Companies in Poland – doing business in Poland

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Polish law distinguishes two types of companies – the so-called partnerships and capital companies.

In Poland we have the following types of partnerships:

  • general partnership (spółka jawna),
  • professional partnership (spółka partnerska),
  • limited partnership (spółka komandytowa),
  • limited joint stock partnership (spółka komandytowo-akcyjna).

With regard to capital companies, we distinguish:

  • limited liability company (spółka z ograniczoną odpowiedzialnością; sp. z o.o.),
  • joint stock company (spółka akcyjna),
  • simple joint stock company (prosta spółka akcyjna).

Since Poland is a member of the European Union, it is also possible to register a European Company (Spółka europejska, Societas Europea) in our country.

Polish law stipulates that foreign persons may undertake and conduct business activities in the territory of the Republic of Poland under the principles specified in applicable law. Foreign persons who are entrepreneurs may establish branches, representative offices in the Republic of Poland or temporarily offer or provide services, under the terms specified in applicable law.

Pursuant to Polish regulations, a “foreign person” is a natural person without Polish citizenship, a legal person with its registered office abroad, an organizational unit without legal personality with legal capacity, with its registered office abroad.

Foreign persons from member tates other than:

  • The Republic of Poland,
  • Member States of the European Union,
  • or member states of the European Free Trade Association (EFTA) – parties to the Agreement on the European Economic Area) may undertake and conduct business activities in the territory of the Republic of Poland on the same terms as Polish citizens.

Citizens of countries other than the above-mentioned Member States may undertake and conduct business activity in the territory of the Republic of Poland on the same terms as Polish citizens, only if they meet certain conditions (e.g. if they have a permanent residence permit or a long-term resident’s European Union residence permit).

Other foreign persons have the right to undertake and conduct business activities only in the form of:

  • a limited partnership,
  • limited joint-stock partnership,
  • limited liability company,
  • simple joint stock company and
  • joint-stock company, as well as to join such companies and take up or acquire their shares, unless international agreements provide for otherwise.

Notice! Limited liability company is the most popular type of company and company formation in Poland takes only a few days.

Remember that there is also another option – establishing a branch of a foreign entrepreneur

To conduct business activities in the territory of the Republic of Poland, foreign entrepreneurs from Member States may establish branches with their registered office in the territory of the Republic of Poland.

Other foreign entrepreneurs may, in order to conduct business activities in the territory of the Republic of Poland, on the basis of reciprocity, unless ratified international agreements provide otherwise, establish branches with their registered office in the territory of the Republic of Poland.

A foreign entrepreneur within a branch may conduct business activity only to the extent to which he conducts this activity abroad. A foreign entrepreneur may start business within a branch after obtaining the branch’s entry in the register of entrepreneurs of the National Court Register (KRS).

Foreign entrepreneurs may establish and run representative offices in the territory of the Republic of Poland. The scope of operation of the representative office may only include advertising and promotion of a foreign entrepreneur

Notice! The KRS considers an application for company registration in Poland within 7 days, but this is only an indicative deadline and this time may be different, shorter or longer, most often it is about 2 weeks.

Regulated business activity

In some cases, to run a business, you need to obtain a special permit from the appropriate office, and also have specific professional qualifications or certain equipment or premises. The above means that the entrepreneur does not have full freedom to establish and run specific types of business. Most often, the reasons for limiting the freedom of business activity are issues important for the functioning of the state, in particular security and public interest.

In Poland, restrictions on conducting business activity may take the form of:

  1. concessions (e.g. mining activities; production and trade in explosives, weapons and ammunition, as well as products and technology for military or police purposes),
  2. permits (e.g. alcohol sales, running a pharmacy).
  3. entry in the register of regulated activities (e.g. detective services, individual medical practice)

Limited liability company in Poland

In Poland, it is possible to establish a limited liability company in so-called S24 mode. In such a situation, shareholders do not have much influence on the content of the Articles of Association, because the company’s registration in this mode is based on the so-called a template of the Articles of Association that is very simple and general and often does not regulate specific arrangements between shareholders. Foreign persons are often limited in using this form of company registration in the S24 mode because they often do not have a PESEL number and, therefore, an ePuap signature.

