If you do not have Polish citizenship and you want to run business in Poland, you may choose the form that it is the most suitable for you but you should remember about meeting some conditions. Please take a while to read below article to know more about the rules of establishing a company in Poland. I am sure it will be helpful for you as I have gathered all information in one source just for your convenience.
Special conditions of establishing companies by foreigners
In Poland, you can establish a company on the same rules as Polish citizens only if you meet some conditions:
- you are a citizen of a Member State of the European Union or of the European Economic Area,
- you are a citizen of another country and hold, among other things:
- permanent residence permit;
- a residence permit for a long-term resident of the European Union;
- temporary residence permit granted in connection with, inter alia, family reunion legally residing in Poland, studying
- refugee status;
- subsidiary protection;
- a permit for residence for humanitarian reasons or a permit for tolerated stay;
- a temporary residence permit and are married to a Polish citizen residing on the territory of the Republic of Poland;
- a temporary residence permit for the purpose of conducting business activity, granted in connection with the continuation of business activity already conducted on the basis of an entry in the Central Register and Information on Business Activity;
- temporary protection in Poland;
- a valid Polish Card.
If you do not meet any of the above conditions you can establish only some kinds of companies that are in Poland and they are as follows:
- companies – limited liability company and joint-stock company;
- partnerships – limited partnership, limited joiny-stock partnership.
Two remaining partnerships i.e. registered partnership and professional partnership may be established only by the foreigners that meet that above-mentioned conditions.
You should also remember that some activities require registration in a specific legal form or reserve the form to persons with specific competences. An example is a professional partnership, where only members of the so-called liberal professions may be partners: advocate, pharmacist, architect, construction engineer, auditor, insurance broker, tax advisor, securities broker, investment advisor, accountant, physician, dentist, veterinary surgeon, notary, nurse, midwife, legal adviser, patent attorney, property appraiser and sworn translator. Sometimes the law specifies the type of company that must be registered in order to carry out a given activity. However, these are exceptional situations and are limited to the financial sector, such as the activities of banks or insurance companies.
Differences between companies in Polish law
You should choose the company that will satisfy all your needs regarding running business activity. For example when you start your business and it is small at the beginning, the most preferable may be registered partnership or limited partnership but if your business is growing rapidly you may be more interested in the limited liability that is offered by the companies. Companies are not recommmended at the beginning because you should pay two types of taxes. The first one – personal income tax as the shareholder and the second one is a corporate tax paid by the company itself. This double taxes are often avoided by the persons that want to start business activity and the partnership should be the first choice in most of the cases.
You will find the differences between the different types of companies in the table below.
Partnerships:
| Type of the company | Registered partnership | Professional partnership | Limited partnership | Limited joint-stock partnership | ||||
| Minimum number of founders | Minimum two partners (all of them are fully liabie, subisdiary with the partnership) | Minimum two partners (generally all of them are fully liabie, subisdiary with the partnership but the conditions of liability may be modified by the partners in the contract) | Minimum two partners – one general partner (liable with all their assets) and one limited partner (liable with the amount specified in the contract) | Minimum two partners including one general partner (liable with all their assets) and one shareholder | ||||
| Instruments of incorporation | Contract in writing, unless the partner’s contribution is real estate (then notarial deed) or enterprise (contract with notarially authenticated signatures) | Contract in writing, unless the partner’s contribution is real estate (then notarial deed) or enterprise (contract with notarially authenticated signatures) | Agreement in the form of a notarial deed. | Articles of association in the form of a notarial deed | ||||
| Minimum amount of share capital | None, there are only contributions of the partners | None, there are only contributions of the partners | None, there are only contributions of the partners |
PLN 50,000 The value of shares is at least PLN 0.01 | ||||
| Accounting | Simplified if the partners are natural persons and last year’s income did not exceed EUR 2 million. Full accounts in other cases. | Simplified if the partners are natural persons and last year’s income did not exceed EUR 2 million. Full accounts in other cases. | Full | Full | ||||
| Taxes payment | The partnership does not have legal personality. Partners are income tax payers. | The partnership does not have legal personality. Partners are income tax payers. | The partnership does not have legal personality. Partners are income tax payers. | Corporate income tax – 19% or 15% (preferential for new companies). Additionally, the dividend is taxed at the rate of 19%. | ||||
| Liability | Joint and several liability of all partners (including partnership’s and partners’ personal property) | Responsibility for commitments is shared between the partners. However, the articles of association may identify those partners who will be fully liable | The partnership is primarily liable with its own assets. At least one general partner shall be liable with the entire property. At least one limited partner is liable up to the amount specified in the contract. | The partnership is primarily liable with its own assets. A general partner shall be personally liable with all his assets, jointly with the other general partners. A shareholder shall not be liable for the company’s liabilities with his assets. |
Companies:
| Type of company | Limited liability company | Joint stock company | ||
| Minimum number of founders | Minimum two partners | Minimum one founder. A single-member limited liability company may not be the founder. | ||
| Instruments of incorporation | Agreement in the form of a notarial deed (founding deed for a single- member limited liability company). | Articles of association in the form of a notarial deed | ||
| Minimum amount of share capital | PLN 5,000.
The value of the share is at least PLN 50 |
PLN 100,000 The value of share is at least 0,01 | ||
| Accounting | Full | Full | ||
| Taxes payment | Corporate income tax – 19% or 15% (preferential for new companies). Additionally, the dividend is taxed at the rate of 19%. | Corporate income tax – 19% or 15% (preferential for new companies). Additionally, the dividend is taxed at the rate of 19%. | ||
| Organs | 1) general meeting of shareholders; 2) management board; 3) supervisory board and/or audit committee or both in the case share capital exceeds PLN 500,000 and the number of shareholders exceeds 25 | 1) general meeting of shareholders; 2) management board; 3) supervisory board | ||
| Representation | The company is represented by its Management Board. | The company is be represented by a Management Board. | ||
| Liability | The company is primarily liable with its own assets. Members of the Management Board are jointly and severally liable for the company’s liabilities with all their assets. | The company is liable with its own assets. The shareholders bear only the risk of losing the shares of the company |
If you still have questions regarding establishing business in Poland or need help to start one, please feel free to write to me on the following email address: kontakt@patrycjabadek.com. My name is Patrycja Bądek and I am an attorney-at-law and a partner in Cracovian law office, providing services for entrepreneurs.
