Industrials

<p style="text-align: justify;">We describe below how to establish a private limited liability company and the process of company formation &nbsp;in Poland (sp. z o.o). Private limited liability companies are one of the <a href="https://www.companyincorporationpoland.com/polish-company-types">types of companies available for registration in Poland</a> . A private limited company can be established either through electronic registration using the internet portal S24 or through the traditional route using the notary public.</p><h2><span style="font-size: 14pt;">Establishing Polish Companies &nbsp;Through Electronic Registration using S24&nbsp;</span></h2><p style="text-align: justify;">Establishing a company in Poland is easy for Polish residents who can use the internet portal S24. This allows a company to be registered by submitting an electronic form. Foreigners who want to establish a company in Poland may experience challenges since they are neither in the Polish registers nor S24 users. Furthermore, the Polish language is used in much of the process to register a Polish company.</p><p style="text-align: justify;">This option is recommended for small companies with standard bylaws. If there are more shareholders or if you want to modify in any way the standard bylaws, you must take the traditional route and visit the notary public or appoint a lawyer who will handle the process on your behalf.</p><h2 style="text-align: left;"><span style="font-size: 14pt;">Company Registration in Poland &nbsp;Through the Traditional Route Using the Notary Public&nbsp;</span></h2><p style="text-align: justify;">If you want to modify the standard provisions of the Articles of Association, you must visit the notary public in Poland and sign the documents either personally or through your Polish attorney.</p><p style="text-align: justify;">Below we outline the process that Polish companies have to go through:</p><ul><li><h3><span style="font-size: 12pt;">Prepare the Incorporation Documents in Compliance with Polish Law&nbsp;</span></h3></li></ul><p style="text-align: justify;">To register a Polish private limited liability company, a foundation document is needed along with a set of Articles of Association. Preparing the documents in compliance with Polish law is essential.</p><p style="text-align: justify;">One of the details the prospective shareholders should pay extra attention to is the composition of the board of directors and the way the company is going to be represented. Under Polish law, the Articles of Association should specify who appoints and dismisses the directors and how many signatures are required for a valid representation of the company.</p><p>The share capital of at least PLN 5,000 is required to establish a Polish private limited liability company.</p><ul><li><h3><span style="font-size: 12pt;">Obtain Proof of Paid Share Capital</span></h3></li></ul><p style="text-align: justify;">Polish register authorities need a declaration from the board of directors that the company has a share capital of at least PLN 5,000. Although, Polish law allows for companies to be established by using &nbsp;assets other than money as the share capital, using money as the share capital is the easiest way to meet the share capital requirement in many cases.</p><p style="text-align: justify;">To pay in the share capital, the company needs to open a bank account in Poland.</p><ul><li style="text-align: justify;"><h3><span style="font-size: 12pt;">Sign the Lease Agreement</span></h3></li></ul><p style="text-align: justify;">Polish register authorities need the company&rsquo;s address, so the company should identify and sign the lease agreement for the office it is going to use. This will be the official address of the company where all correspondence will be directed. There is also a possibility of finding a virtual office.</p><ul><li style="text-align: justify;"><h3><span style="font-size: 12pt;">Complete the Registration Documents</span></h3></li></ul><p style="text-align: justify;">Registering a private limited liability company requires a coordinated register notification. It is important to complete the document correctly to avoid Polish authorities refusing to register the company. The board of directors needs to sign a number of declarations and the list of shareholders.</p><p style="text-align: justify;">Foreign directors who do not have a Polish personal identification number should request a PESEL number, which is required to obtain a trusted profile allowing electronic signing of applications and requests submitted to public entities (ePUAP), as currently, many obligations related to running a company can only be met digitally (e.g., registration into the Central Register of Beneficial Owners, submission of annual financial statements).</p><p style="text-align: justify;">An alternative solution is to purchase a certified electronic signature for the directors.</p><ul><li style="text-align: justify;"><h3><span style="font-size: 12pt;">Send the Documents to the Polish Register Authorities</span></h3></li></ul><p style="text-align: justify;">The final step in the process of registering a Polish private limited liability company is, of course, to send all the documents to the Polish register authorities. The process may take up to 2 or 3 weeks.</p><p style="text-align: justify;">Any mistakes in the documents may result in Polish authorities returning the documents to the sender without registering the company. Once the mistakes have been corrected, the documents can be sent back to Polish authorities to have them process the registration anew.</p><ul><li style="text-align: justify;"><h3 style="text-align: left;"><span style="font-size: 12pt;">After Registration</span></h3></li></ul><p style="text-align: justify;">Once successfully registered, the company will receive an organization number in the KRS register.