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Understanding the Polish business structures to setup your company in Poland

by | Jan 14, 2024 | Company Management, Corporate Structuring

Setup your business in Poland – Luxembourg

Poland, nestled at the heart of Europe, is a land of rich history, vibrant culture, and a thriving economy. For entrepreneurs and investors seeking opportunities in the European market, Poland presents itself as an enticing destination. In this extensive guide, we will explore the multitude of options available for establishing businesses in Poland, providing an in-depth understanding of each business entity, their distinctive characteristics, and the advantages they offer.

I. Sole Proprietorship: The Independent Entrepreneurship

1.1 Understanding the solo entrepreneurship

One of the most straightforward and frequently chosen forms of business entities in Poland is the sole proprietorship, referred to as “działalność gospodarcza prowadzona przez osobę fizyczną.” In this structure, an individual entrepreneur operates their business independently, without the need for additional partners or shareholders. Sole proprietorships are particularly popular among small-scale businesses and freelancers who value complete control over their operations.

1.2 Key Features of sole proprietorship

Sole proprietors have full autonomy over their business decisions, including selecting a business name and using their personal tax identification number (NIP) as the company’s identifier. However, it’s essential to note that sole proprietors assume personal liability for any debts or obligations incurred by the business, potentially putting their personal assets at risk.

II. Partnership: The collaborative endeavor

2.1 General Partnership (Spółka Jawna)

General partnerships, known as “spółka jawna,” involve two or more individuals coming together to collectively manage and operate a business. Unlike sole proprietorships, partners in a general partnership share both profits and losses, and their personal assets may be used to cover the company’s financial commitments.

2.2 Limited Partnership (Spółka Komandytowa)

In contrast to general partnerships, a limited partnership, or “spółka komandytowa,” consists of two types of partners: general partners and limited partners. General partners are responsible for managing the business and are personally liable for its debts, while limited partners contribute capital but enjoy limited liability, protecting their personal assets from business-related obligations beyond their invested capital.

III. Limited Liability Company (LLC): The flexible entity

3.1 The Adaptable LLC (Spółka z Ograniczoną Odpowiedzialnością)

A limited liability company, commonly known as “spółka z ograniczoną odpowiedzialnością” (LLC), stands as one of the most preferred choices for entrepreneurs in Poland. It offers the advantage of limited liability, with a clear separation between the company’s assets and the personal assets of its shareholders, providing a safety net in case of financial difficulties.

3.2 Characteristics of an LLC

An LLC can have one or more shareholders, requiring a minimum share capital of PLN 5,000 for its establishment. Known for its flexibility, shareholders can be individuals or legal entities, and the company can engage in various business activities. The management structure can be tailored to the shareholders’ preferences, offering options for a single-member management board or a supervisory board, depending on the company’s size and complexity.

IV. Joint-Stock Company: The spectrum of public and private

4.1 Publicly and Privately Held (Spółka Akcyjna)

A joint-stock company, known as “spółka akcyjna” (SA) in Poland, brings a higher level of corporate governance and is suitable for larger enterprises seeking to raise capital through the issuance of shares. There are two main types of joint-stock companies in Poland: publicly held (publiczna) and privately held (niepubliczna).

4.2 Public Joint-Stock Company

Public joint-stock companies, as the name suggests, can issue shares to the public and are subject to more stringent reporting and disclosure requirements. They must have a minimum share capital of PLN 100,000 and are listed on the Warsaw Stock Exchange or another regulated market. Shareholders in public SA companies enjoy limited liability, with their liability restricted to the value of their shares.

4.3 Private Joint-Stock Company

Private joint-stock companies, on the other hand, do not issue shares to the public. They require a minimum share capital of PLN 50,000 and are often preferred by medium-sized businesses and corporations for their internal operations. Shareholders in private SA companies can benefit from a more flexible governance structure and a level of anonymity, as their ownership is not publicly disclosed.

