Poland Offshore Company

Poland is quickly becoming one of the best legal offshore jurisdictions to set up an international business in the form of a Poland Limited Liability Company (LLC). The company codes can be found under the Polands' Commercial Companies Codes. There are several different company structures in Poland however the LLC offers the most benefits for non-residents. Poland has maintained low corporate tax rates and are now planning to implement a zero percent corporate tax rate.  This, among various other advantages, make it an ideal up-and-coming jurisdiction to consider.  

Advantages & Top Uses

• Poland’s major advantage is its tax-friendly legislature, which will now be reducing corporate taxes to zero percent 
• Affordable accounting and administration services.
• Access to a cheap and skilled workforce.
• Low license and maintenance fees.
• 100% foreign ownership is permitted.
• Minimum of one director/shareholder is required who can be the same person.
• Low minimum capital requirements.

• Limited liability for shareholders, whose liability is limited to the capital they have invested in the company.
• The registration process is both fast and easy.
• Poland have a highly efficient and innovative banking system.
• Poland has a strong economy with good trade relations with Germany and other European powerhouse economies.
• Virtual offices are allowed, easily available, and affordable.
• For those looking to invest in the wider market, Poland offers excellent opportunities with high returns. Poland’s real-estate market is a prime example, with average annual returns on investment at 10%. 
• Poland is one of the more stable EU nations with a good economy and infrastructure and low unemployment rates.

Main Uses

• International trade and access to European trade zone
• Intellectual property protection
• Holding company
• Estate planning 
• Asset protection
• Tax planning and minimization
• Real estate

Key Corporate Features

Requirements for Incorporation

The following is required to complete the registration of a Poland LLC:

• The Articles of Association need to be filed: The articles should first be signed in the presence of a Polish notary who then prepares them as a “notary deed”. The articles can be signed either by the shareholder/s themselves or by an attorney with notarized power of attorney. 
• The initial share capital must be gathered before registration, and a declaration of subscription of shares must be prepared.
• The relevant corporate bodies must be appointed, including the directors, Supervisory Board (if any), and registered agent.

Once the required documents have been obtained, they should be filed in the commercial registry, and the LLC will officially become a legal entity upon acceptance. 

The articles of incorporation must include:

• The name and type of company which is being formed.
• The company’s purpose and the expected duration of its life in the case that the LLC is being formed for a definite period only. In the case that the LLC has an indefinite lifetime, this too should be stated in the Article of Incorporation.
• The amount of share capital, the number of shares being issued, and the par value of each share.
• The operational rules and regulations of the company, including the responsibilities of the corporate entities, matters relating to contributions and how profits will be distributed.

ncorporation Formalities

When incorporating a company in Poland, a thorough understanding of the required documentation is essential. Furthermore, the S24 system expedites online registration, streamlining the incorporation process.

Required Documents and Procedures

To successfully incorporate a company in Poland, entrepreneurs must prepare a collection of legal documents. This typically includes:

• Identification: A valid ID or passport for all directors and shareholders.
• Articles of Association: Legally binding document outlining the company's structure and governance.
• Registry Forms: Necessary forms for the National Court Register (KRS).
• Power of Attorney: If a representative is handling the incorporation, a notarized Power of Attorney is required.

The incorporation process itself involves several steps:

1. Notarization of the Articles of Association.
2. Provision of contributions to cover the share capital.
3. Registration for a Tax Identification Number (NIP).
4. Application for registration with the National Court Register (KRS).

Utilizing the S24 System for Efficiency

The S24 system is an electronic platform designed for the swift registration of companies in Poland. The system allows for the completing of many steps online, which can significantly reduce the time required to incorporate a business.

Key advantages of the S24 system include:

• Electronic Submission: Documents can be submitted online, avoiding physical paperwork.
• Streamlined Process: Registration can often be completed within 24 hours.
• Remote Access: Entrepreneurs can register a company in Poland from abroad.

To use the S24 system, the following is needed:

• A qualified electronic signature or a signature confirmed with an ePUAP trusted profile.
• The necessary incorporation documents prepared in accordance with the S24 system's requirements.

Using the S24 system requires the entities to prepare the same set of documents as traditional registration but in an electronic format, making it a preferable option for many due to its efficiency and simplicity.

Types of Business Entities in Poland

When forming a company in Poland, entrepreneurs can choose from several business structures, each catering to different business needs and providing unique operational benefits.

