Poland is one of the most attractive countries for entrepreneurs. Simple registration, a convenient tax system, a stable economy, and access to the EU market make it an excellent choice for starting a business.
But where to start a business in Poland? What nuances should you consider? Let’s go through all the details to ensure your business operates efficiently and without unpleasant surprises.
Choosing a Legal Entity Type
The first step in starting a business is determining the type of company you want to establish. This choice depends on your financial capabilities, business strategy, and Polish legal requirements.
In Poland, it is possible to conduct business without formal registration—this is not about operating illegally. The key condition is that your earnings must not exceed the minimum wage, which in 2024 is 3,225 PLN gross. While this can hardly be considered a full-fledged business, it is an option for those with small-scale income or side gigs.
For those planning a more structured business, Poland offers several legal entity types:
- Limited Partnership (Spółka komandytowa)
- Limited Liability Company (Spółka z ograniczoną odpowiedzialnością – Sp. z o.o.)
- Professional Partnership (Spółka partnerska)
- Limited Joint-Stock Partnership (Spółka komandytowo-akcyjna)
- General Partnership (Spółka jawna)
- Joint-Stock Company (Spółka akcyjna – S.A.)
Each structure has its own legal and tax implications, making it essential to choose the right one based on your business goals.
Company Registration – Steps to Take
Once you’ve decided on the type of company you want to establish, the next steps involve formal registration. Here’s what you need to do:
Define Key Business Details (to be included in the Articles of Association):
- Company name.
- Business location (where operations will take place)
- Share capital amount and ownership structure
- Number and nominal value of shares
- Company directors
- Business activities
Obtain an Electronic Signature for Document Authentication
This can be done through a Trusted Profile (Profil Zaufany) or a qualified electronic signature (Podpis kwalifikowany). These tools are essential for signing official documents online.
Submit a Registration Application
This can be done via the Court Register Portal (Portal Rejestrów Sądowych) or the S24 online system. Since July 1, 2021, all company registrations must be completed online.
During the registration process, other factors come into play, such as opening a business bank account. Different banks offer varying conditions, so it’s advisable to compare options before making a decision.
If your business involves international transactions, relying solely on a traditional Polish bank may not always be cost-effective. Exploring alternative financial solutions, such as fintech services, could help reduce transaction costs.
Business Taxes in Poland: What You Need to Know
When running a business in Poland, the three most significant taxes you are likely to encounter are CIT, PIT, and VAT. Let’s break them down:
Corporate Income Tax (CIT)
The Corporate Income Tax (CIT), or Podatek dochodowy od osób prawnych, applies to corporate earnings. The standard CIT rate is 19%.
However, Poland offers tax incentives to support business growth. For new companies and small businesses, the tax rate is reduced to 9%, making it easier for startups to develop.
Personal Income Tax (PIT)
The Personal Income Tax (PIT), or Podatek dochodowy od osób fizycznych, applies to individual earnings. The rates are as follows:
- 12% for annual income up to 120,000 PLN
- 32% for income exceeding 120,000 PLN
Alternatively, businesses can opt for a flat tax rate of 19%, though certain activity restrictions apply. In some cases, PIT can be calculated as a percentage of revenue, ranging from 2% to 17%, depending on the type of business.
Value-Added Tax (VAT)
The standard VAT rate is 23%, but reduced rates apply to specific goods and services:
- 8% and 5% for certain essential goods
- 0% for exports and some specialized services
VAT registration is mandatory for businesses with annual revenue exceeding 200,000 PLN. However, some companies may voluntarily register earlier to benefit from VAT deductions.
Mistakes to Avoid
- Lack of a Business Plan: Without a clear plan, financial and operational challenges are inevitable. It’s essential to estimate costs, taxes, and risks in advance.
- Wrong Business Structure Choice: If the company is expected to grow, registering a Spółka z o.o. from the start helps avoid personal liability for debts.
- Ignoring Tax Reports: Poland has strict financial reporting regulations. Missing deadlines can lead to fines.
- Incorrect Pricing Strategy: Poland has high market competition. It’s crucial to analyze the local market to set competitive prices.
You will never know if your business will be profitable until you try. However, carefully calculating all expenses in advance is essential—starting a business in Poland without a solid financial plan is risky.
A profitable business is built on numbers, not emotions. Develop a well-structured business plan, thoroughly analyze your target market, and take action!
We sincerely wish you success on this journey!
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