Poland LLC Registration
Are you looking to set up a business in Poland? If yes, then one of the first things that you must consider is to choose the type of business you would register in Poland. One of the most popular types of business entities in Poland is a limited liability company. Poland is a great place to establish a Limited Liability Company (LLC), as it has a favorable tax system, easy access to a competent workforce, and a prime position in Central Europe. One of the main benefits of setting up a limited liability company in Poland is that the shareholders are only liable for the amount they invested in the company.
In this article, we will be covering the procedure for Poland LLC registration. Further, we will cover other related aspects that you must consider if you wish to establish an LLC in Poland.
Reason to register an LLC in Poland
Investors are advised to invest in Poland LLC Registration using this form of corporate structure (Limited Liability Corporation) due to the following reasons:
- LLC is thought to be an acceptable compromise between security (liability restriction) and a degree of administrative rigor.
- LLC is quick to incorporate and register with KRS (Polish Companies Register).
- Fiscal treatment of LLC can be very beneficial. It is tax-free – 0 % of Estonian CIT or 9 percent of the profits that exceed 2 million EUR and 19 percent for higher profits.
- LLC is a flexible entity for both big and small investment ventures.
Procedure for Poland LLC registration
- The initial step in the process of registration for a limited-liability corporation in Poland consists of signing the document of incorporation as a notarial document, which has to be executed in Poland before the eyes of an official notary public. It is required to make a declaration of the shares of the company.
- LLCs operating in Poland have to be entered in the National Court Register (KRS). The application to be entered must be made on the proper form that is available on the court premises and the official website of the Ministry of Justice. The application for entry into the National Court Register will be reviewed and approved by the Court within 14 days of the date of the deposit.
It is important to note that the business acquires legal identity from the time that it is registered in the registry. A request for entry into the National Court Register is applied together with proof of payment for court costs and, if needed the costs for publication on the Court and Economic Monitor.
Requirements for Poland LLC registration
- For Poland company registration, a minimum of one shareholder is required.
- The minimum capital required to register an LLC in Poland is PLN 5000 and it has to be paid-up prior to the registration of the firm.
- The LLC has to be enrolled with the Polish Company Register and apply for a tax identification and REGON number.
- The LLC must also be enrolled for VAT.
The time frame to complete LLC creation
The length of time needed to form a limited liability business in Poland depends on the mode of incorporation:
- Online incorporation of companies may take about 1- 5 working days.
- Notarial incorporation can take about 1 to 3 months.
Ltd Liability Corporation within Poland -- The Key Facts
| The number of founders | At least 1 shareholder |
|---|---|
| The method of incorporation | Signature Articles of Association ● at the Notary's office; or ● the online via designated portal |
| Minimum share capital | 5.000 Zl due in cash or as a kind contribution |
| The minimum value for each share | 50 zl |
| Taxation of LLC | 9 percent of CIT with a profit of up to 2 million EUR over 19 percent, and alternatively, the CIT of 0 percent Estonian CIT |
| Who is eligible to be a Shareholder? | There are no restrictions. Foreigners can be shareholders. |
| Who is Director? | There are no restrictions. Foreigners can serve as Directors. Directors must have a clean criminal history n business and corporate crime. |
| Time to form | Online incorporation of 1 to 5 days or Notarial incorporation for 1-3 months |
| Auditing requirements | Obligatory if two out of three requirements are satisfied: ● employment exceeds 50 employees ● assets exceed 2.5 mln EUR ● revenues exceed 5 mln EUR |
| Reporting requirements | Obligatory -- once per calendar year, in the KRS (National Registry of Courts) |
| Shareholders' Liability | Shareholders do not have any liability for the Company's Company's debts |
Specifications in Polish Limited Liability Company
Polish Limited Liability company is an entity that is legal and independent, with a distinct legal personality apart from shareholders. In practical terms, it means that it can buy and sell items as well as keep credit and debts on its own.
Is it possible for non-EU citizens to manage a Polish business?
EU citizens can set up and manage companies in Poland LLC Registration without limitations. Non-EU citizens can also set up and manage a Polish business, however, in certain circumstances they must adhere to the limitations set by the law.
