First of all, this year we want to venture into making known the benefits of investing in Europe. Although it seems expensive or tedious, there are countries with certain benefits that must be highlighted, so today I talk about Poland.
Poland today is not even a quarter of what it was before, this country has opened up to endless possibilities to attract foreign investments. From not requiring visa to foreigners until the development of financing of certain projects.
The institutions are decentralized from the government, there are procedures that can be done online or physically. It is a country that allows you to buy already established companies or shares in them.
But not everything is the color of roses, since in this country a language is spoken that only they speak it is Polish. This makes communication very difficult, in addition to any documentation that you are going to present regarding the company and / or staff, it must be in this language.
Unfortunately, they do not accept English, and documents in other languages must be accompanied by a sworn translation from a Polish translator certified by the government.
In addition to that you have to study well in what you are going to invest or which business you will mount, since certain economic activities are regulated by licenses and patents.
- Before investing in Poland, you should be aware of a number of fundamental aspects of the economy of this country, such as:
- Investments that will generate profitability in Poland.
- Instruments that support foreign investment in Poland.
- Visas in Poland
- Types of companies in Poland.
- There is also another type of association, but simplified where there must be at least one limited partner and two general partners. The founding document may be a mutual agreement between partners and the name of the company with the termination in abbreviation “Sp. K.”. This can be registered online on portal 24.
- Procedure to open a company in Poland.
- Physical procedure:
- Online procedure:
- 1) Create a user account on the S24 portal and create a business profile.
- 2) Start of company registration.
- 3) Signature of documents and application.
- 4) Payment of the request.
- 5) Presentation of the company’s registration documents to the registration court.
- 6) Submit a management statement on the coverage of the share capital.
- 7) Pay the tax on civil law transactions (CCP).
- 8) Process the REGON and NIP numbers, taxpayer registration in the Social Security Institution.
- 9) Send the NIP-8 request
- 10) Send a registration request as a VAT payer.
- Taxes to consider in Poland.
- What we can tell you is that there is a corporation tax (In Poland it is CIT or corporate income tax) which is 19% or 9% (preferential for new companies). In addition, the dividend is taxed at 19% as surplus value. The payment of this tax is annual, at the end of the accounting closing.
- The value added tax or VAT (in Poland it is called consumption tax) has a standard rate of 23%.
- There are also other taxes such as:
Before investing in Poland, you should be aware of a number of fundamental aspects of the economy of this country, such as:
- The currency is Złoty, which is PLN in bank acronyms, its value is below the euro, since 1 PLN equals € 0.23.
- Inflation for the year 2019 was 3.22% according to the data published in Inflación.EU.
- The Consumer Price Index reached 2.6% in 2019 according to Macro Data.
- Regarding the Gross Domestic Product, there are no figures for the last quarter of the year 2019, but for the third one which is 132,405 million euros with a 1.3% rate based on the information published in Macro Data.
Evaluating these aspects one can perceive that the economy in Poland is quite stable, has a controlled inflation, with a healthy supply and demand, with regard to the purchase and sale of goods and services. The basic basket is adequate to the price index of the products and therefore the population with a minimum wage can live.
We comment on these data, since they are crucial to develop a financial structure of a business plan, in case you decide to invest there. These data represent crucial financial indicators to make any investment.
Investments that will generate profitability in Poland.
Poland is currently a country that is industrializing and therefore entering modernization. Since the government has launched an investment plan, which brings together both the private and foreign sectors, as well as the public, to make the country a great power.
So if you consider yourself an industrial entrepreneur, Poland is for you.
Among the investments we have:
- The construction sector: this sector is having an impressive boom in Poland, as the government offers incentives and financing for this type of economic activity. This involves what is the process of modernization in Poland, although you have to have licenses to develop this activity.
- The real estate sector: the purchase, sale and rental of commercial offices and houses, is another attractive market in Poland. Because investing in that is relatively easy there and a rise in real estate values in Poland is projected in the coming years, according to European economic experts.