V. Limited Joint-Stock Partnership: the fusion of two realms

5.1 The Blend of Limited Partnership and Joint-Stock Company (Spółka Komandytowo-Akcyjna)

A limited joint-stock partnership, or “spółka komandytowo-akcyjna,” presents an intriguing business entity that combines elements of both a limited partnership and a joint-stock company. Within this structure, two types of partners coexist: general partners (with full liability) and limited partners (with limited liability). General partners are responsible for managing the company, while limited partners contribute capital and enjoy limited liability.

5.2 Benefits of a Limited Joint-Stock Partnership

This hybrid business entity offers the flexibility of a limited partnership with the option to raise capital by issuing shares to the public, akin to a joint-stock company. It is an attractive choice for businesses looking to harness the advantages of both structures while maintaining a clear distinction between general and limited partners.

VI. Branch of a foreign company: The gateway to international expansion

6.1 Expanding Internationally (Oddział Zagranicznej Spółki)

For foreign companies seeking to establish a presence in Poland without creating a separate legal entity, opening a branch office is a viable option. A branch operates as an extension of the foreign company, conducting business activities in Poland under its name and legal structure.

6.2 Key Considerations for Branch Offices

Branches of foreign companies must register with the National Court Register (Krajowy Rejestr Sądowy) and appoint a local representative authorized to act on behalf of the branch. It’s crucial to note that the parent company bears full responsibility for the branch’s operations, including financial obligations and liabilities in Poland.

VII. Representative Office: The explorer

7.1 Exploring Market Opportunities (Przedstawicielstwo)

A representative office, known as “przedstawicielstwo,” serves as a non-profit entity designed to promote the parent company’s interests and explore market opportunities in Poland. It cannot engage in commercial activities, generate revenue, or sign contracts, but it can conduct market research, establish business contacts, and facilitate communication between the parent company and potential partners or clients.

7.2 Limitations of Representative Offices

Representative offices lack legal personality, meaning they cannot enter into legal agreements independently. Consequently, any contracts or obligations entered into by a representative office are binding on the parent company. While they serve as a cost-effective means to assess the Polish market, they may not be suitable for businesses intending to engage in substantial commercial activities within the country.

VIII. Cooperative: The power of collaborative entrepreneurship

8.1 Fostering Collective Entrepreneurship (Spółdzielnia)

Cooperatives, or “spółdzielnia,” represent a distinctive category of business entities rooted in the principles of collective entrepreneurship. They are owned and operated by their members, who share both responsibilities and profits. Cooperatives can serve various purposes, from agriculture and housing to production and services, making them a versatile choice for community-driven initiatives.

8.2 Characteristics of Cooperatives

Cooperative members actively participate in the decision-making process and benefit from shared resources, collective efforts, and equitable distribution of profits. The cooperative structure fosters a sense of community and shared purpose, reinforcing the principles of solidarity and mutual support among members.

Poland, a country with a storied past and a promising future, offers a diverse array of business entity options to cater to a wide range of entrepreneurial aspirations. Whether you are a lone entrepreneur seeking the simplicity of a sole proprietorship or a corporate visionary navigating the complexities of joint-stock companies, Poland provides fertile ground for your endeavors. As you embark on your journey into the Polish business landscape, a nuanced understanding of these diverse business entities will serve as your compass, guiding you towards success in the heart of Europe.

Damalion assists international entrepreneurs to setup their company with business bank account in Poland. Please contact your Damalion expert now.

Damalion – Luxembourg

Understanding the Polish business structures to set up your company in Poland

For investors, entrepreneurs, family offices, holding companies and international groups • This guide explains legal forms, basic capital rules, registration points, and compliance items in plain language. Always seek independent legal and tax advice for your case.

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At a glance

Form Polish name Legal personality Minimum capital Typical use
Limited liability company Spółka z ograniczoną odpowiedzialnością (sp. z o.o.) Yes PLN 5,000 SMEs, subsidiaries, general purpose
Simple joint-stock company Prosta spółka akcyjna (P.S.A.) Yes PLN 1 Startups, venture capital, flexible equity
Joint-stock company Spółka akcyjna (S.A.) Yes PLN 100,000 Larger projects, listings, regulated sectors
General partnership Spółka jawna (sp.j.) No Not required Professional/services with partner liability
Limited partnership Spółka komandytowa (sp.k.) No Not required Structures with general and limited partners
Limited joint-stock partnership Spółka komandytowo-akcyjna (S.K.A.) Yes (hybrid) PLN 50,000 (shares) Deals needing partner control + share issuance
Branch of foreign company Oddział Part of foreign entity Not applicable Market entry without new legal entity
Representative office Przedstawicielstwo No Not applicable Promotion and research only (no sales)