For instance, a Polish LLC Company with more than 50% capital that is not from the EU may buy a real estate property in Poland only after receiving permission from the Ministry of Foreign Affairs (or Ministry of Agriculture in case of agricultural property).
Capital shares for Polish Limited Liability Company
The minimum share capital for Polish Limited Liability Company is 5000 (PLN) (approx. 1103 EUR). The capital of the share may be financed through contributions in cash or non-monetary form (in-kind donations, e.g. the ownership of the movable or non-movable asset). Contributions cannot be offered as a service for the benefit of the business.
Representation of Polish Limited Liability Company
Polish Limited Liability Company is represented by Board of Directors. The Board should consist of one member. The Board is not limited to the number of Directors. Rules for representation are free of charge in the Articles of Association of the Company. A company could also be represented through a regular proxy (pelnomocnik) or an authorized proxy (prokurent).
Shareholders Meeting as well as Supervisory Board of Limited Liability Company
The supreme authority for the Polish Limited Liability Company is the Shareholders Meeting. A Supervisory Board in a Polish Limited Liability Company is only mandatory when the capital of the shares is more than 500.000 Zl as well as the total number of shareholders is more than 25.
Fiscal Treatment of Limited Liability Company
As each Polish LLC operates as a distinct legal entity and is taxed under corporate income Tax (CIT).
CIT is assessed on the total income of all sources (reduced through deductions) at an amount of 9% for earnings of up to 2 million EUR and 19% for more lucrative earnings. From January 1, 2022, Polish Tax Law provides 0 percent tax on profits retained (Estonian CIT).
Dividends that are paid out through the firm are taxed individually.
- The dividend must be distributed to shareholders that are not private persons (private individuals) — they are usually taxed as a withholding tax of 19 percent. However, dividends paid for foreigners (tax residents of foreign countries) are taxed following the applicable DTT (Double Taxation Treaty).
- The dividend may be paid to the parent company — it could be exempt from tax on dividends if the parent company owns at minimum 15% of the subsidiary’s share capital for a minimum period of two years and is subjected to no income tax obligation in Poland LLC Registration or another EU Member State or another state that is part of the EEA.
Liability in a Limited Liability Company
The shareholders of Polish limited liability company are not responsible for the obligations of the company and they are only responsible up to the amount they have invested in the company.
The directors of the Polish Limited Liability Company may be held accountable for the obligations of the company in the event of their failure to file an insolvency petition within the deadline set by the Polish Insolvency Law (i.e. within 30 days after the date the company went into insolvency).
Conclusion
A limited liability company is one of the most popular business structures in Poland as it provides limited liability to the shareholders. Poland LLC registration is a strategic move for entrepreneurs who are looking to set up their presence in Poland. With its growing economy, strategic location, and well-defined legal framework, Poland offers numerous opportunities for businesses.
At OnDemand International, we specialize in guiding entrepreneurs and businesses through the intricate process of registering a Limited Liability Company (LLC) in Poland. Leveraging our deep expertise and in-depth knowledge of the local regulatory landscape, we ensure a seamless and efficient registration journey. Our dedicated team of experts stands ready to assist you in every step, from initial consultation to gathering the requisite documentation. If you’re contemplating setting up an LLC in Poland, entrust your venture with the best in the industry – OnDemand International.
FAQ’s
Limited liability companies operating in Poland have to be entered in the National Court Register (KRS). The application to be entered must be completed on the proper form which is available at the court premises and on the official website of the Ministry of Justice.
A Poland LLC or Limited Liability Company is the most popular method of investment of a platform within Poland. As a distinct legal entity, The Polish LLC is accountable in respect of its legal obligations as well as loans, debts as well as judicial court judgments. The liability of shareholders is limited to their share of capital.
What is the time required to get my company registered in Poland? There are two options for registration: on the internet, which takes 1-5 days, or regular, with notary involvement which will take between 2 and 12 weeks.
Limited companies. The term “limited company” refers to one that is ‘ limited by shares or limited by guarantee.
If your company is a limited company, it has to be required to pay corporate tax on its earnings that result from trading as well as from the disposal of assets or investments. At present, the tax rate is 19 percent.
