Employing in Poland: What You Need to Know
Polish employment law appears complex and confusing when looking from outside view although in some ways there are many similarities to other countries. The following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Poland.
Key Factors to Consider When Employing in Poland
There are several key areas to be aware of within Poland’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
Employee Entitlements
| Information | Explanation |
|---|---|
| Working on Sundays ? | In Poland working on national holidays and Sundays is prohibited and employees show have these days as official days of no work, however there are many exceptions to businesses in certain circumstances emergency services. Shops, restaurants, hotels, transportation and hospitals may open on Sundays, yet not on National Holidays.
Employees that work under the weekend working time schedule may work both Sundays and national holidays, and can carry out up 12 hours work time a day, which is 4 hours longer than the national legal limit of workers.
Any worker that does carry out work on a national holiday or Sunday can be rewarded by either a day off in lieu, or when not possible, an additional pay premium paid at the same rate as overtime working.
If an employee is carrying out Sunday work on a regular basis then their employer must ensure that the employee has one Sunday off for every 4 that they work.
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| Time Off Work ? | All employees are entitled to an annual unbroken paid vacation. An employee who is just starting his working life attains the right, in the calendar year in which he starts work, to vacation with every month that passes of 1/12 of the total vacation to which he is entitled after one year of work. An employee gains the right to the next vacation in each subsequent calendar year.
Vacation entitlement is as follows:
1. 20 days – if the employee has been working for less than 10 years
2. 26 days – if the employee has been working for at least 10 years
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| Medical Leave ? | While an employee is unable to work because of:
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Employment Termination
| Information | Explanation |
|---|---|
| Termination of Employment ? | Upon the termination or expiry of an employment relationship, the employer is obliged to issue a work certificate to employee immediately. The issue of the work certificate may not depend on the previous settlement of accounts between the employee and the employer.
The employer is obliged to issue the employment certificate within 7 days after termination of employment relationship
1. Period of notice for a contract for a trial period
a. 3 working days if the trial period does not exceed 2 weeks,
b. 1 week if the trial period is longer than 2 weeks,
c. 2 weeks if the trial period is 3 months
2. Period of notice for a contract for an indefinite period of time- the period of notice for an employment contract concluded for an indefinite period of time depends on the employment period with a given employer and amounts to:
a. 2 weeks if an employee has been employed for less than 6 months,
b. 1 month if an employee has been employed for at least 6 months,
c. 3 months if an employee has been employed for at least 3 years.
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GEO Solutions or DIY Employment in Poland?
Companies entering Poland must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Poland Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Polish entity established that can run payroll.
A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
Outsourcing Employment Through a GEO Employer of Record Service
Using Shield GEO Employer of Record Services in Poland
Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Poland. For companies which intend to employ their staff directly through their incorporated Polish entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Poland.
As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Poland. The Shield GEO solution is an attractive alternative where
– the company is looking to employ staff quickly
– the company doesn’t have an appropriately incorporated entity in Poland
– the company wants to work within a defined budget
– the company wants to limit its initial commitment in Poland
– the company needs help with tax, employment, immigration and payroll compliance in Poland
Shield GEO can contract directly with the company to employ and payroll their staff in Poland. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits. Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.
