Poland company formation: things to consider
The reasons to do business in a European county can be different. No matter why you are looking for new opportunities, it is important to consider all pros and contras when selecting a country to invest not to waste time and money. In this article, we will discuss why the decision to incorporate a company in Poland can be the right one for you and what steps you should undertake to launch a business there.
Here are some reasons why Poland is a great place to invest:
1. The country enjoys a great geographical position. It borders with EU member states and Eastern European countries providing access to the markets with millions of consumers.
2. Polish economy demonstrates the fastest growth among EU economies. According to the World Bank, Poland was the 27th country for ease of doing business in 2017. This means that company formation in Poland is simple.
3. The EU started the structural and cohesion fund programme and will give €85.2 billion for development of Polish infrastructure and important projects.
Sectors to invest in Poland
Currently, the most attractive business sectors to invest money are:
- aviation and automotive sectors
- food industry
In addition, Polish government provides aid to foreign businessmen whose activities deal with renewable energy, environmental protection, training, logistics.
Polish company formation – where to start?
Before you start the incorporation procedure, you must decide which legal entity suits your needs better and to collect the required documents. Also, check whether your planned activities are subject to VAT (if yes, you will have to go through a VAT registration process).
Your firm should have an office and a seat (the city where your company has its office).
You should choose whether to become a shareholder of a company in Poland or invest indirectly and get a subsidiary. Also, you have a choice whether to come to the country personally and go through the incorporation process by yourself or hire a lawyer and entrust him the registration duties upon the power of attorney.
Which legal entity to choose for a Poland company?
Deciding which type of a firm to register, foreign entrepreneurs have few options to choose from. These are corporate companies (LLC and JSC) and partnerships. Each type has its own peculiarities and advantages.
LLC (Sp. z.o.o.) requires to have minimum 5,000 zlotys on a bank deposit and at least one stockholder and a manager (can be one person). Note that there are no limitations in a number of directors or stockholders and no additional fees for more people.
JSC (S.A.) is obliged to have 100,000 zlotys on a bank account (25% should be paid at the time of registering the company) and minimum one founder and at least one person to represent a supervisory board and executive board.
Registered partnership (Spółka jawna) may be considered by small business owners. The incorporation process is simple as well as the firm’s liquidation. The registration fee is 600 zlotys.
Civil partnership (Spółka cywilna) is another option for small businesses. This form has no legal entity, registration is free of charge, its owners may choose a taxation form.
Limited liability partnership (Sp. K.) is the way to run a company under its real name. It does not require starting capital, all profits are shared by partners according to their input.
Limited joint-stock partnership (S.K.A.) allows to increase capital by issuing shares, profits are shared by partners based on their input.
Note that corporate companies’ stockholders have liability limitation while in partnerships liability most of the time is unlimited.
Which documents are required for company incorporation in Poland?
Each form of a legal entity may require a different set of documents for registration. In all cases, a foreign businessman should provide an ID or passport and also an excerpt from the local company registry in case of registering a subsidiary.