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 Investment in Poland - Piotr Smagala - Solicitor Law Firm
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Investment in Poland

Foreigner is understood as everyone who does not have Polish citizenship.

Economic activity - manufacturing, construction, trading, provision of services, the search for, identification and extraction of natural resources, as well as professional activity pursued for the purpose of gaining profit and conducted in an organized and continuous manner.

Foreigner investor – natural person from foreign countryundertaking economic activity in his own country and intend to conduct  economic activity in Poland.

In Poland, undertaking and pursuing economic activity shall be free and allowed to everyone on equal terms subject to conditions specified in the law.There are some differences between investors from EU and EFTA member countries and those from other countries. All commercial law companies and partnerships shall be registered in the register of the entrepreneurs of the National Court Register.



Individual economic activity

Commercial Partnerships

Capital Companies

Individuals jointly pursuing economic activity

Others forms

Sole proprietorship

Registered partnership

Joint-stock company

Civil law partnership

European Company


Professional partnership

Limited liability company


European Economic Interest Grouping


Limited partnership





Limited joint-stock partnership









Representative Office


Foreign investors undertaking economic activity in Poland are divided into:

1st. Investors from EU and EFTA member countries or from countries, which have entered into specific international agreements with the EU may conduct economic activity on the same terms as Polish citizens.

2nd. Other investors, who is not originates from an EU or EFTA member country or from a country that has entered into specific international agreements with the EU from may conduct economic activity on the same terms as Polish citizens only if they hold specific permits, legalizing their stay in Poland and allow them to conduct commercial activity, may conduct economic activity by establishing limited partnerships, limited joint-stock partnerships, limited liability companies and joint- stock companies and also investors can purchasing and acquiring shares in such companies.


In this partnership, there are two types of partners and they differ in terms of liability. The personal liability of certain partners is limited to a declared amount which is stated in the commercial register. Such partners are free of any liability above the amount of their contribution to the partnership. A limited partner can only represent the partnership to a limited extent set out in a power of attorney granted to him by the partnership. Such a partnership  distinguishes  between two  types of partner who differ  in terms of liability. The limited partner’s liability extends up to the amount agreed in the partnership agreement. The general partner is subject to unlimited liability and may be an individual or a corporation. The partnership is represented only by the  general partner. The limited  partners may only represent the partnership if grant-ed proper power of attorney.


This partnership has no legal personality. It is a hybrid of a joint- stock company and a limited partnership. The partnership deed must be drawn up by a notary; otherwise it will be null and void. Two types of partner are required to form this partnership: a partner whose liability for all the partnership’s obligations is not limited in any way and is regulated in the same way as in a registered or limited partnership and also a shareholder who is not liable for the partnership’s obligations but is obliged to acquire and pay up shares in the same manner shareholders in a joint stock company. The minimum share capital of such partnerships is PLN 50,000. The share capital may be paid up in cash or in kind. The partnership is represented only by the general partner. Shareholders have no powers of representation unless granted proper power of attorney.


Limited Liability Companies (LLC) are a highly popular form of structuring business activity in Poland. The LLC registration process is quick requiring few formalities. A limited liability company becomes operational directly after the articles of association have been signed. Until it is registered, how-ever, such a company is required to add to its name the term “in formation”. Furthermore, if the investor does not have enough time for the registration formalities, there is an option to buy an off-the-shelf company. Required minimum share capital is PLN 5,000 000 and it must be paid up in full before registration. The nominal value of one share may not be lower than PLN 50. A shareholder can hold either one share or more than one. The authorities of a limited liability company are the shareholders’ meeting and the management board. A limited liability company is managed by a management board required to comprise at least one individual and with no upper limit of members. The company needs to decide whether the members  of the management board are to act individually or jointly in terms of binding the company. Optionally, a limited liability company may also have a supervisory board to oversee the operations of the management board. The shareholders’ general meeting  represents the supreme authority in a limited liability company. In some cases, the articles of association may also extend the authority of the shareholders by setting a requirement for shareholders’ consent to validate certain management board decisions. LLCs may also be registered electronically within a single day, provided that all subscribers have electronic signatures issued by an authorized certification authority.