- The energy sector: although many government licenses and patents are required to invest in this activity, it is an activity with greater incentives. Because there are not many companies in Poland that do this, there is little competition.
- The technology sector: within what it entails in turning Poland into a technological power, there are investments in this sector that require a lot of human capital and investments to carry them out. This activity has no patents or licenses, only certain government reports must be complied with.
- Small restaurants: people in Poland love to eat out all the time, and are open to try foods from other parts of the world. So take advantage of that data, although you would have to comply with certain sanitary conditions and licenses to operate.
- Translations: this market is very valuable in Poland, since the language is so complicated to understand, whoever has the virtue of learning it can set up a translation agency or private language schools. This is helpful for the rise of foreigners in Poland making investments and as for those Poles who decide to visit other countries.
Instruments that support foreign investment in Poland.
First of all, it should be noted that business activity in Poland is regulated by the Law on freedom of economic activity of July 2, 2004. This legal act is also known as the “law on the establishment of companies”, because it governs all activities business in Poland at the legal, economic and development level.
All the provisions of this law on entrepreneurship, economic activity, licenses or permits for certain types of businesses are applicable to all companies that have their headquarters in Polish territory. It is important to consult it before making any investment in Poland.
The most important instruments or mechanisms offered by the government of Poland are stipulated in the business web portal of the government of Poland. This web link also has information on the types of companies that can be opened, tax and accounting issues, the documentation that is required and the necessary licenses to operate.
Among the investment mechanisms we have:
Special economic zones: in Poland there are fourteen special economic zones, in which you can establish businesses with reduced taxes the first years of operation. These areas are bordering with Germany and the Baltic Sea, as well as with Eastern European countries.
In these economic zones industrial investment is feasible, although you need licenses to operate, to consult the licenses you can enter here. For companies that are established here there is the exemption from corporate tax, if they meet certain requirements in terms of years of operations and payroll, you can see that information here. In addition, these companies are given technology loans with low interest and regional grants.
The Polish state in reference to technological, industrial and energy investments, offers a series of grants and loans to companies, with reasonable interests. Which is given in order for the country to develop, but you must meet the requirements of Polish employees, as well as their social security.
Another of the investment mechanisms is that this country does not place restrictions on foreigners to invest. Since if you are a citizen of the European Union or belong to a country that integrates the European economic space, you have the same rights as a Polish investor. If you are a foreigner from another party, this country allows you to purchase existing companies or shares in them.
It should also be noted that Poland has digitized all its business opening processes, paperwork, accounting, taxes, among others. Virtually everything you can do online and check information on it, but everything is in Polish language.
Visas in Poland
The great advantage of Poland is that you do not require any type of visa to invest, even sometimes or even be there, to make business.
This is because the law on the freedom to start a business of July 2, 2004 in its article number thirteen, details the condition of each foreigner to invest.
In the case of citizens from countries of the European Union, as well as from the States of the European Economic Area, and from countries that are not part of the agreement on the European Economic Area, but also share economic freedom thanks to the agreements signed with the European Community.
These citizens can conduct business and engage in economic activity in Poland with the same rules, conditions and rights as a Polish. Also, foreigners, citizens of other countries, who were not mentioned above, who are legally resident in Poland have the same right.
Among others are those who have permission to be in Poland, have refugee status or, for example, have the Polish letter.
Citizens who name above must register in the business activity register. For this they must go to the town hall that corresponds to them, in relation to the place where they live in Poland. If they do not reside in Poland, but wish to have their business there, they must register with the city council that corresponds to the city where they are going to carry out the greatest amount of business activities.
Another case is those citizens who want to install a company in Poland, but do not correspond to the categories described above, can do so through a company, already established. In addition, they can acquire shares of these companies or belong to their board of directors.
The registration of this type of companies can be consulted in the National Legal Registry.
The advantage is that if you set up a company in Poland under the conditions detailed in the last two paragraphs, you can apply for a residence permit in that country.
Now if you want to see how your business is going, you have to go there.
