PolandCompliance and Regulations to Take Note Incorporating in Poland as a foreigner

August 25, 2023by Tetra Consultants0
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  • Starting a business in Poland as a foreigner can be a tedious and complicated process for many due the many legal, regulatory and administrative requirements involved. However with the assistance of Tetra Consultants the complexity of company incorporation can be simplified and streamlined to ensure a seamless incorporation process. 
  • Tetra Consultants is your global trusted partner that specialises in providing comprehensive support and guidance to foreign entrepreneurs register company in Poland. By leveraging their in-depth knowledge, extensive experience, and personalised approach, Tetra Consultants ensures that the process of company incorporation becomes hassle-free and straightforward for their clients. In this article, we will explore the compliance and regulation matters business owners seeking to incorporate in Poland should take note of. In order to best navigate the intricacies of the local business landscape with confidence and ease.

Share Capital Requirements 

  • Share capital refers to the amount of money that shareholders have committed to the company. Based on the company structure that the business owner is incorporating as, the minimum amount of share capital required will vary. Some examples include:
  • PLN5,000 for limited liability companies
  • PLN100,000 for joint-stock companies
  • PLN1 for simplified joint-stock companies
  • PLN50,000 for limited joint-stock partnerships. 
  • No limits exist in respect of other organisational forms.

As for the payment of the minimum share capital in Poland, it can be done one of two ways: 

  • Either through full payment of cash or in-kind contributions by the shareholders. In-kind contributions refer to assets such as physical property, intellectual property, on the rare occasion, a certified appraiser may be required to confirm the value of contribution by the shareholder to the company. 
  • Cash payment can be done through depositing the minimum share capital amount into a bank account. Upon completion of company registration, the share capital can then be released and transferred to the company’s operating bank account for business operations. For company structures that possess limited liability and joining stock companies, the amount of liability the shareholders have is the amount of share capital contribution.

Taxation and Accounting 

  • Taxes and accounting standards vastly impact the operations and profitability of a business in Poland for foreigners. As a result, it is vital that newly incorporated companies are aware of the required accounting standards in Poland, the relevant taxation and accounting bodies and lastly the different taxes involved post company incorporation here in Poland. Some examples of the type of taxes and their amounts are:
  • Corporate Income Tax: set at a flat rate of 19%
  • Value-Added Tax (VAT): The standard VAT rate in Poland is 23%, with reduced rates of 8% and 5% applicable to specific goods and services.
  • Personal Income Tax: Employees are subject to Personal Income Tax on their salaries, with progressive tax rates ranging from 17% to 32%, depending on the income level.
  • Withholding Tax: Certain types of payments, such as dividends, interest, and royalties, may be subject to withholding tax, which is generally set at a rate of 20% unless reduced by tax treaties.
  • Accounting: Accounting standards in Poland refer to how financial statements must be prepared in accordance with the guidelines stipulated by Polish Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) for certain entities. It should be noted that companies are required to prepare annual financial statements consisting of balance sheets, income statements, cash flow statements and relevant accompanying notes.
  • Statutory audits may also be required depending on the size and type of the company. Audits are generally mandatory for large companies or entities exceeding a certain threshold. It is expected for companies incorporated in Poland to maintain proper accounting records and file annual tax returns. 
  • Additional compliance reporting may apply such as intra-EU trade which is the trade activities between Poland and other European Union member states. When participating in intra-EU trade, certain compliance reporting requirements must be upheld such as, intrastat reporting, VAT reporting, EC sales list, recapitulative statement and more.

Permit and Licence

  • When starting a business in Poland as a foreigner, it may be necessary to apply for specific permits and licences due to the nature of the company or industry. These permits and licence may be a result of the industry specific requirements. Some examples include:
  • Financial Services: specific industries such as banking, insurance or investment advisory may require you to obtain a financial licence through regulatory bodies such as Polish Financial Supervision Authority (Komisja Nadzoru Finansowego).
  • Healthcare: businesses in the healthcare sector operating medical clinics and pharmacies may need to comply with regulations from the Ministry of Health.
  • Transportation: businesses in transportation sectors like road transport, shipping or aviation may be required to obtain permits of licences from authorities such as the Ministry of Infrastructure (Poland) or the Civil Aviation Authority.
  • Food Services: food establishments such as restaurants, cafes or manufacturers must comply with the hygiene and safety regulations set by the government, this includes obtaining a permit to operate from Chief Sanitary Inspectorate (Główny Inspektorat Sanitarny).
  • In addition to company registration, certain business activities may require a separate registration for licences. Examples of certain business activities that may require registration are:
  • Retail Sales: you may be required to register with the local trade office and obtain a trade licence.
  • E-commerce: depending on the nature of the business, you may be required to register with the data protection authority and comply with e-commerce regulations.
  • Import/Export: you may be required to register with the customs authorities and obtain an Economic Operator Registration and Identification (EORI) number.
  • Manufacturing: you may be required to obtain permits related to building and construction, environmental regulations, occupational health, safety standards and more.

Data Protection and Privacy

  • Businesses dealing with confidential or customer data should know about the regulations regarding data protection and privacy in Poland. Some key points to take not of are:
  • General Data Protection Regulation (GPDR): is a comprehensive data framework applied all over the European Union to ensure companies handle personal data responsibly.
  • Under the GDPR, businesses are either classified as data controllers or data processors. A data controller decides the purpose of processing personal data while a data processor processes personal data on behalf of a data controller.
  • Consent and Lawful Basis for Processing: personal data should be processed on a lawful basis and only given freely and with consent. 
  • Data Protection Officer: in certain cases, businesses are required to appoint a data protection officer to oversee the processing of personal data and be the point of contact for data related subjects to the authorities.
  • Data Breach Notifications: businesses dealing with personal data must have existing processes in place to detect, assess and report personal data breaches to the relevant authority typically within 72 hours.

Conclusion

  • When starting a business in Poland as a foreigner, navigating the regulatory and compliance landscape when incorporating a business in Poland is essential for ensuring a smooth and legally compliant establishment. Poland has a well-defined set of regulations governing various aspects of business incorporation, taxation, accounting, and licensing. 
  • Amidst these complexities, Tetra Consultants stands ready to assist throughout the entire process. With our expertise and in-depth knowledge of the Polish market, we provide comprehensive support, from company incorporation to corporate bank account opening, nominee director services, tax and accounting services, and even offshore financial licences applications. Our commitment to excellence and attention to detail ensure that your business incorporation in Poland is seamless and in full compliance with regulatory requirements.  
  • Contact us to know more about company registration in Poland and our team will revert within 24 hours.

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at enquiry@tetraconsultants.com for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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