Main forms explained

sp. z o.o. — limited liability company

  • Minimum share capital: PLN 5,000. Shares usually have a nominal value of at least PLN 50.
  • Legal personality. Liability is limited to the company’s assets.
  • One or more shareholders. A sole-shareholder sp. z o.o. cannot be formed by another sole-shareholder sp. z o.o.
  • Registration in KRS (National Court Register). Template articles via S24 or notarial deed.
  • Management board required; supervisory board is optional unless thresholds or articles require it.

P.S.A. — simple joint-stock company

  • Capital from PLN 1. Flexible equity tools. Good for startups and VC.
  • Choice of one-tier board of directors or two-tier system (per statute).
  • Shares can be dematerialised. Faster corporate actions are possible under statute.

S.A. — joint-stock company

  • Minimum share capital: PLN 100,000. At least 25% typically paid before registration.
  • Two-tier governance (management board + supervisory board).
  • Used for large ventures and capital markets.

Partnership options

  • sp.j. (general partnership): partners have unlimited liability.
  • sp.k. (limited partnership): at least one general partner (unlimited) and one limited partner (limited to contribution).
  • S.K.A. (limited joint-stock partnership): hybrid with share capital (min. PLN 50,000) and at least one general partner.

Branch and representative office

  • Branch: register in KRS and appoint a local representative. The foreign head office is fully liable.
  • Representative office: promotion and market research only. No commercial activity or contracts.

Registration and compliance

  • KRS registration (paper or S24 electronic, if using templates).
  • Statute/articles, shareholder data, management data, company address.
  • CRBR: report ultimate beneficial owners and keep data current.
  • Tax numbers and registrations: NIP, REGON, and VAT if required.
  • Accounting and annual financial statements per Polish rules.
  • Corporate income tax: standard 19%; 9% for small taxpayers under statutory thresholds (subject to conditions).

Frequently asked questions

1) What are the minimum capital rules for sp. z o.o., P.S.A. and S.A.?
sp. z o.o.: PLN 5,000. P.S.A.: from PLN 1. S.A.: PLN 100,000 (with a portion typically paid before registration). These are statutory floors. Banks or investors may expect more.
2) Can a sole-shareholder company set up another sole-shareholder sp. z o.o.?
No. Polish law does not allow a sole-shareholder sp. z o.o. to be formed by another sole-shareholder sp. z o.o. A different shareholding pattern is required.
3) Is online registration possible?
Yes. The S24 system allows online incorporation using model documents. Notarial deeds are used when you need tailored articles or non-cash contributions not supported by S24.
4) What are the basic management body rules?
sp. z o.o.: management board required; supervisory board optional unless triggered by law or articles. P.S.A.: one-tier or two-tier structure per statute. S.A.: two-tier structure is the standard.
5) How are branches of foreign companies treated?
A branch is an extension of the foreign company, registered in KRS with a local representative. The foreign company remains fully liable for the branch’s obligations.
6) What can a representative office do?
Promotion and market research. It cannot sell goods or services or sign commercial contracts in Poland.
7) What are the core tax registrations?
NIP (tax ID) and REGON (statistical number). VAT registration is required if activities or thresholds trigger it or counterparties demand VAT invoicing.
8) What corporate income tax rates apply?
Standard CIT is 19%. A 9% CIT rate may apply to small taxpayers that meet statutory revenue thresholds and conditions. Separate regimes may apply (e.g., lump-sum/“Estonian” CIT) if elected and conditions are met.
9) Are UBO filings mandatory?
Yes. Most entities must report beneficial owners to CRBR and update changes within statutory deadlines. Non-compliance can lead to financial penalties.
10) Are there limits on in-kind contributions?
In-kind contributions are allowed in traditional formations. Online S24 uses cash by default. Valuation and proper descriptions are required for non-cash contributions.
11) What is required before company registration regarding capital?
For sp. z o.o., capital must be fully paid in before registration. For S.A., a statutory portion is paid prior to registration, with the remainder as provided by law and the statute.
12) Do I need a Polish address?
Yes. A registered office address in Poland is required. Virtual addresses may work for registration, but banks or regulators can ask for more substance based on activity.
13) What accounting and reporting duties apply?
Keep Polish accounting books, file annual financial statements, and ensure corporate approvals. Larger entities may need an audit under statutory thresholds.
14) Can foreigners own 100%?
Yes, with sector-specific limits only where special regimes apply. Standard commercial activity allows 100% foreign ownership.
15) What is the typical timeline?
Online set-ups can be completed quickly when documents are ready. Timing depends on KRS processing, bank account opening, and any sector approvals.
16) When is a supervisory board mandatory?
It is always present in S.A. In sp. z o.o., it becomes mandatory when statutory thresholds are reached or when articles require it. In P.S.A., governance is set in the statute (one-tier or two-tier).
17) Does Poland have a startup-oriented company form?
Yes. The P.S.A. supports flexible equity, quick corporate actions, and low minimum capital (from PLN 1). It suits venture-backed projects.
18) What are common reasons for bank delays?
Unclear UBO chain, missing proof of source of funds, inconsistent IDs or addresses, or incomplete company documents. Keep a clear ownership chart and evidence ready.
19) How are dividends taxed?
Dividends are generally subject to withholding tax, with possible reliefs or exemptions under domestic rules or double tax treaties when conditions are met.
20) Can I operate via a branch first and incorporate later?
Yes. A branch can test the market. Many investors switch to a subsidiary (sp. z o.o. or P.S.A.) for limited liability, local hiring, and simpler contracts.

