Company Formation in Poland
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Poland Company Formation
Foreign persons (individuals, legal persons) from Member States (and another country being a party to the agreement on the European Economic Arena) may undertake and pursue economic activity in the territory of Republic of Poland on the same terms as Polish citizens.
The most important types of economic activity are:
- Enterprises run by a natural person; these are small businesses run by private individuals
- Partnerships established under the regulations of the Polish Civil Code
- Commercial companies, established by natural or legal persons under the regulations of the Polish Code of Commercial Companies, including:
- partnerships (partnership, general partnership, limited partnership, limited joint-stock partnership)
-Corporations (joint-stock company and limited liability company)
You can establish branch or agency as well (please see below).
Foreign persons other than those mentioned above have the right to undertake and pursue economic activity only in the form of a limited partnership, limited joint-stock partnership, limited liability company and joint-stock company, as well as to join such companies and take up or acquire their shares or stocks, unless international agreements provide otherwise.
The most common form for foreigners is limited liability company (LLC). There are a several steps to set it up:
1) have the agreement notarized.
For a limited liability company, the notary deed should contain the following (among others):
- Business name and company seat
- Amount of share capital
- Whether a shareholder is entitled to one or more shares
- Number and nominal value of shares held by individual shareholders
- Names of Board of Management members and how the company is represented
- ∑Duration of the company (unlimited or limited)
2) registration with the Register of Entrepreneurs.
3) after the registration with the Register of Entrepreneurs, You should submit NIP-8 declaration and register for VAT. Applying for VAT number, You should show the rental agreement (or other document proving legal title to the property where the company has its registered seat).
4) If You hire people, You need to submit the application to the Social Insurance Institution.
Regarding the joint-stock companies, there are some others information to include (among others Amount of share capital, capital paid-in before registration, the nominal value of the shares and their number, the indication whether they are registered shares or bearer shares).
Branches and agencies
A branch can be established to carry out business activity in Poland exclusively within the structure of activities conveyed by the parent company. A polish branch business name should be the name of the foreign company plus addition "branch in Poland". Importantly, you will need to appoint a person authorised to represent this branch.
To have a branch in Poland, it is required to file an application form to the National Court Register (with the articles and relevant documents). Foreign companies are not limited to the establishment of only one branch either
Foreign companies that have their own branches in Poland will need to maintain separate accounting for the branch that is written in the Polish language.
Additionally, a branch of a foreign parent may be set-up exclusively to perform business activity such as advertising or promotion.
To establish a branch in Poland, you will be required to submit an enrolment form to the register kept by the Polish Minister of Economy. The application form must be made in the Polish language.
A business name is created by the name of the foreign company with the suffix Agency in Poland. A polish agency will maintain its own accounts, separate from those of the parent company.
By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.
The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:
- Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
- Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
- Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
- Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
Characteristics of an offshore company:
- Memorandum and Articles of Association
- Certificate of Incorporation
- Registered Office/Agent
- Shareholders / Members
- Directors / Managers
- Company secretary
- Statutory Register
Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.
Are there any government incentives?
Poland offers businesspeople easy access to a market of over 450 million people in the European Union. The central location of the country, competitive and inexpensive labour costs and investment incentives make Poland an attractive location for foreign investors, where they can enjoy profitable business and improved performance.
State support - Incentives available to inward investors in Poland consist of tax incentives and financial assistance. Remembering that Poland is a member of the EU, incentives must be in line with EU state aid regulations. Generally, various combinations of state aid in Poland cannot exceed 50% of investment value.
Tax incentives - Tax incentives are the most commonly offered incentives in Poland. There are two groups of such incentives:
- Corporate income tax exemption
- Local tax exemption
Corporate income tax exemptions are accessible in special economic zones. Local tax exemptions are exemptions from real estate tax.
Financial assistance - The Polish government offers cash grants for strategic or direct investors.