Payroll
| Payroll | Poland |
|---|---|
| Management Fee for Employer of Record Services / Monthly Payroll Costs | Please contact us for a quote |
| Notes | Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities. |
| Currency ? | The Polish currency is the Polish złoty (PLN) with 1 PLN equivalent to approximately 0.25USD. |
| Tax | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Income Tax Rates | Poland utilises a progressive income tax system. Residents are taxed on their worldwide income if they have lived in Poland for over 183 days, otherwise they are not. |
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| Tax Returns Supplied | Yes |
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| Corporate Tax Requirements | Corporate income is taxed at 19%. |
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| Employers Social Security and statutory contributions |
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| Employees Social Security and statutory contributions |
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| Can supply private health care | Yes |
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| Can assist opening bank accounts | Yes |
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Work Permits
| Work Permits | |
|---|---|
| Can Sponsor Work Permit |
Yes |
| Work Permit cost | €2,750 |
| Work Permit processing time | 10-12 weeks |
| Work Permit process |
It takes around 10-12 weeks to secure a Work Permit in Poland. The processing costs are and €2,750 through Shield GEO’s local partner. Documentation required (Employee): Copy of the personal pages of the applicant’s passport, CV, passport photos, copies of degree/diploma/professional certificates and copies of professional references (may need to be notarized/apostilled depending on nationality). All documents need to be translated into Polish. Client will also need to provide a detailed job description in both English and Polish. |
| Can Work Permit be processed in country | No |
| Switch Business Visa to Work Permit? | No |
| Can Spouse work on dependent visa? | Yes, once the marriage is registered with the Civil Registry Office, a spouse may stay on a temporary residence permit which can be extended. |
Business Visas
| Business Visas | |
|---|---|
| Can do Business Visa | Yes, for non-visa exempt nationals. All non-visa exempt nationals require a Business Visa. |
| Business Visa Cost | €500 |
| Business Visa processing time | 5-7 days |
Payroll and Tax in Poland
Poland is largely still undertaking the modernisation of its electronic payment systems, which makes payment to foreign employees complex at times as many employers continue to pay in cash. While there is no payroll tax in Poland, foreign companies are required to comply with Polish tax laws, primarily in regards to individual income tax, social security, withholding tax, and sales tax.
| Information | Explanation |
|---|---|
| Remote Payroll ? | A remote payroll in Poland is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Poland. One of the options available for a non-resident company to payroll its employees (local and foreign) in Poland is to use a fully outsourced service like a GEO or FESCO which will employ and payroll the staff on their behalf. |
| Local Payroll Administration ? | Most employers in Poland utilise the country’s electronic clearing system, ELIXIR, to submit employee payments, while many others still pay in cash. In order to use ELIXIR, the employer needs to have a Polish bank account and a local signatory with the authority to represent the company. Unlike many other countries, personal income tax deductions collected through payroll in Poland are the same for all employees, rather than a ‘pay as you go’ model. |
| Internal Payroll ? | Larger companies with a commitment to Poland may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in-country human resources personnel who have the background needed to manage a Polish payroll, and can fulfill all tax, withholding, and payroll requirements. This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Polish employment laws. |
| Fully Outsourced Payroll & Employment ? | Companies can outsource the employment and payroll of their staff in Poland to a GEO, like Shield GEO. This is possible for both foreign workers and Poland nationals. This is the easiest, fastest and safest way to payroll staff in Poland. Shield GEO manages all aspects of payroll for workers in Poland, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client. Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips. Read more about outsourced payroll and employment through Shield GEO. |
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Setting up payroll in Poland
| Information | Explanation |
|---|---|
| Currency ? | The Polish currency is the Polish złoty (PLN) with 1 PLN equivalent to approximately 0.25USD. |
| Employee Information Required ? | When taking on a new employee, employers need to know a range of information about the individual they are taking on. This information will allow the employer to know more about the employee them self and be able to send them information via post and their salary to their bank account.
Employee information:
These are just some of the basic details in which are required for employers
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| Tax Registration Requirements ? | Polish employers must be registered in KRS (National Court Register) or CEIDG (Central Register and Polish employers must be registered in KRS (National Court Register) or CEIDG (Central Register and Information on Business Activity).
KRS and CEIDG are responsible for sending adequate application forms to the Tax Office, ZUS (Social Security
Institution) and GUS (Statistical Office).
Every time when employing new person, employer is obliged to register new employee in ZUS within 7 days.
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| Social Security Registration ? | FOR EMPLOYER WITH SEAT IN POLAND – official Polish registration documents are required, such as NIP, REGON, KRS. Payers of contributions are required to prepare and provide to the Social Security Office notification of payer
contribution on the appropriate materials within 7 days from: date of firm employment of employee or arising legal relationship justifying inclusion of pension insurance and/or health insurance of the first person.
In Poland, social security consists of:
Social insurance may be mandatory or voluntary. All people in active employment, that is, employees, the self-employed and farmers, are covered by mandatory insurance. Reporting these people to social insurance is the responsibility of either those who pay the contributions (employers), or, for the self-employed and clergy, of the individuals themselves.
