Business in Poland

Business establishment and registration in Poland

Polish law provides for numerous forms of conducting business activity, which enable entrepreneurs to choose between individual conducting of business activity, civil partnership, registered partnership, professional partnership, limited partnership, limited joint-stock partnership, limited liability company, joint-stock company and other forms - not having legal personality. The most important factors determining the final choice of the form of conducting business activity include requirements concerning initial capital, scope of shareholders' liability or formalities prior to commencing business activity.

Economic activity in Poland can be conducted in the form of:

• business activity- single person entrepreneur,

• partnership company,

  • registered partnership,
  • professional partnership,
  • limited partnership,
  • limited joint-stock partnership.

• capital companies:

  • limited liability company,
  • joint-stock company.

EU-citizens and nationals of EFTA countries belonging to ECC can benefit from the same rules as Polish citizens. However, there are some limitations because not every form of activity is available to non-nationals.

A foreign person can conduct business activity in Poland in the form of:

  • limited partnership;
  • limited joint-stock partnership;
  • limited liability company;
  • joint-stock company.

They are also allowed to start their own individual business activity.

In addition, a foreign entrepreneur can open a branch office or a representative office in Poland.

Branch Office

Foreign companies may establish branch offices in Poland. A foreign entity creating its branch office must appoint a person in Poland who is authorized to represent this entity. A branch office must be registered with the National Court Register (Krajowy Rejestr Sądowy).

Branch offices must maintain separate accounting books, in Polish, pursuant to Polish accounting regulations.

Branch offices must also notify the Polish Minister of Economy of:

  • initiation of liquidation procedures for foreign company that opened the branch in Poland,
  • termination of the foreign company's right to do business,
  • the loss of the foreign company's right to transfer assets.

The branch office must use the name of the mother company in the language of the country where it is registered, along with the name of its legal form translated into Polish.

Representative Office

Foreign companies may establish their own representative offices in Poland solely in order to promote and advertise the company establishing the office which the one and only field of activity they conduct on behalf of the company they represent.

Establishment of a representative office requires registration in the Register of Representative Offices of Foreign Business Entities kept by the Minister of Economy.

Registration is accomplished by making application.

The application, in Polish, should contain the following:

  • The name, place of registration and legal form of the foreign company opening its representative office,
  • The initial capital of the foreign company opening its representative office,
  • The scope of the business activity of the foreign company opening its representative office,
  • The name and address of a person in Poland authorized to represent the foreign company.

The application should have attached:

  • The articles of association or charter of the foreign company,
  • A copy of its entry in the Commercial Register or its equivalent,
  • A statement of the foreign company authorizing the establishment of a representative office in Poland,
  • A statement, if applicable, by the foreign company as to the amount of paid in share capital.

Any documents in a foreign language must be accompanied by a certified Polish translation.

Representative offices must use the name of the mother company in a language of the country where it is registered, along with the name of its legal form translated into Polish and the words "przedstawicielstwo w Polsce" (representative office in Poland) added.

Representative Offices must maintain separate accounting books, in Polish, pursuant to Polish accounting regulations.

Legislation for an entrepreneur

The regulations on carrying out business activity are set forth in the Freedom of Conducting Business Activity Act of 2 July 2004 (Journal of Laws 04.173.1807).

According to this Act, business activity means the profit-oriented business of manufacturing, construction, trading, providing service and searching, identifying and extracting minerals from deposits, as well as professional activity performed in an organized and continuous manner.

The provisions of the Act, however, do not apply to manufacturing activity in agriculture in the scope of farming, animal breeding, gardening, vegetable growing, forestry and inland fishing, as well as offering rooms for rent by farmers, selling home-made meals and providing other services in farms, connected with tourist stay.

An entrepreneur as defined by the Act is a natural person, legal person and an organizational unit which is not a legal person and which is granted legal capacity under a separate act - carrying out, on its own behalf, a business activity. Partners of a civil law partnership, in the scope of their business activity, are also considered entrepreneurs.

Natural persons establishing their own company (including partners in a civil law partnership) have to register in the Business Activity Records. The Register is kept by a district relevant to the entrepreneur's place of residence (permanent).

The citizens of Poland, European Union, countries of the European Economic Area which do not belong to the EU, and countries which are not parties to the agreement on the European Economic Area, who commence a business activity in Poland, and permanently reside in another EU country, should register a business entity in a district which is the main place for carrying out this activity in Poland.

