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Legal forms of conducting business in Poland

Operating a business in Poland

There are several ways to operate a business in Poland through a legal entity.

The most common types for investors with foreign capital are:

  • a limited liability company (Polish: spółka z ograniczoną odpowiedzialnością) and
  • a branch office of foreign entrepreneur.

Limited liability company

  • Under Polish law a limited liability company is a separate legal person which means that it has its own assets and operates through its governing bodies. 
  • The shareholders are not liable for the company’s obligations and their financial risk is limited only to the amount invested in the company’s share capital. 
  • In principle, there are two obligatory statutory governing bodies of a company: a management board and Shareholders’ Meeting. A supervisory board is obligatory only when certain conditions are met in terms of the share capital amount and the number of shareholders engaged into the shareholding structure of the company.
  • Incorporation of a limited liability company requires Articles of Association to be executed before a Polish notary public. Execution of the notarial deed covering this document can be done on the basis of powers of attorney,  however, in such a case these powers of attorney shall be drawn-up in the notarial form, and, if executed abroad, affixed with an apostille clause. 
  • The share capital of a limited liability company shall amount to no less than PLN 5,000, being an equivalent of approx. EUR 1,250. The share capital of a limited liability company may be covered in whole or in part with cash and/or in-kind contributions.
  • The Articles of Association must include i.a. the business name, corporate seat and objects of the limited liability company. The business name of the LLC must be unique to the extent that it does not cause confusion with the names of other companies or business entities.
  • A limited liability company must be registered with the Polish register of entrepreneurs of the National Court Register. The commercial register holds publicly available information of the company, such as its registered address, personal details of Management Board members, dates and other details of amendments to the Articles of Association and completed reporting obligations concerning statutory financial statements.

Phase of establishment
of LLC

Actions to be taken

Preparatory phase
  • Gathering the information required to draft corporate documentation 
  • Choosing registered office and premises for the intended business activity
  • Drafting Articles of Association and other documents required for LLC establishment 
  • Choosing bank providing bank account service 
  • Obtaining excerpt from the commercial register for the Shareholder(s)

Incorporation phase
  • Execution of the Articles of Association before notary public 
  • Appointment of the Management Board 
  • Execution of lease/sublease agreement
  • Opening of a bank account in Poland (including performing "KYC" procedure)
  • Executing documents constituting attachments to motion for the LLC's registration

Registration phase
  • Filing of a motion for registration of the LLC in the registry court
  • Registration with the National Court Register
  • Obtaining by the LLC of KRS number (commercial registration number), NIP number (tax identification number) and REGON number (statistical number)

Post registration formalities
  • Completing mandatory reporting with the Polish UBO register;

Branch

  • The Branch may be established by a foreign entrepreneur who intends to conduct business activity in Poland.
  • The Branch may be established by entrepreneurs of the EU member states or state member to European Free Trade Association being a party to European Economic Area without any specific formalities. 
  • Entrepreneurs from countries other than the above may establish the Branch if there is a principle of reciprocity between the given country and Poland (existence of respective treaty must be verified in view of jurisdiction of the intended parent company).
  • The decision (in most cases in a form of a resolution of competent governing body of the foreign entrepreneur) on establishment of the Branch shall include, in particular:
    • appointment of a person authorized in the Branch to represent the foreign entrepreneur; and
    • scope of business activities of the Branch.

 

  • A foreign entrepreneur who established the Branch shall use, for purposes of designating the Branch, the original name of the foreign entrepreneur in the language of the country in which his or her registered office is located together with the name of its full legal form translated into Polish and additional phrase oddział w Polsce (“branch in Poland”).
  • Foreign entrepreneur who establishes the Branch must appoint a person authorized in the Branch to represent the foreign entrepreneur. Foreign individual may be appointed as the Branch Manager (no domicile or nationality requirements).

LLC

  

Branch office

Legal status of the entity
  • has legal personality with full capacity to perform acts in law (separated from legal personality of its shareholders)
  • is legally independent entity from its shareholder(s)
  
  • has no legal personality separate from the legal personality of the foreign entrepreneur
  • any and all actions taken by the Branch are treated as taken on behalf and for the account of the foreign entrepreneur for which the foreign entrepreneur is liable
  • in principle, is not treated as an independent entity (some exceptions in this respect are provided under Polish law, e.g. in accounting and labour law regulations)

Range of activities
  • the LLC may be established for any legitimate purpose, unless provisions of Polish law provide otherwise (e.g. requirement that certain activities may be performed by joint-stock companies only) the LLC is obliged to report to the registry court up to 10 activities, including: 1 key prevailing and maximum 9 other activities considered important. The AoA of the LLC, however, may include more than 10 activities of the LLC, which is common practice
  • the LLC may start business activity upon execution of its AoA before a Polish notary public, unless specific licenses, permits, etc. are required under Polish law for the activity to be conducted by the LLC (applicable to regulated markets only). In such case given activity may be started after obtaining relevant licences, permits, etc
  
  • the Branch may conduct business activity within the scope of the foreign entrepreneur’s business activity only
  • performance of certain types of activities may require additional permits, licenses, concessions etc.

Commencement of business activity 
  • from the moment of execution of the AoA before the Polish notary public, the LLC may start its business activity, conclude contracts, assume obligations, etc. In the period from the execution of the AoA before the Polish notary public until the registration of the LLC with the NCR the LLC acts as a company in organization and, therefore, must use additional designation "w organizacji" (in English: in organization) along with its business name (e.g. ABC Poland spółka z ograniczoną odpowiedzialnością w organizacji);
  • upon registration with the NCR, the LLC in organization becomes a limited liability company with a full legal personality
  
  • the foreign entrepreneur may commence its business activity within the framework of the Branch, only after the Branch has been registered with the NCR

Financing through foreign entrepreneur (shareholder)
  • regulated formally – the shareholders may (i) make additional payments to the company, (ii) make additional contributions to the share capital, (iii) increase the share capital in cash or in kind; (iv) grant loans to the company
  • the funds may be transferred from the LLC to the shareholder in principle under the following legal titles: (i) dividend, (ii) interim dividend, (iii) remuneration for the redeemed shares, (iv) based on agreements between the LLC and the shareholder (e.g. loan agreement, license agreement etc).
  
  • not regulated formally – the Branch being organizational part of the foreign entrepreneur (no separation) can be financed by the foreign entrepreneur in accordance with applicable foreign law

Liability regime
  • the responsibility of the LLC is limited to the value of LLC’s assets
  • the LLC’s shareholders are in principle not responsible for the LLC’s obligations
  • the members of the MB of the LLC may be – in certain cases – jointly and severally liable for the obligations of the LLC
  
  • foreign entrepreneur is liable directly for any and all obligations incurred as a result of or in connection with the Branch’s activities and operations

Human Capital and labour law

Employing individuals in Poland involves navigating through a series of legal steps and requirements. The process, ranging from contract execution to health and safety regulations, to tax obligations, underscores the importance of every detail. This overview serves to clarify these essential aspects of Polish employment procedures.

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Adam Pawlicki

Adam Pawlicki

Partner, PwC Poland

Tel: +48 502 184 080

Email
Daniel Iwiński

Daniel Iwiński

Director, PwC Poland

Tel: +48 519 506 824

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