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| Documentation Required for New Employees ? | An employment contract is concluded in writing and should be signed no later than on the day the employee starts working. If no contract is signed, then the employee should be provided with written confirmation of the contract conditions on the day he starts work at the latest.
Any changes in employment contract conditions should also be made in writing. The employer should include additional written information about certain engagement terms to the employment contract. Labour Code provisions set out the regulations that should be included in the employment contract and in the additional written information.
Types of employment contract – an employment contract can be signed:
1. for an indefinite term
2. for a fixed term
3. for the time it takes to complete a specific task
4. to replace an employee – in the event of his or her justified absence from work;
5. the employer can hire another worker under a fixed term employment contract for the period of absence
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Payments
| Information | Explanation |
|---|---|
| Payment Mode ? | The payment of employee salaries can be made in a range of different way in the work place. Large scale companies, which employ a number of employees, may generally opt for Electronic Payments. Electronic payments allow the employer to pay each individual their wages in a fast and accurate way, which is important when needing to make a range of payments at one time. Small employers with only a few employees may choose to pay salaries using cash.
Another way of paying salaries is to use cheques; however cheques are becoming more unpopular and are soon to be taken out of use.
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| Frequency of Salary Payment ? | Employers in Poland can choose from range of different frequencies in which to their employees salaries.
These frequencies include:
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| Invoice / Payslips required ? | Yes |
| Minimum Wage ? | Yes |
Immigration and Work Permits in Poland
Foreign workers are required to have the proper visas and work permits in Poland, as established by immigration laws. Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the Polish market. Poland is known for typically being quite inflexible with its visa arrangements for foreigners, and visas will only be granted if no suitable Polish candidate can be sourced for a position. If you have yet to complete the incorporation process you can use an outsourced management company or GEO Employer of Record to sponsor the employee for the necessary permits.
Have your own company?
It is possible for companies that have established limited liability or joint-stock companies, or limited or limited joint-stock partnerships, to arrange visas for their workers. The relevant visa is Work Permit C, for foreigners who perform work in Poland for a foreign employer for a period exceeding 30 days, as long as the conditions of their employment align with the conditions stipulated within the Polish Labour Code. Permits are issued by the Province Governor. Work permits are valid for a maximum one year and are only valid if the applicant performs the work specified in the permit.
Non-EU residents must apply for a work permit if they wish to work in Poland. There are various exceptions, including:
- Individuals with refugee status
- Permanent residents of Poland
- Beneficiaries of temporary or humanitarian protection from Poland
- Victims of human trafficking
- Individuals performing scientific research for at least 30 days per year
The steps to apply for a work permit in Poland are as follows:
- Employer carries out labour market test
- Employer begins application for foreigner’s work permit
- Upon successful application, the Voivode will issue the work permit, at which point the applicant may begin undertaking employment
1. Labour market test carried out by employer
Employers must carry out a labour market test to acquire information about the circumstances surrounding employment in the local labour market. This test must confirm that there are no eligible Polish or EU nationals who could be employed in a given position.
The process is as follows:
1. Employers submit notification of vacancy to the County Labour Office.
2. The Labour Office then analyses the records of all unemployed people and job seekers
3. If the analysis determines that there are sufficient persons meeting the job requirements, the Labour Office will undertake its own recruitment amongst these individuals.
4. Remuneration proposed by the employer is compared to the remuneration that could be obtained in the same or similar position for similar work by the Labour office. These sums must be similar
5. The County Commissioner will issue the relevant decision.
6. If appropriate, the governor will issue the decision to the employer who is then able to apply for a work permit and temporary residence permit on behalf of the foreigner.
The labour market test does not need to be carried out in the following circumstances:
- The work is included in the list of occupations which are in great demand – these are specified by the local Voivode
- A work permit is being extended for the same foreigner for the same job
- The foreigner is a citizen of a country bordering Poland or with which Poland works cooperatively on labour immigration, with the intention of working as a domestic worker or caregiver, OR performed work with the same entity for the last 3 months minimum with the intention of the job being entrusted to them
- The foreigner is undertaking employment within a domestic household.