Registration is open - everybody can access its data and view registration documents of an entrepreneur which is in the Register.

According to the article 13 of the Economic Freedom Act among the least complicated forms of conducting business activity, which are permitted to each Polish entrepreneur and to foreign persons from the European Union Member States and European Free Trade Association (EFTA) member states - parties to the European Economic Area Agreement and foreign persons from states which are not members of the treaty on European Economic Area, which may enjoy economic freedom on the basis of agreements concluded by those states with European Community and its Member States, one can name individual conducting of business activity and civil partnership. They do not require neither initial capital nor high costs related to setting up business activity.

In order to acquire the entry in the Bussines Activity Register (Ewidencja Działalności Gospodarczej), it is required only to fill one form, which is free of charge.

Moreover, citizens from other states than European Community Member States, Member States of the European Free Trade Association (EFTA) - parties to the agreement on European Economic Area and foreign persons from states which are not parties to the European Economic Area, who:

1. posses in the Republic of Poland:

a. residence permit,

b. residence permit for a long-stay European Community resident,

c. residence permit for a fixed period issued for the purpose referred to in the article 53, section 1, subsection 7, 13, 14, or 16 of the Act on aliens of 13th June, 2003,

d. residence permit for a fixed period granted residing on territory of Republic of Poland or residing on that territory for the purpose of joining with a family, member of a family within the meaning of the article 53 section 2 and 3 of Act on aliens of 13th June,2003 of persons referred to in the subsections a, b, e and f,

e. refugee status,

f. supplementary protection,

g. permit for tolerated stay,

h. residence permit for a fixed period,

i. residence permit for a fixed period and are married to Polish citizen residing on the territory of Republic of Poland,

j. visa referred to in the article 61 section 3 or article 71a section 3 of the Act on aliens of 13th June, 2003, if before such a visa was issued they had been entitled to undertake and exercise a business activity on the basis of section 3. 

2. enjoy temporary protection on the territory of Poland,

3. posses valid Polish Charter,

4. are family members within the meaning of the article 2 section 4 of the Act of 14th July, 2006 on the entry into, residence in and exit from the Republic of Poland of nationals of the European Union Member States and their family members, joining the citizens of the states referred to in the article 13 section 1 of Act on freedom of economic activity, or staying with them,
- may undertake and conduct economic activity on the territory of Poland on the same terms and conditions as Polish citizens.

Other persons shall have the right to undertake and conduct economic activity only in the form of a limited partnership, limited joint-stock partnership, limited liability company, and joint-stock company, as well as to join such partnerships and companies and to take over or acquire shares in these entities, unless otherwise provided for in international agreements.

Moreover, citizens of other states are entitled to undertaking and providing in Poland individual economic activity if international agreements provide so.

 Single person entrepreneur

Operation of a small business by an individual referred to as an entrepreneur.
The entrepreneur is liable for his or her debts and obligations with his or her entire property. Entry in the Business Activity Register (Ewidencja Działalności Gospodarczej) is maintained by the head of a commune (wójt), the mayor of a town or the president of a city.

The procedures below concern registering a company by natural persons.

COMMUNE OFFICE

Submitting an application for registering a company in the Business Activity Records.
Required documents: ID.

Fee: 100 PLN.

An entrepreneur, who is establishing a business activity, may submit, together with the application for registering in the Register, an application containing the following request: registering in the National Official Register of Business Entities (REGON), submitting an application for assigning of revising NIP number; registering in ZUS (Social Insurance Institution).
If you decide to submit applications in separate offices on your own, you have to visit, in the following order: Statistical Office, Tax Office and Social Security Institution.

STATISTICAL OFFICE

You have to submit the RG-1 application for registering in the National Official Register of Business Entities (assigning the REGON number).

Required documents:
ID, Certification of registration in the Business Activity Records (a copy, original available for inspection) – no fees.

TAX OFFICE

Register the commencement of business activity in a Tax Office relevant to the official seat of an economic entity.

When registering, you have to choose a form of taxation and decide about VAT registration.
You also have to inform the Tax Office about a company bank account.

Required documents: ID, legal title to premises of a company's official seat, certification of registering in the Business Activity Records, certificate of assigning the REGON number (copies, originals available for inspection)

Fee:
PLN 170, if you decide to be a VAT payer.

SOCIAL INSURANCE INSTITUTION

Registering for compulsory insurance in Social Insurance Institution, relevant for the official seat of the business entity.

