Open a Polish Limited Liability Company | Updated 2023 Guide
Open a Polish Limited Liability Company
Updated on Friday 28th April 2023
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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 2023. 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.
Polish companies in need of legal advice and representation are welcomed to reach out to our team of attorneys in Warsaw for complete information about our solutions. We not only assist companies in need of legal representation for dispute resolution. We also offer legal consultation at any stage of the company formation process, as well as once the business is established and for existing businesses with seniority on the market.
Our experts invite you to watch a video about opening a Polish limited liability company:
Requirements for a Polish LLC in 2023
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 2023 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.
Investors who set up this type of company in 2023 will need to be mindful of the following taxes:
· Corporate income tax rate: with a 19% standard rate and a 9% reduced rate;
· Dividend withholding tax: 19% or no tax at all, when this is reduced through a double tax treaty or otherwise;
· Value-added tax: 23% standard rate and 8%, 5% and 0% reduced rates; some types of goods and services are exempt from this tax altogether;
· Social security contributions: both the employer and the employee are asked to make these contributions and, between them, the amount is about 35% of the employee’s salary; a cap applies on the amounts to be paid by each party (with approximately 21% for the employer and 14% by the employee).
Our experts are able to provide you with a large variety of legal services, including special company incorporation services for foreign investors in Poland.
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.
The team offers quick responses and they always treat each customer according to his/her needs and objectives. The solutions they offer are tailored so that they observe the particularities of the company as well as the business field in which it operates.