Joint stock companies are similar to limited liability companies. However, they are more formalized and  complex in terms of statutory governance. A Polish joint-stock company can be established by one or more founding members. The founding members agree upon and sign the joint-stock company’s articles of association, supply at least 25% of the initial capital, and make all the vital management decisions concerning the company before the management board and supervisory board are appointed. The articles of association should be drawn up in the form of a notaries deed and signed by the founding members. The minimum share capital is PLN 100,000. The nominal value of one share may not be less than PLN o,01. The formation of a joint-stock company involves: execution of the articles of association by the founding members, the shares being paid up in accordance with the law appointment of a management board and a supervisory board the company being entered in the commercial register. The main governing bodies of a joint stock company comprise its management board, the shareholders’ general assembly meeting and supervisory board. The supervisory board is appointed by the shareholders and in turn appoints the management board. A management board comprises one or more members. The articles of association should prescribe the rules for the company’s representation. Any member of the management board may be dismissed or suspended. A  supervisory board must  comprise at least three members. The  articles of association may provide that the management board requires consent of the supervisory board in the case of certain decisions. A  shareholders’ meeting  must be convened annually to decide on major issues affecting the company. The  company’s articles of  association may provide that  the shareholders are authorized not only to appoint and dismiss members of the supervisory board but also members of the management board. In some cases, consent of shareholders may be required to sanction proposals of the management board. A joint stock company can have a single shareholder. Both ordinary shares and preference shares may be issued.


Sole proprietorship is typically used for small businesses. It is simple to establish and may be undertaken by any qualifying individual. A person conducting business activity in this manner is personally liable for all  obligations arising from  such  activity. A register of sole traders is held by regional authorities. The registration takes place at the office competent as for the location of running  business.


A branch is registered in the commercial register, part of the Polish Court Register, under the name of the foreign investor together with the words "Branch in Poland". The branch can only conduct activities within the scope of the foreign investor’s business. The Minister of the Economy may prohibit a branch conducting activities in certain situations  specified by the law. Establishing a branch does not require any permits to be obtained from administrative authorities.


A representative office can only promote and advertise the foreign investor establishing the office.  No other economic activity may be conducted in this form. A representative office is registered in a special register of representative offices kept by the Ministry of the Economy. Registration may be refused in certain situations provided by law. Establishing a representative office does not require any permits to be obtained from administrative authorities.


Companies and commercial partnerships must be registered in the commercial register, which is part of the National Court Register kept by district courts. The commercial register is accessible to the public. The National Court Register is a nationwide database of all companies. This database is public domain with some information available online for free at krs.ms.gov.pl. Courts maintain files for all  companies which include financial statements, establishment deeds etc.

A partnership may start operating once it is entered in the commercial register. This does not apply to companies that can start operating before they are entered in the register. A register upon an application made by its management board. Any changes in data contained in the register must be reported to the court and must be entered in the register. An application for a company in the register or for data contained therein to be changed must be filed using a special official form available at krs.ms.gov.pl. The court is obliged to issue decisions to enter the company in the register or for changes to be made to the data therein within 14 days of an application being filed.

The registration of partnerships and companies in the National Court Register involves certain court fees. The first registration of the legal entity in the National Court Register is subject to the following fees: for both partnerships and companies the fee amounts to PLN 600 (includes PLN 500 for the registration and PLN 100 for the obligatory publication in the Court and Commercial Gazette).


For the company to become fully operational, the statistical office should be notified, whereupon the company will receive its own statistical identification number (REGON). The company will also need to apply to the tax office for a tax identification number (NIP). There is a requirement for a partnership to conduct a bank account.

Persons working under an employment  contract, contract of  mandate or managerial  contract also sole traders are obligated to covered the mandatory pension and disability insurance and  pay  monthly premiums to ZUS – the Social Insurance Institution. Insurance includes illness insurance – granting illness and maternity benefits and accident insurance – granting benefits. Accident insurance concerned injuries during the way to or from work and those becoming unable to work on account of an occupational disease. In general, social insurance does not apply to persons appointed to perform functions in management boards or supervisory boards or working on the basis of a contract for provision of specific work.





Personal income tax is levied on all natural persons earning income in Poland. Whether their foreign income is also taxable in Poland is decided by the nature of their tax liability which, in turn, derives from their tax residence: for persons with so called unlimited tax liability (Polish tax residents), all their income, both domestic and foreign, is taxable in Poland; this term applies to persons who:

• spend more than 183 days in Poland in the course of the tax year, or

• have their center of vital or economic interests located in Poland.

For persons with so called limited tax liability (i.e. non-residents), only income derived

from Polish sources is taxable in Poland.

The tax base is the taxable income, calculated as the excess of revenue above tax- deductible costs. Losses may be carried forward for a period of five years, with no more than 50% of the loss being deductible within a single year.