Required documents:
ID, certification of registration in the Business Activity Records, certification of assigning a REGON number, bank account agreement (copies, originals available for inspection). No fees.

Commercial companies
Commercial companies operate on the basis of the provisions of the Commercial Companies Code . They are divided into partnerships and capital companies. However, only a capital company has legal personality.

PARTNERSHIPS

  • Civil Partnership

Economic activity in a way of civil partnership may by exercised by persons entitled to exercise business activity on the territory of Poland in the form of an individual entrepreneur for the purpose of a small business.

It must be established by at least two natural or legal persons or organisational unit without legal personality which was granted a legal capacity on the basis of a specified act.

It is the partners, not the partnership itself, who are the operator. A civil partnership is set up according to the general principles of the Civil Law.

Each partner is jointly liable for the debts and obligations of the partnership without limit to the extent of his or her entire property.

The entrepreneurs should previously register in the Business Activity Register (each of them individually) and subsequently conclude a civil partnership agreement in writing.

Each partner has right to represent a company.

 

  • Registered partnership

Registered partnership is a partnership, which conducts business activity under its own name, and is not another commercial company. Each partner is responsible for a company's liabilities with all their property, jointly and severally with the other partners and the company.

It is established for the purpose of operating business on a larger scale.

A minimum of two individuals or legal persons or organizational units without legal personality which was granted a legal capacity on the basis of specified act are necessary.

Personal partnership. Registered partnership possess a legal capacity and may in its own name acquire rights, including ownership of immovable property and other rights in rem, incur obligations, sue and be sued.

Each partner is liable without limitation, for the debts and obligations of the partnership, jointly with other partners and the partnership, to the extent of his or her entire property (subsidiary liability of the partner)

In order to be effective, a deed of partnership must be executed in writing, whereupon the partnership should be entered into the National Court Register.

Each partner has right to represent a company. Registered partnership may also be represented by a proxy.

 

  • Professional partnership

A professional partnership is a partnership formed by partners with the aim of performing a freelance profession in a company, which conducts business under its own name. This company may be set up in order to perform more than one freelance profession, unless a separate act provides otherwise. Partners to the company may be persons authorized to perform the following professions: counsel, pharmacist, architect, construction engineering, expert auditor, insurance broker, tax consultant, securities broker, investment consultant, accountant, doctor, dentist, veterinary surgeon, notary public, nurse, midwife, attorney-at-law, patent agent, property expert and sworn translator.

This company can be established by minimum of two individuals or legal persons or organizational units without legal personality which was granted a legal capacity on the basis of specified act.

Registered partnership possess a legal capacity and may in its own name acquire rights, including ownership of immovable property and other rights in rem, incur obligations, sue and be sued.

Each partner is liable without limitation, for the debts and obligations of the partnership, jointly with other partners and the partnership, to the extent of his or her entire property (subsidiary liability of the partner).
In order to be effective, articles of incorporation of this partnership must be executed in the form of notarial deed, whereupon the partnership should be entered into the National Court Register.

Each partner has right to represent a company. Registered partnership may also be represented by a proxy.

 

  • Limited partnership

A limited partnership is a partnership which aim is to conduct business activity under its own name, where at least one partner (full partner) is responsible, without limitations, for the company's liabilities towards creditors, and the responsibility of at least one partner (limited partner) is limited.

It must be established and conducted by at least two individuals or legal persons or organizational units without legal personality which was granted a legal capacity on the basis of a specified act (for example partnerships).
Limited partnership possess a legal capacity and may in its own name acquire rights, including ownership of immovable property and other rights in rem, incur obligations, sue and be sued.

At least one partner is liable to the creditors for the debts and obligations of the partnership without limitation (the general partner) and at least one partner has a limited liability. However, if a business name of a limited partnership includes a name or a business name of a limited partner, this partner is liable for obligations of a partnership without any limitation. In the same way is liable limited partner performing an act in law in the name of partnership without disclosing his power of attorney or when he acts without authorization or beyond the scope of authorization.

The statutes of the partnership should be executed in a notarized form and signed by all general partners, whereupon the partnership should be entered into the National Court Register (Krajowy Rejestr Sądowy).

A partnership shall be represented by the general partners who were not deprived of the right to represent the partnership under the partnership deed or by valid court decision. A limited partner may represent the partnership only in the capacity of attorney. Partnership may be also represented by a proxy.

