Establishing and registering an entity
The first step in incorporation an entity is to choose the appropriate legal form. The limited liability company or public limited company are probably the most attractive form for foreign investors conducting business in Poland.
Therefore, the following explanations will focus on the hereinabove.
Procedure - The limited liability company or public limited company
1. Notarize company agreement
1a) The founding documents for an LLC must be prepared and signed in front of the Polish notary.
The fee to notarize the company deed of association cannot exceed PLN 10,000 plus VAT and civil law transaction tax (0.5 percent of the initial capitalization of the LLC). The notary will also prepare the application for the court (form KRS-W3), required for procedure 3. A lawyer would normally charge between PLN 5,000 and PLN 25,000 (taxes, social insurance, registered office, and so forth).
1b) The LLC can be established using standard articles of association available in the ICT system: https://ems.ms.gov.pl/. That new alternative method does not require notarization of the company's agreement. However, this requires online registration, which the majority of entrepreneurs do not use in practice.
In order to form a company, shareholder(s) use a standard articles of association form available in the electronic system operated by the Ministry of Justice and sign it with a digital signature. The benefit of online registration is that the application is supposed to be considered within 24 hours, although in practice this deadline is often extended by a few days.
Investors looking for more complex and sophisticated structures should set up a company in the traditional manner, i.e. before a Polish notary.
2. Deposit paid-in capital at the bank
All companies in Poland are required to open a bank account. The documents required for the opening of an account may be different at every bank.
The initial capital of the company must be paid in full by the LLC and at least in 25% by the PLC before the moment of submitting the documents to the Court.
3. File for company registration at the National Court Register
The registration with the National Court Register determines the creation of a new business entity and is binding for other authorities such as: Tax Office, Statistical Office and Social Insurance Office. Newly established companies are given their tax identification number (NIP) and statistical number (REGON) automatically within few days of court registration.
Apart from an application form (KRS-W3), the following attachments are required upon registration of LLC:
- articles of association,
- documents appointing the company’s governing body (the Management Board),
- a statement from all members of the Management Board that the contributions towards initial capital have been made by the shareholders in full,
- consent to the appointment of a company’s representatives (KRS-WK),
- a list of the shareholders, the number and nominal value of shares held (KRS-WE),
The branch office get its own KRS number.
The National Court Register offers online registration, see point 1b)
The costs to establish an LLC are: PLN 500 for registration and PLN 100 for publication in the official court bulletin.
4. Register for taxes and VAT
A newly registered business entity will be required to file a new form (NIP-8) containing supplementary data with the head of the tax office within 21 days after the entity is initially entered in the National Court Register.
The company must register for VAT in the Tax Office by the date when the company carries out VAT-covered business activities for the first time. The company must provide VAT-R, confirmation of company registration at the National Court Register (KRS) and information on the address of its registered office.
If the Company is planning to conduct future foreign trade activities within the European Union, the company must register as an EU VAT taxpayer. The company must submit that application before commencing foreign trade activity within the European Union. However, first the company must be registered as a regular VAT taxpayer.
There is no fee for income tax registration, but for VAT registration is paid PLN 170 (If you want to have confirmation of register for VAT).
If you will employ staff you must:
- Register with the Social Insurance Institution (Zakład Ubezpieczeń Społecznych)
- Register with the National Labour Inspectorate (Państwowa Inspekcja Pracy)
There are no fee for registrations.
Procedure - Sole Proprietorship
If you want to start a business in order to become self-employed, it is relatively easy to register at the appropriate town or voivodeship administrative office.
The first step is to apply for an entry into the register of trade (wpis do ewidencji gospodarczej). To register a business, you need to choose one or more categories from the classification of activity. You apply also for a REGON number and a tax number (NIP). The REGON is used on a number of other forms so you will be blocked without it.
You will then need to register at the ZUS (social insurance) and if you need it register your business as a VAT taxpayer (VAT-R) at the tax office.
Registration of business activity by natural persons takes place at the Business and Information Central Register (CEIGD) and the CEIGD-1 form is available via the Internet or at the office. https://prod.ceidg.gov.pl/ceidg.cms.engine/
Business activity can be started as early as at the date of filing. Naturally, the application can also specify a different (later) date of commencing the business.
Good luck in business in Poland