10 Best Things to Do in Warsaw, Poland in 24 Hours

Maximize a tight schedule with easy-to-reach highlights clustered around Śródmieście and the Royal Route. Jump to map

  1. Royal Castle – state museum on Castle Square.
  2. Łazienki Park – palace and gardens.
  3. Warsaw Uprising Museum – 1944 history.
  4. POLIN Museum – Jewish history.
  5. Palace of Culture and Science – skyline terrace.
  6. Copernicus Science Centre – hands-on science.
  7. Fryderyk Chopin Museum – composer’s legacy.
  8. Neon Museum – Cold War neon signs.
  9. Vistula Boulevards – riverside promenade.
  10. PKiN Viewing Terrace – fast lift to 30th floor.

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10 Best Hotels in Warsaw (central, business-friendly)

  1. Hotel Bristol, a Luxury Collection – Royal Route icon.
  2. Raffles Europejski Warsaw – luxury by Piłsudski Square.
  3. Hotel Warszawa – design hotel in a modernist tower.
  4. Nobu Hotel Warsaw – contemporary + Art Deco.
  5. InterContinental Warsaw – pool on the 43rd floor.
  6. Sofitel Warsaw Victoria – by Saxon Garden.
  7. Polonia Palace Hotel – historic, opposite the Palace of Culture.
  8. PURO Warszawa Centrum – design-forward, rooftop.
  9. H15 Boutique Hotel – spacious suites in a 19th-century house.
  10. Verte, Autograph Collection – Autograph by Marriott (Alt: check availability via Marriott).

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10 Best Restaurants in Warsaw (bookings recommended)

  1. Epoka – modern Polish tasting menus.
  2. Europejski Grill – classics with a view of Piłsudski Square.
  3. Kieliszki na Próżnej – Polish dishes + serious wine list.
  4. Butchery & Wine – steakhouse mainstay.
  5. Nolita – fine dining near Plac Trzech Krzyży.
  6. Rozbrat 20 – creative seasonal plates.
  7. Ale Wino – courtyard bistro + wines.
  8. Bez Gwiazdek – rotating regional Polish menu.
  9. U Fukiera – Old Town classic.
  10. N31 Restaurant & Bar by Robert Sowa – modern Polish.

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Warsaw — Local Map

  • Graphic – Luxembourg
  • Graphic – Luxembourg

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