Expand Business in Poland

Global Upside assist you to expand business in Poland by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution to help you establish & grow business and optimize your operations, all while maintaining compliance with Polish laws and regulations.

The hiring and incorporation processes in Poland are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies this process and lifts the compliance burden for your business. Our teams have the experience and expertise required to help you establish a legal entity in Poland. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Warsaw

Currency

Polish złoty (zł)

Language

Polish

Government

Republic

Country Overview

The World Bank identifies Poland as a country with a high economy which is a free market and investors have a broad array of business possibilities here. The most important factor is the location of Poland which makes it extremely advantageous to open a company. Many local experts can be hired by foreign business owners. As per data, Poland –

  • Is the 22nd largest economy in the world with regards to the GDP.
  • Is the 10th largest economy in Europe in reference to the GDP.
  • Has low business start-up and labor costs compared to countries in Western Europe.
  • Ranks 40th as the world’s business-friendly nations.

Covid-19 Update

Poland has been under a country-wide lockdown since 12 March to keep itself safe from the coronavirus outbreak. The Polish government has taken this protective step of social isolation and limited the course of common everyday activities, excluding essential services like grocery stores, medical stores and pharmacies. We, at Global Upside, are consistently working on ways to keep your business expanding by letting your employees telework and be productive.

Legal Entity Setup

According to the CCC, also known as the Commercial Companies Code, there are two kinds of establishments that can be set up in Poland.
Commercial companies can either be – i) Corporations or ii) Partnerships. The kinds of establishments are –

1. Commercial set-ups

Limited Liability Company (Spółka z ograniczoną odpowiedzialnością/ sp. z o.o.)

Limited Liability Company is the most common kind of legal entity set-up and can be established for all medium and small-sized companies. The capital required is PLN 5000 and the authorized shares need to be equally divided into shares or unequal minimum amount. The investors are not responsible for the firm’s obligations; however, the management body is liable with regards to the firm’s lenders or creditors. It is important for the LLC to pay both corporate income tax and VAT here.

Joint-stock company (Spółka akcyjna/ SA)

Joint-stock company is a kind of establishment where the capital required is PLN 100,00 and before the incorporation a minimum of 25% must be paid. It is a common form of set-up for large-size businesses. The stockholders are not accountable for the company’s obligations, however, just like the LLC, they also must pay both the corporate income tax as well as the VAT.

2. Partnership set-ups

Registered Partnership (Spółka jawna/ sp. j)

Registered Partnership is the classic form of set-up which is perfect for smaller companies where there are at least two partners. The liabilities and profits are equally shared by all the partners.

Limited Partnership (Spółka komandytowa/ sp. k.)

Limited Partnership is a form of an establishment which is an amalgamation of a limited liability company and a registered partnership. Here, one of the stockholders is liable for all forms of obligations. There is no requirement for a minimum capital amount.

Professional Partnership (Spółka partnerska/ sp. p.)

Professional Partnership is a new form of an establishment which is based on the American-Delware version. Here, each partner has their individual rights to administer the ownership. Furthermore, the partners are not individually liable for any kind of obligations of the association unless stated otherwise in the articles of partnership.

Limited Partnership by Shares (Spółka komandytowo-akcyjna/ S.K.A.)

Limited Partnership by Shares is an innovation in the arena of an official business arrangement. It has been established on the elements of a joint-stock company and a limited partnership. The only form of establishment which is obliged to fulfill the minimum share capital of PLN 50,000. In this kind of a set-up, there are usually two partners – one who has unlimited liabilities and is known as the general partner and the other who has limited liabilities who is the shareholder.

3. Branch (oddział)

Any foreign investor who wants to open a branch of their business needs to abide by the procedures that are regulated by the Act on the National Court Register and the Act on the Freedom of Business Activity. That said, any foreign company that wants to establish a legal entity set-up here will be treated in the same way a local company is – this is the principle of reciprocity.

4. Representative Office (przedstawicielstwo)

Representative Office is a form of establishment where the process is governed by the Act on the Freedom of Business Activity. This kind of set-up can be established without a legal document from the Ministry of Economy and the only legal permit required is enrollment in the representative office’s record which is maintained by the ministry.

5. Sole Proprietorship (indywidualna działalność gospodarcza)

the simplest form of establishment with maximum degree of liabilities for the shareholders.

It takes at least 30 days to establish a legal entity set up in Poland, depending on the kind of establishment required.

Human Resources

There are three standard forms of employment contracts in Poland –

i) agreement for trail period – has a time duration of 3 months, following which a contract can be converted to either definite or indefinite.
ii) agreement for definite period – has a time duration of 33 months and it is viable that 3 contracts can be terminated consecutively.
iii) agreement for an indefinite period – has a time duration that is over 33 months or is the 4th consecutive employment agreement.

According to the Polish employment laws, the following information is required –

  • Name and address of both the employer and the employee
  • Type of employment bond
  • The starting and termination dates
  • Job description including location
  • Remuneration
  • working hours of duty

For further information, kindly visit the website and register yourself.

Payroll

The payroll frequency here is monthly, yet the process depends on the employment bond. If the salary date falls on a holiday, the payment needs to be completed on a prior working day. All employers must provide a pay slip with all relevant details.

Accounting

All accounting standards in Poland need to oblige the International Financial Reporting Standards (IFRS) or the Polish GAAP. The financial statements are required to be composed annually.

Taxation

Corporate Tax

The income tax rate is 19%. However, a lower rate of income tax is applicable at 9% to small companies or taxpayers for income other than capital profits.

VAT

The standard VAT rate here is 23% and there are reduced rates of 8 and 5% on a few supply items.

Data Privacy/ GDPR

The General Data Protection Regulation came into play on 25 May 2018 and states that all accountable data need to be complying to the processing of the relevant personal data. Additionally, in matters that are not governed by the Polish Labor Code, the rules in the Personal Data Protection Act apply.

Anti-Bribery & Anti-Corruption Law

The Polish Penal Code (PC) administers bribery of public officials, under the Articles 228 – 230a. Meanwhile, managerial or private bribery is governed under the Article 296a.

1. Domestic bribery – (private to public)

For officials

i) Imprisonment of a minimum of 6 months to 8 or 12 years.

ii) A fine of a minimum amount of PLN08 million.

For legal entities

i) Confiscation of all kinds of financial benefits of the entity.

ii) Prohibition from all forms of marketing and selling activities for 5 years.

ii) Either a fine that ranges from PLN 1,000 to PLN 5 million.

iii) Or 3% revenue in the year of 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) A monetary fine of a minimum of PLN 1.08 million.

For legal entities

i) Seizure of all financial benefits made by the entity.

ii) Prohibition from all forms of marketing activities for 5 years

ii) Either a fine that ranges from PLN 1,000 to PLN 5 million.

iii) Or 3% revenue in the year of offense

iv) Publication of the judgment made by the court.