Taxable income may be reduced by up to 10% through deduction of the amount of donations to activities for public benefit or for the purposes of religious worship through deduction of 50% of expenditure on acquisition of new technologies from research and development entities used worldwide for no more than 5 years. This deduction does not affect the right to deduct depreciation write downs on the value of acquired technologies.


Value Added Tax (VAT) is a turnover tax that is generally  levied on the supply of goods and services made by an entity conducting business activity . Also subject to VAT is the importation of goods (from outside the EU) and export of goods (outside the EU). VAT is designed to be paid  by the end consumer. The system aims for VAT registered trading entities to be  tax-neutral by offsetting VAT paid on  purchases (input VAT) against VAT charged on turnover (out- put VAT), with the balance being paid to the Tax Office. All sales conducted by VAT-registered entities must  be duly documented with  VAT invoices and reported to the Tax Office on a prescribed basis.


In respect of taxation of foreign income, relevant Double Taxation Treaties apply and are deemed superior to domestic tax legislation.

 The CIT Act lists a number of entities subject to CIT. This includes:

• legal persons (e.g. limited liability companies, joint stock companies)

• legal persons acting as  partners in commercial partnerships

• foreign commercial  partnerships, if they are deemed as legal persons in their country of  registration and are subject to unlimited tax liability in that country

• tax capital groups.

Currently, the standard VAT rate is 23%. However, there are also reduced rates of 8% and 5% applied to certain classes of goods and services. Some goods and services are tax exempt; these include a range of financial and insurance services. There are also some types of activities which are not subject to VAT.



As a general rule, all income is taxable. Income is assigned to specific sources of revenue  (i.e.  employment, self-employment or capital gains). Taxation rules and rates may differ depending on the particular source. Taxable income is defined as the excess of revenue over the tax-deductible cost within a tax year. In some cases (e.g. dividends) tax is levied directly on the revenue itself, disregarding the costs. Tax-deductible costs for each source of revenue are defined as all expenses incurred for the purpose of  earning revenue and maintaining or securing the source of revenue with exceptions listed in the PIT Act.


A VAT payer is obliged to account for, pay and report  VAT on a monthly or  quarterly basis. Each taxpayer is obliged to account for and pay VAT no later than the 25th day of the following VAT period. VAT is declared on returns (VAT-7) that are filed with the Tax Office. Taxpayers are also obliged to record their transactions in VAT registers for each accounting period. The compliance process can be outsourced by the taxpayer to an entity specializing in tax accounting services.



In general, PIT is  calculated as a percentage of taxable income which, in turn, is the excess of revenue over the tax-deductible costs. This may be further reduced by such costs as the amount of obligatory social insurance premiums paid in Poland or other member states of the EU, EEA.




The amount of tax calculated in this manner may be reduced by a part of obligatory social insurance premiums paid in Poland or another EU member state. The progressive scale applies to the majority of income earned by natural persons, e.g. from employment contracts or contracts  of mandate. However, persons conducting business activity may opt for flat-rate  taxation. In the case of certain income earned by natural persons who are not resident for tax purposes, 20% flat rate tax is applicable.







1.Schengen visa marked “C” (referred as: “Schengen Visa”) is issued by a Schengen State for transit through Schengen countries (for list of the Schengen countries please see point III below) or for intended stay in Schengen States not exceeding three months in any six month period from the date of first entry into Schengen States.

2.Application for Schengen Visa must be submitted no earlier than three months before the planned visit.

3.A foreigner who wishes to extend his stay under the Schengen Visa is required to apply for a visa extension at least 3 days before the expiry of the period of stay identified in the visa. 

The authority competent to extend the Schengen Visa is a voivode (“wojewoda”) competent for the place of residence of the foreigner.


In cases where the foreigner has shown that due to force majeure or for humanitarian reasons it is not possible for him to leave the territory of the Republic of Poland before the expiry of a Schengen Visa or before the end of the authorized period of stay, or if the foreigner stays in a hospital, the application may be submitted on the last day of the period of stay identified in the Schengen Visa.

Nevertheless, the period of stay on Polish territory on the basis of the extended visa shall not exceed the maximum period of stay provided for a given type of visa

4.Schengen Visa may be issued for: 

a) work in a period not exceeding 6 months within the next 12 months, based on the statement of intent to entrust work, registered in the poviat labour office;

b)work as a driver for international road transport;

c) work on the basis of documents other than the above statement or work other than driver.


Work visas allow for stay on Polish territory and work, subject to obtaining a work permit, if required.


Schengen Visa for work can be issued to a foreigner who submits a work permit for Polish territory, or a written statement by the employer of his intention to entrust work to a foreigner, if work permit is not required.