Fees: Varies based on the Voivodship
Time:
- If nobody can be recruited from the Polish unemployed and job seekers, within 14 days
- If recruitment amongst those registered with the Labour Office is possibly, within 21 days
2. Employer begins application form for foreigner’s work permit
Employees may only receive work permits provided the following conditions are satisfied:
- The conditions of employment are equally, or more, favourable under the provisions of the Labour Code and other employment regulations
- Remuneration is not lower than the average monthly wage by more than 30% – this information is provided by the Voivodship Office
- Documentation proving the above are provided
The employer must submit a completed application form along with the following documents:
- Up-to-date records of economic activity and an extract from the National Court Register to confirm the employer’s legal status
- A company deed or company establishment notarial deeds, if the employer is a limited liability company or joint stock company respectively
- Proof that the applicant has health insurance
- Copies of the passport pages containing travel data for the applicant
- A copy of a statement of profit or loss incurred by the employer
- A copy of a contract pursuant to which a service is provided in Poland
- Proof of payment of application fees
The relevant forms can be found at the website of the Department of Civil Affairs and Foreigners of Malopolska Regional Office.
3. Other obligations of the employer
Aside from completing the application form for the foreigner, the employer must also:
- Inform the foreign about the steps required to issue a work permit and any other events which may affect this procedure
- Exercise due diligence in the procedure for issuing and extending the validity of the work permit
- Implement the conditions of the contract with the foreigner which are set forth in the work permit application. This contract must be in writing and if necessary, translated into a language which the applicant can comprehend before being signing
- Inform the Voivode about the foreigner failing to undertake work within 3 months of the work permit commencement, or completion of work more than 3 months before its expiry, or any changes in the foreigner’s job duties
If employers do not comply with these duties and are found to be in breach, they must immediately rectify their mistake, otherwise risk penalties of between PLN 3,000 and PLN 5,000.
Time: The entire process generally 3-4 weeks for approval, but may extend to up to 8 weeks.
Fees:
- PLN 50– in the case of application for a work permit for a period of up to 3 months,
- PLN 100– in the case of application for a work permit for a period of more than 3 months,
- PLN 200– in the case of D-type application (for an employee delegated for the purpose of providing an export service)
Once the work permit is issued, one copy is retained by the Voivodship Office, and two are transferred to the employer, who is required to issue one copy to the foreigner.
4. Work permit is issued
The employee may commence work if a work permit is successfully issued.
Use the Shield GEO Employer of Record Solution?
It takes around 10-12 weeks to secure a Work Permit in Poland.
The processing costs are around €2,750 through Shield GEO’s local partner.
Documentation required (Employee): Copy of the personal pages of the applicant’s passport, CV, passport photos, copies of degree/diploma/professional certificates and copies of professional references (may need to be notarized/apostilled depending on nationality). All documents need to be translated into Polish. Client will also need to provide a detailed job description in both English and Polish.
The process for obtaining a Work Permit for Poland once the above documents are received is as follows:
- Shield GEO’s local partner and the employee sign a local employment contract (labour contract).
- Position is advertised for 2 weeks.
- Application is then lodged with Polish Immigration in the country of origin of the applicant.
- Once the application is approved, candidate can then enter Poland to commence their assignment.
Types of visas in Poland
| Category | Description of Visa |
|---|---|
| Work Permit (Type A) | Work permits are required to work legally in Poland if an individual is: The following documents are required and must be supplied in Polish: |
| Work Permit (intra-company transfer) (Type C or E) | This permit is intended for foreign individuals who work for a foreign employer and have been sent to Poland to work at one of the employer’s branches or plants. |
| Business visa (Schengen Visa C or D) | A Schengen visa is required to visit Poland for business purposes. To apply for a Schengen visa, the following information is required: The type of visa required is dependant on the length of the stay – C visas are suited for stays under 90 days whereas D visas are for stays exceeding 90 days. It is sometimes possible to convert from a business to employment visa. |
| Freelance/entrepreneur visa (temporary residence card) | This type of visa is valid for up to 2 years and can renewed before expiry. The approval process usually takes between 10 and 60 days. |
Setting up a company in Poland
When setting up a company you may want to consider these factors:
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Business factors
Business factors need to be considered, such as:
- The industry and type of business
- Nationality of the headquarters/individual(s) and
- Presence of existing trade agreements or relationships
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Location
Location will be another factor. Separate cities and regions may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.
