How to Register a Company in Poland?

Prabhat Nigam

03 Dec, 2021

Venturing into markets across the borders requires formation and registration of the business entity in accordance with the regulatory framework of the said country. Poland is no such exception and therefore proper procedure must be known to register a company in Poland especially for the new offshore companies.

Poland is one of the biggest countries in Central Europe with a bustling population of around forty million people and also a gateway to the European market of 447 million people by virtue of being a member of the European Union. The first step to gain access to this opportunity is to company registration in Poland.

Business and investor friendly policies, big market size, competitive labour costs, location advantage and strong prospects of economic growth are some of the factors that make Poland an ideal destination for the businesses to invest and scale their operations. So businesses register a company in Poland and reap the fruits of incentives the government has to offer.

So in order for the businesses to scale and take their operations in Poland and subsequently to the whole of EU market, such businesses need to register themselves as a company, partnership, LLPs etc. or in any other business vehicle according to the laws of Poland.

Things to be aware of before Registration of a company in Poland

1. What kind of business entity must be registered: It is advisable for the businesses to decide what kind of business entity will be best suitable according to the needs of their business. Once the structure of the business is decided, then the process to register a company in Poland begins. There are certain business vehicles where the law does not mandate registration at all. Those businesses whose annual revenues do not exceed 50% of the minimum wage throughout the year are not mandated to get themselves registered. 
2. Choosing the type and method of taxation: Another important aspect before initiating the registration process is to determine the type of taxation system that will be best suited according to the needs of your organization. Along with the type of taxation system, method of paying tax advances must also be decided as to whether the taxes will be paid on a monthly basis, quarterly basis etc. Deciding beforehand the taxation system and method of paying advanced taxes is necessary because the same cannot be changed at any time. If you do not have NIP (Polish tax code), then at the time of registration NIP will be issued against your business concern and there is no need to apply for the same additionally.
3. Decide the date of commencement of business: Choosing a specific date of commencement of business is very important from the viewpoint of availing advantage of ZUS (social insurance institution) start allowance. If the business is commenced form the beginning of the month then for the next six months the period of without contributing to ZUS shall remain in force. Otherwise if the commencement date begins in the middle of month then the date for ZUS start allowance shall commence from the beginning of the next month.
4. Selecting the name of the business: The name of the business must reflect the objectives of the business so that it can be easily recalled by public. Further, the prospective name must be checked within the existing directory to see whether the same name has been taken by another company or not.
5. Deciding the object of business and selection of PKD codes accordingly: Before the registration of the company, it must be decided what kind of activities the company shall undertake and then accordingly a PKD code (Polish classification of activities) shall be assigned to the company which shall determine the way the company will be taxed and other obligations that the company would have to comply with.
6. Decide the bank for opening of your business’s bank account: It is advisable that all the transactions with respect to the affairs of the company must be taken care of using a separate bank account and not with personal account of the promoters. However before the company comes into existence, it is difficult for the bank to open an account in the name of the company. But, there are certain banks which do open a business account before the company gets incorporated. So, it is the duty of the promoters to decide the bank where the bank account of the company shall be opened depending on the services provided by the bank.
7. Make a ‘trusted profile’ and digital signatures: Before the registration of the company, it is advisable for the sake of convenience in electronically dealing with matters related to the company, the promoter must make his trusted profile online and also his digital signatures.

Formalities to register a company in Poland

Once the promoters decide the type of business vehicle and have collected the necessary information with respect to the taxation methods, selecting name of the business, PKD code etc., the time comes to register a company in Poland in the register of companies and completing the rest of the formalities of the business.

Following are the formalities that an entity has to fulfil to register itself as company in Poland:

1. Preparation of the final documents for the registration of the company: The documents required for the registration of the company depends on the type of business vehicle the promoter adopts for its business entity. For instance, for the sole traders, mere identity card is the requirement for registration. For running an online business, a ‘Trusted Profile’ or digital signature is the additional requirement. To register a company in Poland, documents like AoA and MoA, contributing statements, notarized deed, subscribed share capital, information on shareholders etc. are required. The office where the registration of the business entity will take place depends on the type of business cycle used by the company.
2. Application at the Social Insurance Institution (ZUS): At the time of registration of the company, the promoter is automatically directed to pay insurance premiums at the ZUS^[1]. However in case where the promoter is starting the company for the first time or a long break has transpired from the last date of business, then the promoter is eligible for availing the scheme of start allowance where the owner is supposed to provide only health insurance for the employees for the first six months and no other insurance premium. Further it is the duty of the owner to report his employees and co-workers to Social Insurance Institution.
3. Submission of data on taxes to the tax officer post registration: If the registered business sets up another business entity after its incorporation, then the business is bound to submit and share data related to its taxes with the VAT department.
4. VAT registration as a taxable person: Those businesses who are normally not mandated to be registered under VAT and if they wish to avail the tax credits then the business must get itself registered from the VAT department and in case it wants to settle tax credits after availing services from other businesses in EU, then the business is also mandated to be registered as a VAT-EU taxpayer.
5. Receiving other business licenses: Diverse businesses have different registration requirements from the respective concerned departments. Therefore, once the registration is done, the company must in all earnest apply and gain registration permits from other departments before commencement of the business.
6. Opening of Bank account in company’s name: Not every bank is willing to open an account in the name of the company before its incorporation. Therefore, it is advisable to the promoters to open a separate bank account in the name of the company as soon as the company gets registered and prevent the promoters from incurring any personal liability on account of the business. At the time of opening of business account in the name of the company, proper research must be done to find out the bank offering services best suited for the company’s operations.
7. Maintenance of register keeping record of physical inventory: Just as the books of accounts are prepared recording incomes and expenses, similarly it is required to keep a record of the physical inventory in the books from the date of commencement of business.  

Tax structure to register a company in Poland

The basic tax that is imposed on the corporations is 19% of the tax base. But those companies which have turnover less than or equivalent to 2 million Polish Zloty then they are subject to a tax rate of 9%. This makes it even more appealing for the corporations to start their business expansion in the EU market through Poland.

Conclusion

To register a company in Poland or anywhere else especially when embarking on offshore operations, the seemingly smooth process of registration is always riddled with difficulties owing to the diversities involved in the business. Further, the process to register a company in Poland never gets over with incorporation. There are number of other formalities and other relevant permits depending on the nature of business that a company requires to conduct its operations. Therefore, it is advisable for the businesses expanding operations in Poland to solicit the services of experts well versed with the regulatory framework of Poland.

Read our article:All you need to know about Registering your Company in Russia