Therefore, in relation to foreigners, we register limited liability companies more often in the traditional mode, which involves the need to prepare the Articles of Association in the form of a notarial deed.

As we mentioned above, we know that it is not always possible for all partners to participate in person during a meeting at a notary’s office in Poland. This is not a problem for us, because in such cases we offer our Clients the opportunity to act based on a power of attorney. Thanks to this solution, our Clients, even from the farthest corners of the world, do not have to be present in person at the notary.

However, if future shareholders would like to participate in person in a meeting at the notary’s office, they should also take into account whether they know the Polish language to a degree that allows them to fully understand the content of the notarial deed containing the Articles of Association. If at least one shareholder does not know the Polish language, the participation of a sworn translator is also necessary.

Notice! a polish limited liability company requires registration in the National Court Register.

The company’s share capital is divided into shares with equal or unequal nominal value. The Articles of Association specifies whether a shareholder may have only one or more shares. The company’s share capital should be at least PLN 5,000 and the nominal value of the share cannot be lower than PLN 50.

Remember also, that shares cannot be acquired below their nominal value. If the share is acquired at a price higher than the nominal value, the surplus is transferred to the supplementary capital.

Notice! In Poland the minimum share capital should be at least PLN 5,000.

If the contribution to the LLC company to cover the share is to be wholly or partially a non-cash contribution (in-kind contribution), the Articles of Association should specify in detail the subject of this contribution and the person of the partner making the contribution in kind, as well as the number and nominal value of the shares acquired in return.

Company formation in Poland

A limited liability company may be established by one or more persons for any legally permissible purpose, unless the law provides otherwise. A limited liability company cannot be established solely by another single-member limited liability company. Shareholders are only obliged to provide the services specified in the partnership agreement. There is a big advantage of LLC – shareholders are not liable for the company’s obligations.

Notice! The Articles of Association of LLC must be drawn up in the form of a notarial deed.

Here are the steps you need to take to register an LLC in Poland:

  1. preparation of a draft of the Articles of Association (the AoO),
  2. signing the the AoA in the presence of a notary in the form of a notarial deed,
  3. if the shareholder is another legal person (another company), remember to submit appropriate documentation regarding this company, including preparing sworn translations of documents prepared in a foreign language,
  4. if necessary, ensure apostille clauses/legalization of documents,
  5. paying up the share capital,
  6. preparation of registration documents for the National Court Register,
  7. submitting an application for registration via the electronic system,
  8. entry into the National Court Register.

The National Court Register

Notice! Company registration consists of several stages and ends after entry in the National Court Register.

The National Court Register consists of:

1) register of entrepreneurs;
2) register of associations, other social and professional organizations, foundations and independent public health care facilities;
3) register of insolvent debtors.

The register is kept in an IT system by district courts (commercial courts), referred to as “registration courts”.

Notice! Company in Poland need to be entered into the KRS.

The Register includes entities that are obliged to be entered in the Register by the provisions of Polish law.

Currently, essentially all proceedings for entry into the KRS are carried out electronically, because the Polish legislator is moving away from paper proceedings in this respect.

The registration court recognizes the application for entry no later than within 7 days from the date of its receipt by the court. However, this is an instructional deadline (i.e. one that does not bind the court), so proceedings before the National Court Register may take shorter or longer and it all depends on the specific case.

Things to remember:

a limited liability company in Poland is registered in the electronic system procedure. In the National Court Register a polish company indicates their business activities that showes the scope of doing business in Poland. The polish limited liability company is highly recommended for foreigners in Poland.

dr Alicja Olszar

Our Law Firm helps in establishing a company in Poland. We also help in running the company after its entry in the National Court Register. We also provide all services in English.

Want more information, please contact us here!

If you have more questions on how to establish a company, please contact us and we will help you in company registration.

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