</p><p style="text-align: justify;">If the company was not registered in the VAT register at the same time as the registration of the company, then an assessment should be made of whether to register the company for VAT. A Polish private limited liability company may also need a Polish accountant.</p><p style="text-align: justify;">The directors must also identify the group of people who are the beneficial owners of the company and, once the company is registered with the KRS, make the appropriate filing with the Central Register of Beneficial Owners.</p><p style="text-align: justify;"><em><span style="font-size: 10pt;">This article was contributed by our expert Grzegorz E. Woźniak.</span></em></p><h3 style="text-align: left;"><span style="font-size: 18pt;">Frequently Asked Questions Answered By Grzegorz E. Woźniak:</span></h3><h2><span style="font-size: 12pt;">1.&nbsp;How much does it cost to set up a company in Poland?</span></h2><p style="text-align: justify;"><span style="font-size: 12pt;">Setting up a limited company in Poland is not too expensive. In the case of a simple entity (one shareholder, one director, basic wording of the Articles) the founder has to pay the notarial and court fees which is approx. PLN 2,000 (Eur 450) and the lawyers&rsquo; fees which is approx. Eur 1,500. If the founder needs more complicated version, then the cost will be higher and depend on the specific situation. This calculation does not include the costs such as renting the office (each company needs to have an office) or hiring the accountants. The lawyers in Poland should help the client to find a suitable office and the English speaking accountants.</span></p><h2><span style="font-size: 12pt;">2. Can a foreigner set up a company in Poland?</span></h2><p style="text-align: justify;">There are no restrictions for foreigners (natural persons) to set up a limited company in Poland. Anybody can do this. There are no restrictions also to be appointed to the board of directors. Anybody who is a natural person can be appointed to the board of directors. Signing the employment agreement with a company is another issue. It usually requires obtaining a work permit by people outside the EU but being on the board is not considered to be an employment in Poland.</p><h2><span style="font-size: 12pt;">3. Is Poland good for business?&nbsp;</span></h2><p style="text-align: justify;">Poland is very good for doing business. &nbsp;Often, Poland is referred to as an economic success story and I fully subscribe to this point of view. Over the last three decades Poland has become the most successful economy in Europe. Poland has been always stuck between two superpowers Germany and Russia which has never been easy but after the fall of the Soviet Union in 1990, we have managed to change this unfortunate position into an advantage. Poland&rsquo;s pivotal position between West and East positively stimulates its industrial development.</p><p style="text-align: justify;">Poland is located in the heart of Europe which makes it the perfect investment location for companies needing to export products both in eastern and western directions. On the one hand, companies located in Poland can benefit from a strong economic relationship with Eurozone, having free trade access to the EU market and standardized regulations. On the other hand, the Polish economy is stable and resistant to any economic crisis thanks to having its own currency (Polish zloty) and the costs are lower than in the EU.</p><h2><span style="font-size: 12pt;">4. What is the best business to start in Poland?</span></h2><p style="text-align: justify;">There are many sectors to choose from. Transportation, warehouses, infrastructure, services, IT industry, fintch, real estate in general &ndash; these are just several examples.</p><p style="text-align: justify;">Fintech industry is really shining. Being the largest market in Central and Eastern Europe, the Polish fintech industry is doing very well especially in the banking sector and in industries such as payments and insurance. Several factors have an influence on the development of the fintech sector: innovation in mobile technology, the availability of infrastructure for cashless payments and plenty of highly qualified, hard-working, top-class IT specialists. Warsaw is considered a fintech hub in the region.</p><p style="text-align: justify;">In 2018, Poland, as the first country in the region, had its market rank changed by FTSE Russell index agency, moving up from &ldquo;emerging&rdquo; to &ldquo;developed&rdquo;. The Warsaw stock exchange is doing well, which clearly indicates the maturing character of the Polish economy and the rising capital market quality.&nbsp;</p><p style="text-align: justify;">Poland is planning some big projects in the nearby future, including big infrastructural projects. One of the megaprojects is the construction of the central airport which is planned as Poland's most important infrastructural investment and a transit hub which will integrate air, rail and road transport. It will be built 37 km from Warsaw and is planned to initially service 45 m passengers. Their number is to grow to 100 m. The first stage of the project is to be completed by the end of 2027.<br />&nbsp;<br />Another example is the Baltic Pipe which is a unique opportunity for Poland to become a regional power broker. The Baltic Pipe is a natural gas pipeline between Norway and Poland. It is a strategic infrastructure project to create a new gas supply corridor. When completed in the second half of 2022, it will transport natural gas from the North Sea to Poland via Denmark.</p>