Poland has ascertained stability over financial crisis and it provides investors with bright potential. The country’s economy has improved so much over the years that the country today has a competitive economy, a huge market, access to an oriented workforce, and favourable business conditions over the entire territory in preferred regions. The formation of companies in Poland is a simple procedure requiring specific important measures. Below are some of the factors to consider when оpening a company in Poland.
• Open your Polish company in a strategic location
One of the significant factors to consider when planning on opening a company in Poland is Location. Different regulations, pricing, and availability may exist in different cities and areas. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.
• Poland offers a friendly business environment
You must clearly know the business factors before dwelling in as that helps you realize how the firm would stand.
Business factors that need to be considered are;
- Industry and type of business
- Headquarters/Individual nationality.
- The presence of current trade agreements.
• Geography
Geography might be a problem as Poland has a poor network of roads, railways, and infrastructures, which raises the costs of doing business since each regional Polish market will be difficult to access. Internet connectivity in municipal regions is typically satisfactory, while in less populous places it may be insufficient.
• Norms
Poland is a country famed for its sluggish trade courts, tough labor law, and thick red tape. These obstacles have all historically proven challenges to foreign companies.
Company Options Available In Poland
When starting a company in Poland, it is important to decide which type of legal entity to be incorporated. Investors in Poland can select between several business structures, each of them according to the size of the business, the value of the investment, the number of founders, and other criteria.
Enterprises from non-EU countries can set up and operate a business solely in the form of the following:
• Limited liability company (Spółka z ograniczoną odpowiedzialnością or sp. z o.o.)
A limited liability company is one of the most prominent options for investors seeking to start a business in Poland since it combines the ease of incorporation that a partnership has with the liability protection of corporations. This is because it has its own diverse legal personality, which allows shareholders to limit their liability to just their share contribution. However, limited liability companies may not freely transfer share ownership and also may not list on stock exchanges, which might make it difficult for them to raise capital.
An LLC needs at least a shareholder and director of any nationality, a registered office in Poland, and a minimum paid-up capital of PLN5,000. LLCs need to comply with full accounting and financial reporting prerequisites regardless of their size and might also be subject to audits if they surpass certain thresholds. If they have more than 25 shareholders or share capital exceeding PLN500,000 they will also be required to assign a supervisory board.
• Joint-stock company (spółka akcyjna or S.A.)
Joint-stock companies are split into private or public entities depending on whether they intend to list on Polish stock exchanges. They are usually most established for large business enterprises, or those looking to enter the financial services sector. Much like an LLC, it offers liability protection for its shareholders and directors since it constitutes a different legal entity. But, it is subject to relatively stricter and costlier operation and management requirements since it has the potential to be listed on stock exchanges.
It also needs at least a shareholder and director of any nationality, a local registered office address, and a minimum capital of PLN100,000, of which 25% must be paid up. Also, it is subject to full accounting and financial reporting requirements. But, unlike LLCs, they are always required to appoint an auditor, and a supervisory board must always be established. At least 3 members must exist in a private company, whilst 5 are expected in a public company.
• Limited Partnership
Limited partnerships may acquire rights and incur obligations. It is a form of commercial partnership and may be formed by a minimum of two individuals, one as a general partner, and the other as a limited partner.
• Branch offices (oddział)
A branch office is a different and autonomous part of a business activity that is pursued by a company outside of its registered office or primary place of business. When establishing a branch office, a foreign company may pursue economic activity just within the scope of business pursued by that foreign company.
• Representative offices (przedstawicielstwo)
Foreign companies may install representative offices, with their registered office in the territory of the Republic of Poland. The extent of activities of a representative office may only include activities comprising of advertising and promoting the foreign company.
Before deciding on which legal form of business to establish, entrepreneurs should consider the extent of their responsibility, operating costs, and the size of the company.
Company Incorporation in Poland; how to start
- Step one in the process of incorporating a company in Poland; you need to choose a legal form of your future Polish company.
- Step two; you need to decide on key features of your new company, e.g, name, share capital, representation rules, etc.
- Step three; you need to gather all necessary documents. The selection of documents required for company formation depends on whether you want to invest directly and become a shareholder of Polish Company in person, or invest indirectly and become a shareholder of Polish Company through your foreign company. Compete list of required documents shall be specified with the company registration attorney.
- Final step; you will also need to determine whether to visit Poland to finalize the company incorporation process or run the process remotely and entrust the company formation assignment to a corporate Law Firm.
Company registration in Poland takes about 2-3 weeks and the registration procedure is straightforward.
Do you need any help starting a company in Poland?, let’s go ahead together and contact your Damalion expert now to create your company in Poland.
