While rarely seen as a European economic powerhouse, the low cost of labour and living in Poland, accompanied by a hard-working local workforce, make Poland a great nation for an SME to establish an international presence.
The Polish economy continues to grow, ensuring that this country lays the groundwork for a much more significant presence in the global business picture in years to come.
Does Poland welcome overseas businesses?
If you can complete the necessary steps to gain access to Poland and start a business, the nation is welcoming to foreign investment – especially if your business idea is forward-thinking and will plug some of the skills gaps in the country.
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What industries are most popular in Poland?
Poland’s economy has long been dominated by agriculture, construction, and mining, but in recent years, a focus has been placed on real estate, financial services, and manufacturing. Poland is also attempting to build a reputation in the realm of ICT, so any tech-centric business is likely to be welcomed.
Is it easy to set up a business in Poland?
If you are an EU citizen, starting a Polish business is very simple. If not, you will need to jump through multiple hoops to gain access to the country and become recognised as a resident before you get started.
Assuming that you hold an EU passport – or can partner with somebody who does – here are the steps to opening a business in Poland:
How to set up a business in Poland
- Decide on your business model and structure
See the section of this guide about Polish business entities
- Locate a trading address in Poland
You’ll need a local address to register a company
- Choose your business name
Be sensitive to any cultural connotations that you may not be aware the name has in Poland
- Prepare articles of registration for your business
And have these ratified
- Register the business with the Krajowy Rejestr Sądowy (National Court Register)
If you are a sole trader, register with the Centralna Ewidencja i Informacja o Dzoałalności Gospdarczej (Central Register and Information of Economic Activity, or CEIDG)
- Register with the Zakład Ubezpieczeń Społecznych
This is the Polish social security office
- Register with National Revenue Administration
And acquire your taxpayer status
You are not legally obligated to open a Polish bank account to start trading, but you’ll need this when the time comes to start paying taxes, so there is little point in delaying the inevitable.
Can I run a business in Poland while living overseas?
You must hold an EU, EEA, or Swiss passport to open a Polish business and live overseas. Anybody else will need to apply for a visa and residence card and start their business from within Poland. You may need to partner with a Polish local to get your company up and running.
Cultural considerations when running a business in Poland
If you wish to trade in Poland, you will need to understand some of the local business culture. Things to bear in mind include:
- If possible, arrange for a third party to introduce you to Polish associates and vouch for you. This will help you build trust
- Punctuality is a big deal in Poland, though your associates may arrive 10 or 15 minutes late to a meeting as a “power move”
- Always dress conservatively and behave as formally as possible until invited to relax a little – Polish business affairs are defined by propriety and hierarchy
- Expect straight-talking from your Polish associates. No means no – do not waste your time trying to change minds; you’ll just be considered belligerent and rude. Move on and take a different tack in the negotiation
- Decisions are not made quickly in Poland, so be prepared to be patient
- Polish business associates are not interested in waffle or empty promises. They spent years suffering under communist propaganda. Get to the point and stick to the facts when discussing business
What business structures are supported in Poland?
There are three primary business structures supported in Poland.
| Type of Polish business entity | What is it? |
|---|---|
| Działalność Jednoosobowa | A sole trader. You will pay considerably more tax as a sole trader than as a registered business. |
| Spółka z ograniczoną odpowiedzialnością (Sp.z.o.o.) | A standard limited liability company with all the legal protection this status provides. This is the most popular business structure in Poland. |
| Spółka Akcyjna (SA) | A public company which sells shares to the public. This business model is more expensive to set up and involves more regulation and administration. |
Alternatively, you can open a branch of your overseas business in Poland. The attraction here is there is no minimum capital requirement, though you will not enjoy any legal or financial separation between your parent company and Polish business affairs.
Taxation in Poland
If you want to do business in Poland, you must understand the taxation rules and regulations that will impact your bottom line.
What is the corporate tax rate in Poland?
Poland operates a standard corporate tax rate of 19% on all annual profits. Poland has a double taxation treaty with the UK, so you will not be taxed twice on any business profits generated in Poland.
What are the employee income tax brackets in Poland?
Employees in Poland will need to pay income tax on their wages. Income tax in Poland is extremely simplified, with just two scales.
| Annual salary | Income tax rate |
|---|---|
| ZŁ199,999 or lower | 12% |
| ZŁ120,000 or higher | Flat fee of ZŁ10,800, plus 32% of salary |
These income taxes must be withheld by an employer at the point of payroll, alongside an employee’s social security contributions to the Zakład Ubezpieczeń Społecznych. These break down as follows.
- 11.26% of salary (capped at ZŁ177,660) to the pensions and disability insurance fund.
- 2.45% of salary to the sickness insurance fund.
How are taxes paid in Poland?
The Polish tax year mirrors the calendar year, running from January 1st to December 31st. All tax reports must be filed with the Ministry of Finance, and accompanying payments must be made, by April 30th of the following year.
Payroll and hiring employees in Poland
Hiring the right talent can make or break a company. Ensure your Polish business interests are staffed by the best possible talent.
Does Poland welcome overseas talent?
As a rule, the Polish authorities prefer to fill job vacancies with the local labour force, keeping the unemployment rate for Polish citizens as low as possible. As with many nations, though, some industries are considered to have substantial skills gaps – most notably the following:
- Engineering
- Transport
- Financial services
- Technology
- Human resources
- Food preparation
Poland is also frequently on the lookout for blue-collar workers, especially in factories, warehouses, and agricultural workplaces. Experienced, director-level employees for existing businesses that wish to move to Poland will also typically be welcomed.