In any case, if you are a European citizen, you do not need a passport, you only enter with an identity card. If you belong to a country in the European economic area, they only ask for your passport. And if you are a foreigner from Latin America, Africa and Asia if you require a visa to enter.
Although Venezuela is exempt from a visa to enter Poland, due to the strong economic crisis in that country, you must only attach to your travel documents, a special letter from Polish immigration authorities, and you can enter without problems.
In Poland there are business and tourism visas only.
Usually for the tourist visa what they request at the Polish embassy in those countries, is the original passport with six months of validity before the trip and identity documents, as well as sufficient funds for their stay in Poland.
In reference to the business visa they request the equally original passport and with six months of validity, your identity documentation, the verification of the funds to finance the trip, as well as the documentation of the company, such as your commercial register and the verification that You have actions there. These procedures usually last between 15 to 30 days.
The passport is originally requested, because the visa is included with a sticker on one of its sheets and is embossed.
Types of companies in Poland.
Civil Law Society: it can be constituted with two partners, whether natural or legal persons. The founding document (commercial register) must be a written contract with the names of the partners, as well as that of the company with the ending “civil law society” or an abbreviation (SC.). It does not require a minimum of capital and its registration is formalized in CEIDG or registry of entities of the national economy (REGON).
Explicit Society: it must be opened with two partners, they can be physical or legal. The founding document must have personal data of the partners, the assets with which they constitute the company and this contract must be notarized. In addition to owning the name of the company with termination “general partnership” or “SP. J.”. It does not require a minimum of capital. This can be physically registered in the National Court (KRS) or online through portal 24.
Association: this has to be established with two partners that can carry out autonomous activities in Poland. Like the company explicitly, the founding document is a contract with data of the partners and the company, including in the termination of the name the abbreviation “sp.p.”. It does not require a minimum amount of social amount. Its registration is done physically before the National Court (KRS).
Public Limited Company: this is constituted with two partners, a general partner and a shareholder that is responsible for the debts and activities of the company. The founding document is a notarial deed with all the data of the partners and the company, as well as their assets and the name of the company with termination “limited company” or “SKA”. The registration is made in the National Court Registry (KRS) and its minimum share capital is 50,000 PLN.
Limited liability company: you only need a founding partner. The founding document is a formal notarial agreement before the National Court (KRS). Now if it is a simplified company, its registration can be done online without notarial deed, through portal 24, the company name must have the termination “limited liability company” or “Sp. Z o. O”. Its share capital is a minimum of 5,000 PLN.
Joint Stock Company: this Company can be established with a single founding partner. The founding document is a statute in the form of notarial deed with the data of the founder and of the company, as well as the name of the same with termination “corporation” or “SA”. Its registration is physically done in the National Court Registry (KRS) and a minimum capital of 100,000 PLN is required.
If you wish to expand this information on the duties and rights of partners and shareholders, you can enter this government portal of the type of companies.
Procedure to open a company in Poland.
As we could see in the previous point, there are societies that can physically open an online. Basically the processes are the same for all societies, only the constitution requirements and the capital to contribute change.
Here we will explain both physical and online processes.
1.Write the founding document in Polish language or translated by a Polish government jury, the document must have the following information:
a. Company name with additional designation.
b. Company headquarters.
c. Description of the nature of the activity carried out.
d. Amount of share capital. e. Additional information, such as number and nominal value of the shares held by each shareholder, if the shareholders own more than one share.
f. If the duration is determined.
Before writing, consult the parameters of the founding document of each company in the Commercial Companies Code.
2.Gather the personal documentation of each partner such as passport, identity card, among others.
3.Owning the funds for the contribution of the share capital contributions may be made in cash or in kind (ie cash, card; contributions in kind are subject to the free disposal of the board of directors of the company).
4.Go to the town hall or the Business Registry Offices (KRS), you can go personally or send a lawyer with a power of attorney.
5.Submit documentation at the Business Registry Offices (KRS), as well as capital contributions and pay registration fees ranging from 500 to 1000 PLN. There they will give you a document called REGON (company number registration).
