDPR guidelines state that employees have the right to know how their data is being used. Additional guidelines on the use of employee and consumer data are established by the Polish Labor Code and the Personal Data Protection Act.
Anti-Bribery & Anti-Corruption Law
Anti-bribery law in Poland is enforced in accordance with the Polish Penal Code (PC).
1. Domestic Bribery – (private to public)
For Officials:
i) Imprisonment for a minimum of 6 months to a maximum of 12 years
ii) A minimum fine of PLN 8 million
For Businesses:
i) Seizure of all financial benefits resulting from bribe
ii) Suspension of all forms of marketing and selling activities for 5 years
iii) Fine ranging from PLN 1,000 to PLN 5 million, or 3% of the annual business revenue in the year of the offense
iv) Publication of the judgment made by the court
2. Domestic Bribery – (private to private)
For Individuals:
i) Imprisonment for 3 months to 8 years
ii) Minimum fine of PLN 1.08 million
For Legal Entities:
i) Seizure of all financial benefits resulting from bribe
ii) Suspension of all forms of marketing and selling activities for 5 years
iii) Fine ranging from PLN 1,000 to PLN 5 million, or 3% of the annual business revenue in the year of the offense
iv) Publication of the judgment made by the court