 

  • Limited joint-stock partnership

A limited joint-stock partnership is a partnership which aim is to conduct business activity under its own name, where at least one partner (full partner) is responsible, without limitations, for the company's liabilities towards creditors, and at least one partner is a shareholder. The initial capital of a limited joint-stock partnership should amount to at least PLN 50,000.

It is established for the purpose of operating a business under its name (usually a larger-scale business, for example, large family enterprises).
It must be established and conducted by at least two individuals or legal persons or organizational units without legal personality which was granted a legal capacity on the basis of specified act.

Minimum capital is 50,000 PLN.

Limited partnership - may in its own name acquire rights, including ownership of immovable property and other rights in rem, incur obligations, sue and be sued.
At least one partner is liable to the creditors for the debts and obligations of the partnership without limitation (the general partner) and at least one shareholder is not liable for debts and obligations of a partnership. However, if a business name of a limited joint-stock partnership includes name or a business name of a shareholder, this shareholder is liable for obligations of a partnership without any limitation. In the same way is liable limited partner performing an act in law in the name of partnership without disclosing his power of attorney or when he acts without authorization or beyond the scope of authorization.

The deeds of the partnership should be executed in a notarized form and signed by all general partners, whereupon the partnership should be entered into the National Court Register (Krajowy Rejestr Sądowy).

Limited joint-stock partnership shall be represented by the general partners who were not deprived of the right to represent the partnership under the partnership deed or by valid court decision. A shareholder may represent the partnership only in the capacity of attorney. Limited joint-stock partnership may be also represented by a proxy. In limited joint-stock partnership a Supervisory Board may be optionally appointed. If a number of shareholders exceeds 25 the Supervisory Board shall be compulsory.

CAPITAL COMPANIES

All commercial companies are formed in the moment of their registering in the National Court Register. Nevertheless, only a limited liability company and joint-stock company may operate, without such registration, but solely on the basis of an agreement or statute of incorporation.

  • Limited liability company

A limited liability company may be formed by one or more persons, and may conduct business activity of any purpose which is legally permissible, unless otherwise provided by the law. Partners are not responsible for a company's liabilities however they bear a risk up to the value of shares contributed. The initial capital of a company should amount to at least PLN 5,000.

It may be established by one or more individuals or legal persons or legal persons or organizational unit without legal personality which was granted a legal capacity on the basis of a specified act (for example partnerships). However, it may not be established solely by another single-member limited liability company.

A limited liability company is a legal entity.

The Company is liable for its debts and obligations with its whole property without any limitations.

The shareholders are not liable for the company's obligations, they bear a risk up to the value of shares contributed. Where execution against the company has proved ineffective, the members of the management board shall be liable jointly and severally for the obligations of the company. A member of the management board may extricate himself from the liability by showing that a petition for declaration of bankruptcy was filed or arrangement proceedings were instituted in due time, or that a failure to file a petition for declaration of bankruptcy or institute arrangement proceedings was not due to his fault or that the creditor suffered no damage even though no petition for bankruptcy was filed or no arrangement proceedings were instituted.

Superior authority of a company is Shareholders Meeting. Company is represented by a Management Board (consisting at least of one person) according to principles laid down in a company deed or a company charter. A company may be also represented by proxy. In a limited liability company a Supervisory Board may be optionally appointed. In limited liability companies whose initial capital exceeds PLN 500.000 and the number of shareholders exceeds twenty five the Supervisory Board or audit commission shall be compulsory.

  • Joint-stock company

It is established for the purpose of operating business on a large scale. Capital may be obtained through issuance of shares.

It may be established by one or more persons; exception: it may not be established solely by a single-member limited liability company.

A joint-stock company may be set up by one or more persons. It cannot be set up only by a single-member, Limited Liability Company. The initial capital of a company should amount to at least PLN 100,000.

A joint-stock company is a legal entity.
The Company is liable for its debts and obligations with its whole property without any limitations. The shareholders are not liable for the company's obligations, they bear a risk up to the value of shares taken up.

Superior authority of a company is General Assembly. A joint-stock company is represented by a statute. In a joint-stock company, Supervisory Board must be obligatorily appointed. A joint-stock company may also be represented by a proxy.

COSTS

Court fees related to the forming companies are:
- PLN 750 for partnerships /PLN 1000 for capital companies
- 500 PLN for the announcement in the Court Gazette (Monitor Sądowy).

A registration court shall issue a decision on registering a company in the register, within 14 days from the day of submitting an application.