Who needs a visa or work permit to work in Poland?
Anybody with an EU, EEA, or Swiss passport can work in Poland without restriction. If you are from a third country, including the UK, you will need to apply for a work permit to be employed in the country legally.
Any non-Polish national will also need a residence card. A temporary residence card will be valid for five years, and a permanent residence card needs to be updated every decade.
Apply for a startup visa if you’re moving to Poland to start a business. If you’re looking to import a non-management employee, a standard Type A work permit will be suitable – directors of a Polish company need to apply for a Type B work permit, but only after they have served your business for six months.
What employee benefits are compulsory in Poland?
Employees of a Polish business are entitled to the following mandatory benefits by law.
- Minimum of 20 days of annual leave, rising to 26 days after 10 years of service. This holiday allowance must be honoured and can be rolled over to the following year if requested
- Contribution of 16.26% of salary (capped at ZŁ177,660) to the pensions and disability insurance fund
- Contribution of 1.67% of salary (if your business employs less than nine employees) or 0.67 – 3.33% (for companies with more than nine employees – exact contribution depends on industry) to the accident insurance fund
- Contribution of 2.45% of salary to the labour fund
- Contribution of 0.10% of salary to the employed guaranteed benefits fund
- Paid overtime if an employee works more than 48 hours in a single week
- 80% of salary payable for employees under the age of 50 on sick leave for up to 33 days; 14 days of payable sick leave for employees aged older than 50. 100% of salary is payable if an employee is pregnant, injured travelling to or from work, or hurt while working
- 20 weeks of maternity leave, paid at 100% salary by the Zakład Ubezpieczeń Społecznych
- 14 days of paternity leave, paid at 100% salary by the Zakład Ubezpieczeń Społecznych
Employment law considerations in Poland
The minimum wage in Poland is ZŁ3,010 per month.
Employment law in Poland is generally considered relatively lax, especially for workers over the age of 50, so employees of a great many industries form and join trade unions. Work with these unions to keep employees content and remain on the right side of any agreements.
One area of Polish law that is strict is termination. If you wish to terminate an employee, you will need to put this in writing, explaining your reasoning, and inform the employee they have 21 days to file a dispute with a local Labour Court. The trade union should also be notified, if applicable.
If the employee takes you to Labour Court and wins a case of unfair dismissal, they will be reinstated and owed back pay for the period they were not working.
Courts often side with employees in these cases unless you can provide evidence of gross misconduct or breach of contract, so it’s advisable to avoid instant termination without notice or severance pay – Polish law does not recognise “at will” hiring and firing.
Cultural considerations when hiring employees in Poland
If you wish to run a business in Poland that relies upon the local labour force, ensure you understand some of the nuances you will encounter. These include:
- Personal and professional lives can sometimes bleed into one in Poland. Expect your employees to spend time together outside of work and invite you along
- Most Polish employees will also be open to receiving business emails, texts or phone calls outside of working hours
- As salaries tend to be quite low in Poland, it is not uncommon for employees to hold more than one full-time job. If you want your employees to dedicate themselves to your business alone, you’ll need to reward them appropriately
- Most Polish employees will dress smartly as a mark of respect to their employer, but the idea of “casual Friday” is quite common in many Polish workplaces
FAQs about setting up a business in Poland
Still have questions or are seeking a swift answer to a basic query? Here are some of the most frequently asked questions about establishing a business in Poland.
If you wish to start a new venture in Poland, you can operate as a Działalność Jednoosobowa (sole trade), Spółka z ograniczoną odpowiedzialnością, aka Sp.z.o.o (a limited liability company), or a Spółka Akcyjna, aka SA – a public company floated on the stock exchange. Alternatively, just open a Polish branch of your existing company.
Setting up a business in Poland is pretty simple – it should not take more than a couple of weeks to get your business venture off the ground.
Once you have factored benefits on top of employee salary, expect to pay around 1.2 times an employee’s annual wage.
You’ll need a minimum share capital of at least ZŁ5,000 (roughly £925) to open a limited liability company in Poland and double this to start a public company.
You will need a Polish bank account to process tax payments, so while it’s not a legal requirement to have a local bank account when you start your business, opening one ASAP is highly advisable.
Most Polish businesses operate a typical Western working pattern – 40 hours per week, spread over Monday to Friday.
Social services contributions take care of the basics for Polish employees, but private healthcare, pension pots, or life insurance will always be attractive to potential employees.
Employees can only be terminated without notice in Poland for gross misconduct or severe breaches of contract. In any case of termination, employees must be notified in writing, given a reason for the decision, and informed they have 21 days to file a claim for unfair dismissal with the Labour Court.
All employees in Poland are entitled to a minimum of 20 personal holiday days. After 10 years of service, this allocation typically rises to 26 days.
You will be welcome to open a branch of an international-renowned business in Poland. Many prefer to open a subsidiary company to create a separation of legal and financial affairs, but unlike a limited liability company, there is no minimum share capital required to open a branch in Poland.
If you are not an EU, EEA, or Swiss citizen, you’ll need a visa and/or work permit to work in Poland. You will also need a residence permit unless you are a Polish citizen.
If you are moving to Poland to start a business, you should apply for a startup visa. Most standard employees in Poland will find employment based on a Type A work permit. These are not freely granted, though – the Polish authorities will always prioritise employment opportunities for the local workforce.
A work permit costs around ZŁ375 (£70) in Poland, plus any processing fees that may be applicable.