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Looking beyond Brexit - inward investment to Poland

How to do business in Poland – legal and tax perspective

By Michał Kulczycki, aplikant adwokacki and Ewa Guerri, manager, tax advisor, Accreo
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There are several legal ways to conduct business activity in Poland. The ultimate choice of the should be made base on various aspects, as size of the enterprise, type of business (sales, production, finance etc), scope of accepted responsibility (limited or unlimited) or tax burdens. The legal form of running a business should be always subordinate to business goals. The legal form of an entity may also change over the time – one may choose a basic form at the beginning and a more expanded form when the business is big enough. In any case, it is good to consult plans with a tax advisor (confidentiality in such case is required by the law).

Legal and tax experts of Accreo have prepared a comprehensive summary for potential investors, to offer insights about the possible forms of running a business in Poland.

Types of business activity in Poland

The economic activity of a foreign entity may take the form of:

•    Directly running a business activity in Poland on own behalf of the foreign entity – as a branch or representative office, or
•    Participating in a Polish entity (running its business and sharing its profits), which acts on its own behalf – formation of the company in Poland.

Branch and representative offices (running business on behalf of the foreign firm)

A department (zakład) of a foreign enterprise in Poland is a separate and independent organisational unit, functioning within the main enterprise (outside its registered office). A characteristic feature of a department is that it conducts business activity on behalf of the main enterprise. Conducting business in the form of a department is limited within the scope of the main enterprise. The main enterprise is the beneficiary of rights and obligations related to the department operations.


A foreign firm (with a registered office outside Poland) may conduct business in Poland even without establishing any separate company; it may do so by establishing a branch in Poland. Such a branch constitutes a separate organsational and financial unit of the foreign firm. A foreign firm establishing a branch is required to appoint a person authorised to represent the foreign firm in the branch. A branch should be registered in the relevant court register; registration procedure takes around two to three weeks.

Representative Office

A representative office may only carry out advertising and promotion of the foreign firm. A representative office may be established for two years with the possibility of extension for another two. A representative office must be entered in the register of representative offices kept by the Minister of Enterprise and Technology. The establishment of a representative office requires entry in the register of representative offices of foreign entrepreneurs.
From the tax perspective, profits related to the activity of branch/representative office in Poland should be taxed in Poland. The department should calculate revenues earned and costs incurred in Poland, and calculate the tax due.

Commercial companies (running business on its own behalf, but sharing profits with its mother company)

Rules for commercial companies are described in the Commercial Companies Code. There are six types of companies in Poland, which differ from each other in the scope of risk borne by the members, time of establishing and formalities of daily business operations.

Commercial companies are divided into:

•    capital companies (limited liability company, joint-stock company)
•  partnerships (general partnership, limited partnership, limited joint-stock partnership, partnership).

The main difference between them is the responsibility of the partners for the company's liabilities. In capital companies  the partners are not liable for the company's obligations.  In partnerships, it is possible for creditors to satisfy themselves from the assets of a partner – the owner bears responsibility with all their assets.

Limited liability company (spółka z ograniczoną odpowiedzialnością, or sp. z o.o.)

A limited liability company is one of the most frequently chosen forms of conducting business activity in Poland. It is characterised by the lack of liability of shareholders for the company's obligations. A limited liability company may be established by one or more entities. This form of business is recommended for investors who intend to take an active part in the company's activity and want to limit the risk connected with the invested capital.

The shareholders are not liable at any stage for the company's obligations. Possible liability for the company's liabilities may arise if a shareholder is at the same time a member of the company's management board and fails to report the company's insolvency within the statutory time limit.

Establishing a limited liability company is connected with the preparation of articles of association and filing an application to the appropriate register.

The articles of association should be made in the form of a notarial deed or in electronic form. If the articles of association are drawn up in electronic form, all formalities can be completed online. This way of establishing a company is more cost-effective. The court fee amounts to 350 złotys in the case of online registration and 600 złotys in the case of traditional registration. In the case of traditional registration, the notary's fee must be added to the costs.

The minimum share capital of the company is 5,000 złotys

A limited liability company can be established online within 24 hours. In practice, the registration time depends on the occupancy of the Registry Court, which makes the entry and is about two to three weeks (or longer recently due to Covid). There are firms that offer shelf companies.

Joint stock company (spółka akcyjna or S.A.)

A joint-stock company is a capital company with legal personality. Shareholders of a joint-stock company are not liable for the company's obligations. A joint-stock company is the most formalised way of conducting business. It is a recommended form of business for entities with a significant number of shareholders and for business ventures of significant size. This form of business is suitable for entities planning to enter the stock exchange.