6.Pay the tax on civil law transactions (PCC). A PCC-3 declaration signed by the company’s board of directors must be submitted to the head of the competent tax office for the company’s registered office.
7.Process the NIP or taxpayer number at the tax offices with the company’s papers, so the company is registered in the National Taxpayers Registry.
8.Register the company in the ZUS Social Security Institution. If you are going to hire an employee you must send the NIP-8 application to Social Security, to enroll the employee.
9.Register as a VAT payer in the tax office near the company
So you can start trading with your company.
1) Create a user account on the S24 portal and create a business profile.
You can use the S24 portal after creating an account. You must enter your username and password each time you log in. As a user who is logged in, you can create company profiles that you own and see those for which another user has logged in.
An account on the S24 portal must have all the people who will sign the application for registration (that is, each of the members of the board of directors mentioned in the bylaws, which is not suspended or separately on behalf of each of them is a trial lawyer or representative of the member of the board of directors), as well as partners or persons representing them by signing the statutes.
2) Start of company registration.
You must first specify the name of your company. Then, after clicking “save”, you will go to the next screen, where you will find the necessary tabs to register the company. You will find them on the left (including documents, applications, correspondence). After clicking on the first one, that is, Documents, a set of standard documents will appear, which must be completed to register the company. Just choose those that are necessary to register your company; It will definitely be an agreement of the company and a list of partners.
As you complete the contract or founding document, six steps will appear that you must overcome and, in the end, the signature tab. Upon completion, you must provide, among others, list of partners of the company, list of members who become (either the partner himself or his representative), the business subject of the registered company (selection of the appropriate PKD), or choose the option of selling shares of the partners, as well as specifying how to represent the company and its organs. At this stage, we also specify the value of each share and the number that each partner will receive. This will automatically translate into the amount of share capital. You can still view and validate each document before signing it.
3) Signature of documents and application.
You can sign documents in S24 mode using:
- Qualified electronic signature (signature purchased from the qualified certificate provider)
- Signature of trust profile (to obtain this option, you must register on the Trust profile page).
You should remember that, depending on the composition of the bodies you designate, the subject of the signing of the documents will be different. The association agreement is signed by the partners. However, they can do it through the so-called standing people, that is, people who represent them.
In this case, a power of attorney will be required using the appropriate template. On the other hand, the board of directors of the company signs a declaration on the capital contribution, a list of partners or a request for registration in the Registry of the National Court. Company partners can enter the board of directors. Then they also sign the other documents, although not as partners, but as board members.
If the request is submitted by a legal representative, the document signing process will be automatically extended with additional declarations and documents that the representative himself signs.
4) Payment of the request.
You can also pay the registration fees online.
The S24 system will automatically transfer it to the ePayment electronic payment system, after the previous steps have been successfully completed.
Then, the “pay and send” button will be activated and click on it. The first screen that will appear will be the “payment summary for the service”. Check the payment details, payer details and user details here, and if they agree, click “continue.”
Then the “payment processing” tab will open, where you can choose between payment by bank transfer or payment / credit card. After clicking on the “pay” button, the electronic payment system changes, according to the payment method you choose, to the following tabs. Follow the electronic payment instructions.
5) Presentation of the company’s registration documents to the registration court.
The paid application will go to the registration court of your choice that is appropriate for the registered office of the company, which must consider such request within the day following receipt.
Then the registry court will issue you registration in the Registry of the National Court.
The board of directors of the company submits to the registration court within seven days from the date of its registration, if such declaration has not been attached to the notification of the company.
The statement must contain information that all partners made full cash contributions to cover the share capital. All board members must sign them. The filing of a declaration is subject to a judicial fee of 40 PLN.
7) Pay the tax on civil law transactions (CCP).
An appropriate PCC-3 statement signed by the company’s board of directors must be submitted to the head of the tax office competent for the registered office of the company.
You must also calculate the amount of the tax yourself and make your payment within 14 days from the date of the company. The tax base is the value of the share capital less the cost of registration in the Registry of the National Court and the announcement in the Court and the Economic Monitor (the handling fee is not deductible).
