Doing Business in Poland

For a foreign company considering operations in Poland, there are several ways to establish a presence: form a subsidiary, register a branch or representative office, acquire shares in a Polish company, or, where eligible, start as an individual entrepreneur. The right option depends on the intended scope of activity. This guide covers company forms, registration, hiring and tax topics described in Poland.

Why Poland may be attractive for investment

• Location: in the center of Europe, a base for expansion in multiple directions.
• Market: nearly 40 million residents and a substantial market for goods and services.
• Talent: a developed education system and access to qualified workers in IT, medicine, management, law and industry.
• Global business presence: global companies have subsidiaries or offices in Poland. Polish family businesses are growing and may be valuable partners.

Who can start a business in Poland

EU and EEA citizens

They may conduct business on the same terms as Polish citizens, without additional formalities.

Citizens from outside the EU

Non-EU citizens may start a business in Poland if they hold one of the following:

• a permanent residence permit;
• a temporary residence permit;
• refugee status; or
• a valid Pole’s Card (Karta Polaka).

Foreign companies

Foreign companies may:

• open a branch or representative office in Poland;
• form a subsidiary; or
• acquire shares in an existing Polish company as an investor or to take control.

These options are available on the same terms as for Polish entities.

Forms of doing business in Poland

Sole proprietorship

This is the simplest form and is operated by the business owner personally. It is suited to smaller ventures where the risk is not high.

Commercial companies

For larger ventures, three common forms are:

1. Limited liability company (sp. z o.o.): its operating principles are similar to limited liability companies in Western Europe and it is the most commonly chosen form.
2. Joint-stock company (S.A.): comparable to joint-stock companies in other countries and eligible to list on a stock exchange through an IPO.
3. Simple joint-stock company (P.S.A.): designed for startups and technology companies. It combines features of a sp. z o.o. and an S.A. with less formalized rules; this relatively new form is gaining popularity.

Branch and representative office in Poland

Branch of a foreign company

A branch is an organizational unit that may conduct business within the same scope as the head office. It does not require a separate company.

To register a branch:

• file an application with the National Court Register (KRS);
• appoint a person to manage the branch;
• file the parent company’s registration documents with the KRS; and
• provide proof of the company’s registration in its home country, if applicable.

The procedure is not complicated or time-consuming.

Representative office

A representative office may not conduct business activity. Its activity is limited to advertising and promotion of the parent company. It must be entered in a dedicated register. Standalone representative offices are rare in practice.

Subsidiary in Poland

For a foreign company planning full operational activity in Poland, a subsidiary is usually the best option.

How it works:

• form a new sp. z o.o. or joint-stock company;
• the foreign company takes shares in the new company;
• the subsidiary operates on the same terms as any other Polish company; and
• as a shareholder, you may appoint the management board and direct operations and financial policy.

National Court Register (KRS)

The KRS is a public register of companies in Poland, available online free of charge.

The KRS includes:

• management board details;
• supervisory board information, if one exists;
• shareholder information; and
• annual financial statements.

Changes to report on an ongoing basis:

• changes to the management board;
• amendments to the company’s articles; and
• changes to share capital.

The KRS provides information about company representation and financial condition, and can help you review ownership structure before an investment decision.

Hiring employees in Poland

Labor market

• Poland has a diverse economy and workers with experience across many industries.
• Universities educate IT specialists, medical professionals, analysts and other professionals.
• Global corporations create access to experienced managers, lawyers and e-commerce specialists.
• English is a required school subject, which can make communication with foreign entrepreneurs easier.
• Recruitment options include job portals, university onboarding programs and local and global recruiting firms.

Forms of employment

Taxes in Poland

Corporate income tax (CIT)

Poland offers a relatively low CIT rate. Under the most favorable option, it may be as low as 5%.

Dividend tax

• The standard rate is 19%.
• Depending on international agreements signed by Poland, tax in a holding structure may be 0%.
• A foreign entrepreneur may avoid dividend tax in Poland and account for it only in the home country.

VAT

• Goods and services are generally subject to VAT.
• Not every entity is required to pay VAT.
• An exemption is available while annual turnover does not exceed PLN 200,000.
• In certain situations, VAT is not due, such as on exports, or may be refunded.

Read more about taxes that apply in Poland.

Where to locate a business in Poland

The right location depends on the type of business, but many companies choose Warsaw.

Reasons listed for Warsaw:

• it is Poland’s capital, with more than two million residents;
• it is a business and financial center in Central and Eastern Europe;
• it offers a wide range of office space; and
• it provides access to specialists across industries.

If you want to learn more about business opportunities in Poland, contact us.

Frequently asked questions

Which form of entry into the Polish market is often chosen: a branch, a subsidiary or an acquisition? For full operational activity in Poland, a subsidiary, most often a sp. z o.o., is usually the preferred option. You form a new company, take shares and operate on the same terms as other Polish entities. A branch may suit a company that wants to operate within the same scope as its head office without establishing a separate company. Acquiring shares in an existing Polish company may suit an investor or a buyer seeking control of an operating business.

What is the difference between a branch and a representative office of a foreign company in Poland? A branch may conduct business within the same scope as the foreign head office and must be entered in the KRS. A representative office may not conduct business activity. It is limited to advertising and promotion of the parent company, must be entered in a separate register and is rarely used as a standalone structure.

How do you register a foreign company’s branch in Poland? Registering a branch requires an application to the KRS, appointment of a branch manager, filing the parent company’s registration documents, and proof of registration in its home country if applicable. It describes the procedure as not complicated or time-consuming.

Can a foreign company hire in Poland on a B2B basis instead of using employment contracts? B2B cooperation is increasingly common and often chosen by IT specialists, lawyers and corporate employees. Compared with an employment contract, it involves lower social insurance contributions on both sides and higher net pay for the contractor. An employment contract, in turn, provides rights such as public healthcare, minimum pay and mandatory paid leave.

What taxes should a foreign entrepreneur consider when starting a business in Poland? Three main areas are CIT, dividend tax and VAT. CIT may be 5% under the most favorable option. Dividend tax is generally 19%, but may be 0% within a holding structure depending on international agreements. VAT generally applies to sales of goods and services, while an exemption is available while annual turnover does not exceed PLN 200,000.