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Geography
Geography may be an issue. At present, Poland is lacking in its transportation systems, with weak road, railway and infrastructure network, which increases the cost of doing business due to the difficulty of accessing each regional Polish market. Internet access is generally good in urban areas, although can be poor in less populated areas.
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Regulation
Regulation has long been an issue in Poland, a country known for an inefficient commercial court system, rigid labour code and heavy red tape. These have all historically proven challenges to foreign companies.
Setting up and carrying out business in Poland as a foreigner is highly regulated. Entrepreneurs from non-EU countries may only establish and operate a business in the form of a limited liability company, joint-stock company or limited partnership. Investors may also choose to purchase an existing company. Entrepreneurs from EU countries are able to set up any type of company, the same as Polish citizens. It is also possible to set up a branch or representative office.
Before choosing which legal form of business to set up, entrepreneurs should consider the scope of responsibilities, running costs, size of the business, etc. Limited liability companies are the most popular type for foreigners.
Limited Liability Company
This is the most popular type of business set up by foreigners in Poland, and are intended for larger business ventures. Shareholders are only liable to the amount of share capital they hold.
To establish a company, share capital of PLN 50,000 is required.
In addition, it is necessary for the new company to obtain a REGON (statistical number), NIP (tax identification number) and register for VAT payment.
Steps Required:
- Partnership must be entered in the Polish Court Register
- Obtain Certificate of Approval,
- Post- Registration Procedures.
Time: 4 months
The steps to set up a company are as follows:
1. Execution of articles of association, which may be performed by an attorney. The following documents must be included:
- The business name and company’s registered office
- The purpose of the Company’s activities, as set forth in the Polish Classification of Activities
- If the company is established for a definite duration of a time, the duration of the company
The amount of share capital, at a minimum of PLN 50,000 - A provision as to whether a shareholder is allowed to hold more than one share
- The number of shares and nominal value subscribed for by each shareholder
It is recommended that the articles of association include information detailing what would happen if there was an increase in share capital, changes to the board of directors, additional contributions, dividends, and/or actions that require shareholder approval.
2. A Polish bank account must then be opened.
3. Contributions covering the entire company’s share capital should be paid to this new bank account.
4. An application to register the company with the Polish Court Register is then made. The following must be included:
- Motion for the REGON statistical number issued by the Central Statistics Office
- The application for the company’s registration with the Social Insurance Institution, agreeing to make the required payments, and
- The application containing the NIP tax number and relevant taxation offices.
5. The company’s management board is appointed.
6. The company is entered into the commercial register.
All of the above documents must be submitted in Polish, and therefore, if the applicant is not a Polish language native a registered translator must be appointed to translate the documents into Polish. If the signatories to the deed do not speak Polish, their signing must be in the presence of a sworn translator.
A company is able to operate as a “company in organisation” for up to six months before filing for registration and can make valid contracts. However, its activities can theoretically be impeded until it becomes a proper company.
Joint Stock Company
This is a form of legal entity in Poland which carries legal personality with it, generally used for large corporations with more than one owner. The process of incorporation largely mirrors that of registering a limited liability company, with the key difference between the business types being that the joint stock company is fully liable for its obligations to its assets in entirety, without limitation.
Like a limited liability company, the steps for setting up a joint stock company are as follows:
1. Execution of articles of association, which may be performed by an attorney. The following documents must be included:
- The business name and company’s registered office
- The purpose of the Company’s activities, as set forth in the Polish Classification of Activities
- If the company is established for a definite duration of a time, the duration of the company
The amount of share capital, at a minimum of PLN 50,000 - A provision as to whether a shareholder is allowed to hold more than one share
- The number of shares and nominal value subscribed for by each shareholder
It is recommended that the articles of association include information detailing what would happen if there was an increase in share capital, changes to the board of directors, additional contributions, dividends, and/or actions that require shareholder approval.