As in the case of the limited liability company, shareholders are not liable for the company's obligations.

To establish a joint-stock company, the articles of association need to be drawn up in the form of a notarial deed registered in the registration court. The cost of filing the application is  600 złotys. The minimum share capital of a joint-stock company is 100,000 złotys.

The time taken to register a company is around two to three weeks from the date of filing the application with the relevant court of registration.

Partnership (spółka jawna)

A general partnership is a partnership that can be established by at least two entities. This form is dedicated to small-scale business. The company has no legal liability. It is characterised by high risk related to the liability of partners for the company's debts.

The partners of a general partnership are liable with all their assets for the company's debts. This means that if creditors cannot satisfy their claims from the assets of the company, they may satisfy them from the personal assets of the partners.

There is no minimum share capital requirement. The partners of the company are obliged to make contributions, which constitute the assets of the company. The amount of contributions may be arbitrary.

Two conditions must be fulfilled in order to establish a company:

•    conclusion of the general partnership agreement, and
•    registration by a registration court.

The general partnership agreement may be concluded in an ordinary written form or online through a dedicated system.

The partnership is established at the moment of entry in the appropriate register of entrepreneurs by the registration court.

Theoretically, establishing a company online should take 24 hours. In practice, the time taken to set up a company depends on the load on the court with jurisdiction over the company's registered office. Average registration time again is around two to three weeks for both online and traditional registration.

Limited partnership (spółka komandytowa)

A limited partnership is characterised by the existence of two types of partners, a general partner and a limited partner. Depending on the status of the partner, there are different rules of liability for the partnership's debts. Due to the limitation of liability for one of the partners, the partnership may be used for high-risk investments. The company is not a legal entity.

A limited partnership is an ideal solution for partners among whom one is involved in the affairs of the partnership and its actual activity, and the other wants to provide only financial contributions.

There are various risks involved in operating a limited partnership. General partners are liable with all their assets for the obligations of the partnership. Their role is to manage the affairs of the company and its representation.

Limited partners are liable with all of their personal assets, but only up to the amount of the so-called limited partnership sum. The minimum value of the limited partnership sum is not set by law, therefore it may be freely established.

Each limited partnership must have at least one general partner and one limited partner.

The cost of establishing a partnership is the same as for a general partnership. If the articles of association are executed in the form of a notarial deed, the cost of drawing up the deed by the notary must be added.

As in the case of a general partnership, two conditions must be met to establish a company:

•    conclusion of the articles of association
•    registration by a competent registration court

The establishment of a limited partnership is more formal, as the articles of association should be concluded before a notary public. A company may also be established online, in which case the services of a notary are unnecessary.

Average registration takes two to three weeks for both online and traditional registration.

Limited joint-stock partnership

A joint-stock limited partnership is a partnership whose structure includes at least two types of partners, such as a general partner and a shareholder. As with the limited partnership, the general partner is liable for the company's debts with all their assets. The general partner runs the affairs of the company. And as in the case of a limited partnership, a general partner is an active investor involved in the actual functioning of the company. A shareholder is a passive investor whose main task is to take up or acquire shares in the company.

In the case of a joint-stock limited partnership, partners bear the risk for the indebtedness of the company on different principles depending on their function in the company. The general partners of a limited joint-stock partnership are fully liable for the debts of the partnership.

The personal assets of the shareholders of a joint-stock limited partnership are fully protected. This means that the shareholders do not bear any liability for the company's debts.

Registration of a joint-stock limited partnership is the most expensive of all partnerships. To establish it, it is not necessary to conclude the articles of association in the form of a notarial deed. It is not possible to do this online. As in the case of other companies, the time for incorporation varies between two and three weeks.


Limited liability companies (sp. z o.o.) and joint-stock companies (S.A.) are subject to corporate income tax. The tax rate amounts to 19% (standard rate) or 9% (reduced rate for small taxpayers). When the profit after tax is distributed to its stockholders (in the form of dividends), it is taxed again with 19% dividends tax (however, exemptions from taxation of dividends may be applied, when certain conditions are met).

Other forms (partnerships etc.) are fiscally transparent, which means that company’s income is taxed only at the level of the owners, except for limited partnership (in this case taxation is a mix of transparency for some owners and double taxation for the other).

Choosing the right form of running business in Poland may be challenging and should be a well-thought-out decision! Getting it wrong means incurring unnecessary costs and wasting much time. As stated in the preamble of this article, it is recommendable to ask for a support of a professional advisor.


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