Poland LLC Formation: Process, Requirements & Benefits

Overview: Start an LLC in Poland

‍Poland LLC Formation is the most popular business structure, offering numerous advantages for investors. Not only does it protect in case of business failure, but it also offers limited liability for company owners. Moreover, the process of incorporating and maintaining a Polish LLC is relatively straightforward, with accessible costs. If you’re considering opening an LLC in Poland in 2024, this guide will walk you through the necessary steps and requirements.

Why Start an LLC in Poland?

The LLC structure in Poland offers a reasonable compromise between liability limitation and the level of bureaucracy involved. It provides a safe and flexible option for both small and large investment ventures. Additionally, the taxation of LLCs in Poland is highly advantageous, with a corporate income tax rate of 9% for profits up to 2 million EUR and 19% for higher profits. This favorable tax regime makes LLCs an attractive choice for investors.

Procedure to Incorporate an LLC in Poland

To incorporate a Polish LLC, the following steps are necessary:

• Prepare Required Documents: Gather all required documents and information for the LLC formation process.
• Articles of Association: The Articles of Association can be signed either by a notary or online via a designated portal.
• Company Registration with the Company Register (KRS): Register the company with the KRS to obtain a KRS number.
• Tax Registration: Obtain a tax identification number (NIP) and register the company as a taxpayer.
• Statistical Registration: Obtain a statistical number (REGON) for the company.

Documents Required to Register an LLC in Poland

• Articles of Association: Clearly describing the firm’s structure, management, and operation.
• Proof of Identity: Passport or ID card of every shareholder as well as director.
• Proof of Address: Residential addresses of shareholders and directors.
• Tax Identification Number (NIP): Obtained from the Polish tax authorities.
• Declaration of Consent: If the firm’s registered address is not owned by the shareholders or directors, a declaration of consent from the property owner is required.
• Decision on Company Authorities: Designating individuals authorized to represent the company.

Requirements to Incorporate an LLC in Poland

To successfully open an LLC in Poland, certain requirements must be met:

Minimum Capital 

An LLC requires a minimum share capital of 5,000 PLN, which may be paid in cash or in-kind contributions.

Registered Office 

The company must have a registered office in Poland.

Shareholders and Directors

A Poland LLC must have a minimum of 1 shareholder and 1 director. Shareholders can be individuals or legal entities. There are no limits on foreigners serving as shareholders or directors. Directors must have a clean criminal record in terms of corporate and commercial offenses.

Taxation

The corporate income tax rate for LLCs is 9% for earnings up to 2 million EUR and 19% for higher revenue.

Benefits of Opening an LLC in Poland

• Limited Liability: The personal assets of shareholders are safeguarded, and their liability is capped at the amount they have invested in the business.
• Ease of Formation: The process of LLC formation in Poland is relatively straightforward.
• Access to EU Markets: As a member of the European Union, operating a business in Poland provides access to the EU’s vast consumer market.
• Favorable Business Environment: Poland offers a stable political and economic environment for businesses.

Taxation and Compliance for LLCs in Poland

Once your Polish LLC is registered, it is important to understand the compliance and taxation requirements. This knowledge will help you navigate the legal landscape and ensure smooth operations for your business.

Taxation

Polish LLCs are subject to corporate taxation based on their income generated within the country. The corporate income tax rate in Poland is fixed at 19%. It’s worth noting that withholding taxes may apply to dividends, royalties, and interest. However, these taxes can be reduced under a double tax treaty, if applicable.

Annual Reporting and Auditing

Polish LLCs, like other companies, must comply with annual reporting and auditing requirements. These obligations ensure transparency and accountability. It is essential to stay up to date with the reporting deadlines and fulfill all necessary obligations to avoid penalties or legal complications.

Employment Regulations

If you plan to hire personnel for your Polish LLC, it is crucial to comply with employment regulations. These regulations apply to both foreign and local workers. Familiarize yourself with the labor laws and obligations as an employer to ensure a harmonious and compliant work environment.

Main Taxes Applicable to LLCs in Poland

As a Polish LLC, you will encounter various taxes that apply to your business. Understanding these taxes will help you plan your finances effectively. Here are some of the main taxes you should be aware of:

• Corporate Income Tax: The standard corporate income tax rate is 19%, with a reduced rate of 9% available in certain cases.
  Dividend Withholding Tax: Dividends may be subject to a 19% withholding tax, which can be reduced through a double tax treaty or other applicable regulations.
• Value-Added Tax (VAT): The standard VAT rate in Poland is 23%. However, 8%, 5%, and 0% reduced rates are applicable for specific goods and services. Some goods and services may be exempt from VAT altogether.
• Social Security Contributions: Both employers and employees are required to make social security contributions. The combined contribution amounts to approximately 35% of the employee’s salary, with specific caps for each party (around 21% for employers and 14% for employees).

Costs Associated with Poland LLC Formation

• Notary Fees: There are certain fees associated with notarizing certain documents, such as the Articles of Association.
• Registration Fees: A fee is payable to the National Court Register for the registration of the LLC.
• Share Capital Contribution: The minimum share capital required for LLC formation in Poland must be contributed by shareholders.

Conclusion

Opening a Polish limited liability company offers numerous advantages, including limited liability for owners and accessible incorporation and maintenance costs. By following the necessary steps and complying with the legal requirements, you can establish a successful business in Poland. Remember to seek legal representation during the incorporation process and stay informed about the taxation and compliance obligations for Polish LLCs. With the right guidance and knowledge, you can navigate the business landscape in Poland with confidence.
For more detailed information and personalized assistance with opening a Polish limited liability company, reach out to our team of experienced consultants at OnDemand International. We provide comprehensive legal services, from company formation to ongoing legal consultation and support. Contact our team today to get started on your journey to establishing a successful business in Poland.