Why is company formation in Poland more profitable than company formation in Germany?

Company Formation in Germany

Located in the heart of Western Europe and a member of the EU since January 1958, Germany, whose currency is euro, has been a member of the Schengen treaty since the 26th of March 1995. The German Commercial Register is the Official body that is responsible for the company registration and maintenance.

Limited Liability Company Registration

1. Legal system

The German legal system is built on the 1949 Basic Law of the Federal Republic of Germany.
Restrictions on foreigners: work permit for directors should be obrained before the company is formed.
Anyone can register a German company.

The Poland Restrictions on foreigners: work permit should be obtained after 6 months if the director stays more than 180 days in Poland. Anyone can register a Polish company.

2. Time frame for company registration

  • Germany - 2-3 weeks for registration
  • Poland - notary company formation 3-5 weeks, electronic (online company formation) 10 business days

3. Share capital

  • Germany: the minimum initial share capital is 25000 euro which is payable to a corporate bank account in at leat 50% before the registration is processed.
  • Poland: share capital minimum 5000 zl (1250 euro)

4. Shareholders / Managers

  • Germany; any company is expected to have at least one shareholder, that may either be a corporate body or natural person.
  • Poland; any company is expected to have at least one shareholder, that may either be a corporate body or natural person.

5. Managing Directors

At least one managing director must be chosen as at the time of the company formation; this should be a neutral person. The directors may live in any part of the world. The shareholders can directly impact the management of the LLC in both countries

6. Registered office

The company must have a registered office in the country of choice

7. Financial statements

Both Poland & German companies are obliged to prepare annual financial statements.

8. Taxation

  • Germany; Companies that conduct business activities in Germany are liable to Profit Tax on their net profit. Presently, the current profit tax rate stands at 15%. Also, there is an additional “Solidarity Surcharge” of 0.825% of the overall corporation tax aid and the local Trade tax, which can hover around 7% and 17.5%.
  • Poland; Corporate income tax is 9-19%, depending on the company revenue.

9. Double tax treaties

Both Poland and Germany has agreed on numerous double treaties with numerous jurisdictions across the globe.

10. VAT

  • Germany; Depending on the nature of its business activities, a company in Germany may be required to or allowed to register for VAT. The maximum rate for VAT in Germany is 19%.
  • Poland; Company can choose register to be a VAT tax payer, unless it provides certain types of services or sells goods when VAT registration is a must. Rates: 0%, 5%, 8% or 23% VAT  depending on the type of goods and services 

If you are interested in buying a ready-made company or planning to establish a new company in Poland, qualified specialists will answer all your questions and offer favorable cooperation terms.



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