Open a Polish Limited Liability Company | Updated 2021 Guide
Open a Polish Limited Liability CompanyUpdated on Monday 08th March 2021
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The Polish limited liability company is the most common business form in Poland. This business structure has several advantages, including the fact that the investor is protected in case the business fails. The fact that company owners have limited liability, plus the accessible incorporation and maintenance costs are two of its most important characteristics.
Several steps are needed for the incorporation of the company in 2021. The new legal entity will be able to engage in commercial activities once it is registered and its papers are in order. If all the documents are properly prepared and submitted, the entire process for opening a Polish limited liability company should last around 30 days.
The list below includes the basic and mandatory requirements for opening this type of company:
- Documentation: the Articles of Association are the constitutive documents which need to be drawn up according to the law in order for the business to be registered.
- Founders: the company can have a single shareholder and there are no restrictions on the total number or the nationality of the founders.
- Capital: the capital, made up of the contributions submitted by the shareholders is 5,000 PLN and must be paid-up before the business is registered (in cash or in kind).
- Management: the company must have a management board of at least one person; when the company has more than 25 shareholders or when the capital exceeds the amount of 500,000 PLN, the company must also have a Supervisory Board with at least three individuals.
A law firm in Poland can provide you with the adequate legal representation during the process and a legal representative can handle part of the steps in your name, through a power of attorney.
Our experts invite you to watch a video about opening a Polish limited liability company:
Requirements for a Polish LLC in 2021
The limited liability company in Poland (abbreviated Sp. z.o.o.) is founded by at least one shareholder and the contributions to the capital can be made in cash or in kind. A restriction applies in terms of the company founder for an LLC: one company with a single shareholder cannot incorporate another company with a sole shareholder. The minimum capital contribution is PLN 5,000.
The shareholders in a Polish limited liability company are only liable to the extent of their investment in the legal entity. The LLC needs to be registered with the Polish Company Register, apply for a tax identification number (NIP) and also for a statistical number (the REGON number). The company will also need to be registered for VAT purposes.
Our Polish law firm is able to provide you with complete company incorporation services in 2021, including drawing up documents like the Articles of Association.
LLC compliance in Poland
The LLC is taxed on its income produced in the country. Corporate taxation in Poland is based on residency and has a fixed rate of 19%. Withholding taxes apply for dividends, royalties, and interest but they may be reduced under a double tax treaty.
Polish companies, including limited liability companies, must comply with the annual reporting and auditing requirements. When these companies hire personnel, the employer must observe all of the regulations for employment in Poland, both for foreign and local workers.
The main taxes applicable to an LLC in Poland include the corporate income tax rate, the capital gains tax, the VAT, stamp duty, real estate tax and excise duty. One of our lawyers can provide investors with complete information about the Tax Ordinance.
Our experts are able to provide you with a large variety of legal services, including special company incorporation services for foreign investors in Poland.
2021 has brought a series of changes to the Polish Corporate Income Tax act. Some of the most notable do not concern limited liability companies, but partnerships in terms of taxation. Nonetheless, an updated version of the latest tax changes and how they can impact your business is available from our lawyers. We are able to provide you with information on any relevant tax changes that may impact your business this year.
You can contact our Polish law firm for more information about the limited liability company or another chosen business form.