• Hypermotion

Cities of Innovation: Warsaw

How to set up a business: a quickfire guide

What are my options?

In Poland, a limited liability company (Polish: spółka z ograniczoną odpowiedzialnością, sp. z o.o.; or “LLC”) is the most popular and common legal form for start-ups and SMEs.

 

The minimum share capital for a Polish LLC is PLN 5,000.00 (approx. €1,160), where the nominal value of each share cannot be lower than PLN 50.00 (approx. €11.60).

 

LLCs can be established either in a traditional way, i.e. by signing a notarial deed or via the Internet – by using a special dedicated portal called “S24”.

 

Depending on how the company is established, the capital must be paid in before the motion to register the LLC is submitted (traditional way) or within seven days after the company is registered (online registration). Once paid in, the funds are the LLC’s property and can be spent in any way compliant with the company’s Articles of Association.

What do I need to set up a company?

Regardless of how the company is established, the following steps and documents are required:

(i) execution of the Articles of Association (in the form of a Polish notarial deed or using a special template when registering the company online); (ii) opening a bank account (in practice it may be done after the company is established); (iii) preparing and signing documents such as a list of shareholders, list of entities/people entitled to appoint members of the management board etc.; and (iv) filing in the commercial register regarding the formation.

 

The average time needed to establish and register a company in Poland is around one month (or more) when the LLC is established in a traditional way, or one to two working days if registering the LLC online.

 

Depending on how the company is created, the costs and timing for its establishment differ. Entrepreneurs wishing to register their LLC in a traditional way should be prepared for notarial deed costs varying from PLN 160 (approx. €37) to a few thousand PLN (depending on the share capital). Other than that, the court fees are PLN 600 (approx. €139). If they set up the
LLC via the Internet, entrepreneurs will avoid the notarial fees and the court fees which amount to PLN 350 (approx. €81).

 

When it comes to the formal set-up requirements, generally they are the same regardless of whether the LLC is established by a domestic or foreign entrepreneur. However, there are categories of foreigners (e.g. from outside the EU), who are subject to additional restrictions when setting up other types of companies in Poland. Additional requirements with respect to ownership/perpetual usufruct of real estate in Poland may apply.

 

As practice shows, sometimes logistics, signing documents in time, opening a bank account etc., create difficulties for foreigners. Using the S24 portal to establish a company is getting more and more popular for foreigners, as it does not require them to be in Poland at the time of establishment.

 

Generally, it is necessary to conduct full bookkeeping and submit financial statements to the registry court each year.

 

The fact of registering an LLC in the registry court must be noted at the tax office as soon as possible, and a request for issuance of a tax identification code/tax number/VAT number must be submitted.

 

As of 13 October 2019, the Polish Ultimate Beneficial Owner Register will be created, and every LLC will be obliged to submit relevant information. Currently, information related to the ultimate beneficial owner is only required with respect to e.g. financial activities (opening a bank account etc).

Tax rates

Civil transactions tax differs depending on the share capital of the LLC. The minimum share capital of PLN 5,000.00 will result in a tax charge of PLN 20-25 (around €5). The applicable corporate income tax rate is 19%. Exemptions and double-taxation issues with respect to dividends should be considered.

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