2. A Polish bank account must then be opened.
3. Contributions covering the entire company’s share capital should be paid to this new bank account.
4. An application to register the company with the Polish Court Register is then made. The following must be included:
- Motion for the REGON statistical number issued by the Central Statistics Office
- The application for the company’s registration with the Social Insurance Institution, agreeing to make the required payments, and
- The application containing the NIP tax number and relevant taxation offices.
5. The company’s management board is appointed.
6. The company is entered into the commercial register.
All of the above documents must be submitted in Polish, and therefore, if the applicant is not a Polish language native a registered translator must be appointed to translate the documents into Polish. If the signatories to the deed do not speak Polish, their signing must be in the presence of a sworn translator.
The process can be expected to take between one and two months to reach completion.
Limited Partnership
Limited partnerships may acquire rights and incur obligations. It is a form of commercial partnership and may be formed by at least two individuals – one as a general partner, and the other as a general partner.
This business type aims to keep the company under its own name before creditors and other obligations, be they financial or legal. One partner has unlimited liability whilst the other does not.
Applications for registering a limited partnership must include:
- The standard application form for all Polish companies
- The name, registered office and address of the company, as well as its purpose
- The name of the general partner(s) and the name of the limited partner(s), as well as explanation of the circumstances limiting the ability of shareholder action, if applicable
- The name of the person(s) authorized to represent the company, in which manner, if the general partner(s) have entrusted any individuals to represent the company
- The total sum of the partnership
- Proof of payment of the relevant registration taxes and fees.
Purchase a shelf company
Foreign investors who wish to begin a company in Poland may elect to purchase an existing company.
The most common business types in Poland are the limited liability company and general partnership. It can save significant time and costs involved in setting up a new company if investors choose to purchase a shelf company. Another advantage is that the investor is able to retain all or part of the existing company employees and therefore is spared the need to recruit and train staff.
While there are significant time and cost savings, the following steps must be taken:
1. Changes to the company structure will have to be registered with the Polish Trade Registry.
2. Formal registrations of the new management board need to be made and the Articles of Association will need to be updated.
3. The new shareholder can also implement additional changes, such as a new company name or new objects of activity.
Foreign Branch
Branches do not have legal personality, but rather act as a standalone and distinct part of the company operating in a different country. The parent company bears full liability for the branches’ actions.
This is suitable for companies which wish to control its activities in another country.
There is no minimum share capital requirement imposed.
The branch in Poland must have an authorised appointed representative of the foreign company.
1. The representative needs to provide identification details such as their name and address in Poland.
2. The company must then be registered in the National Court Register including the following documents:
- Minutes of the decision to open a branch
- The company’s articles of association
- Information about board members
- Information about the branch in Poland, including its business activity, address and name.
3. The company must then register for VAT.
Wholly owned subsidiary
Subsidiaries mimic Polish limited liability companies and must observe the same applicable rules and regulations. They are suitable for small and medium sized companies, and they are independent from the parent company, whereas the branch is not.
Foreign companies wishing to operate subsidiaries will not be liable for its business activities, as the subsidiary itself acts like a limited liability company and is therefore liable for its own activities. While the registration process is slightly longer, the relief of these liabilities is often favourable for foreign business owners. This is the most popular form of business for foreign entities that choose to commence business operations in Poland.
To register a subsidiary, the same steps must be followed as if a limited liability company is being set up. A minimum share capital of 5000 PLN is required, and the company name requires the suffix “spolka z o.o”.
The following documents are required to register the subsidiary:
1. Minutes detailing the foreign company’s decision to open a Polish subsidiary
2. The subsidiary’s Articles of Association, which include the name and address, regulations, objectives, shareholder names and capital contribution, and their rights.
3. A bank account in Poland must be opened for the subsidiary.
4. The subsidiary must register for VAT.
Outsourcing Employment Through a GEO Employer of Record Service
Whether to incorporate in Poland, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.
If the company intends to have staff in Poland they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where
- the company is looking to setup an office quickly
- the company wants to work within a defined budget
- the company wants to limit its initial commitment in Poland
- the company needs help with tax, employment, immigration and payroll compliance in Poland
The complexity of employment regulations in Poland makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.
Shield GEO provides a comprehensive service in Poland allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Poland.
Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Poland. Read more about outsourced employment through Shield GEO.
- Poland Employer of Record Overview
Poland
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