The PCC tax rate in the company’s bylaws is 0.5%.
8) Process the REGON and NIP numbers, taxpayer registration in the Social Security Institution.
It is done automatically on the basis of the applications presented during the registration of the company in the Registry of the National Court and, generally, takes a few days from this date. In S24 mode, neither the tax office nor the statistics office notify about the assignment of a PIN (tax registration) or REGON (company number registration) number in the traditional way.
The confirmation of assigning the NIP number (Fiscal Registry) will be a printed copy of the information of the Registry of the National Court, and in the case of a REGON number, a printed copy of the search engine of national economy entities located on the site CSO website.
In addition, you will receive a separate electronic notification about the assignment of the NIP and REGON numbers. To view them, after logging into the S24 platform, click on the “My company” tab and then on the “Correspondence” button.
The data will be automatically transferred to the Central Registry of Entities and the National Registry of Taxpayers, CSO and ZUS (social security) also during any change made subsequently by the company in the Registry of the National Court.
The obligation to provide an additional copy of the company’s bylaws and a document confirming the company’s right to use the premises or real estate has also been eliminated.
9) Send the NIP-8 request
Within 21 days. If, on the other hand, you intend to pay social security contributions, then this period is reduced to 7 days from the day the legal relationship that justifies insurance coverage arose (that is, from the date of hiring of the employee).
10) Send a registration request as a VAT payer.
At least 7 days before the first transaction. Therefore, this should happen before they begin to provide goods or services.
This process was expressly detailed online, because it is quite particular and not similar to that of any country in the world. Because the whole process is done on the internet, but you must know the Polish language to handle it.
Taxes to consider in Poland.
Fiscal legality in Poland is quite complicated and undergoes changes periodically. So the ideal is to instruct with a Polish accountant, with a finance license, to clarify all the taxes that you must declare and pay as a company.
Likewise, all tax and accounting information are in this link.
Taxes must be declared and paid at the finance delegation closest to your company. If your company was established online, taxes can be filed and paid online through portal 24.
In addition, there is a 15% corporate tax (for companies in their first year of activity or with a turnover of less than 1.2 million euros).
It should also be mentioned that companies have the right to deduct donations for public purposes, and to voluntary organizations up to a maximum of 10% of income.
The value added tax or VAT (in Poland it is called consumption tax) has a standard rate of 23%.
The VAT has a reduced rate of 8% for some goods and services such as pharmaceuticals and transport services and supply of goods for the social housing program (not exceeding 150 square meters). In addition, a reduced rate of 5% is applied to books, newspapers, unprocessed foods and staple foods.
There is also a zero-type VAT that applies to exports of goods to countries outside the European Union. Financial, insurance and educational services are also exempt from VAT.
There are also other taxes such as:
The tax of contribution right or tax on civil law transactions (PCC) which is 0.5% of the nominal value of the share capital. This was mentioned in the previous point.
Some specific intangible services have 20% retention on legal, accounting, advertising, market research, contracting, guarantees, among others.
Special tax on the invoicing of certain goods and tax on the extraction of some materials.
The real estate tax, which depends on the local authorities within the limits set by the Local Tax Law. The right to purchase or transfer the good has a cost of 2% and is exempt from VAT.
Social security is a big problem in Poland, it is very expensive. Because the employer’s contribution ranges between 19.48% and 22.14% of the worker’s gross salary, while the rate for the worker is 13.71% of his gross salary.
In conclusion, Poland is a country open to foreign investments, due to its non-demanding immigration regulations, and incentives for technological and industrial investors. Its company registration modernization scheme is unmatched, although it remains a bit complicated compared to that of the United Kingdom.
Likewise, there is the language barrier since they do not accept documents in English or Spanish, but with a sworn translation from a certified Polish translator. It also influences the amount of licenses and procedures to carry out economic activities, which makes it somewhat complicated.
Well this is our point of view on investments in this country, I hope you like this complete guide on Poland, which is quite extensive and requires reading it calmly.
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