Limited Liability Company (LLC)

A Limited Liability Company (LLC), known in Polish as spółka z ograniczoną odpowiedzialnością (sp. z o.o.), is one of the most popular legal forms for conducting business in Poland. The liability of shareholders is limited to their contributions to the company's share capital. This legal form is favored due to its relative simplicity in formation and operation, as well as the protection it offers to its shareholders' personal assets.

Joint Stock Company

The Joint Stock Company (spółka akcyjna, S.A.) is designed for larger businesses, with a structure that allows for the raising of capital through public or private share issuance. Shareholders in an S.A. company also benefit from limited liability, being at risk only up to the amount of equity they invest. The formation of a Joint Stock Company is a choice for businesses considering public listing or seeking to engage in extensive capital-intensive activities.

Partnerships

There are several types of partnerships in Poland, suited to different business collaboration needs:

• Registered Partnership (spółka jawna, Sp.j.): A structure where all partners bear unlimited liability for the obligations of the partnership proportionally to their contribution unless the partnership agreement stipulates otherwise.
• Professional Partnership (spółka partnerska): Specifically for professionals offering licensed activities; partners are liable only for their own actions and not for the obligations of the partnership related to other partners' activities.
• Limited Partnership (spółka komandytowa, Sp.k.): Comprises at least one partner with unlimited liability (general partner) and at least one partner with liability limited to the amount of capital contribution (limited partner).
• Limited Joint-Stock Partnership (spółka komandytowo-akcyjna): A hybrid entity combining features of a Limited Partnership and a Joint Stock Company; suitable for those seeking to raise capital while having partners with limited liability.

Corporate Taxation

Currently, the corporate tax rate in Poland is a flat 9% on profits up to EUR 2 million, and 19% for all profits above that. This is already on the low side. However, from 1 January 2021, Poland will introduce a 0% corporate tax rate on all profits below PLN 100 milllion (approximately EUR 22 million). These major tax reductions which will be coming into effect are an incentive to open an offshore business in Poland now. It is not clear whether the current dividend tax rate of 19% will also be subject to reduction. 

As is always the case, citizens of the US and other countries which tax their citizens on all worldwide income must declare their income to their local tax authorities and will be subject to income tax in their own jurisdiction. This means that a low-tax offshore company structure which is available in Poland is especially beneficial for those who are tax residents of a low-tax jurisdiction themselves which do not tax their citizens heavily on offshore income.

Fiscal Incentives and Special Economic Zones

Poland offers a conducive environment for company formation, providing an array of fiscal incentives within its Special Economic Zones (SEZs) to spur entrepreneurial investment and economic growth.

Tax Incentives for Entrepreneurs

The Polish Investment Zone (PIZ) extends income tax exemptions to entrepreneurs operating in any part of the country, moving beyond the previous bounds of the established SEZs. The Act of 10th May 2018 reformed these incentives to accommodate the current market dynamics and the needs of entrepreneurs. The distinct benefits include:

• Corporate Income Tax (CIT) or Personal Income Tax (PIT) exemption, depending on the legal form of the business.
• Tax incentives are contingent upon the fulfillment of specific investment criteria and the obtaining of a relevant permit.

The incentives are strategically formulated to support the establishment and development of enterprises, especially production plants which can translate into eligibility for an income tax exemption.

Corporate Details

Anonymity, Confidentiality and Disclosure

In general, Poland is not known for its high degree of anonymity and confidentiality compared to other popular offshore jurisdictions. The company records which are filed in the Commercial Registry are publicly viewable, which includes the names of the shareholders and directors. However, nominee shareholders/directors can be used to obtain confidentiality. 

Company’s are required to disclose information about their annual profits/losses and other relevant financial records. Poland banks do take client privacy seriously, and so there is a certain level of nondisclosure assured in Poland. 

Company Shares

Shares are issued and denominated by a nominal value in PLN. The minimum issued share capital is PLN 5,000. Shares can be 100% foreign-owned. The Articles of Association stipulate the total issued share capital, the number of shares, and nominal value of each share.

Required Capital

Minimum required initial share capital is PLN 5,000 (approximately EUR 1,120).

Directors and Shareholders

A minimum of one shareholder is required to form a Poland LLC. There is no maximum number of shareholders. The shareholder can a legal entity (natural persons and/or corporate bodies are permitted) of any nationality. The only restriction is that if there is only one shareholder, it cannot be another single-shareholder company. 

In addition, a Board of Directors should be appointed with a minimum of one director. The directors can be appointed temporarily (one year or more) or indefinitely. All rules and requirements pertaining to the directors should be stipulated in the Articles of Association. The shareholder and director can be the same one person. However, in this case, all resolutions must be signed in the presence of an authorized Polish notary. 

The LLC may also appoint a Supervisory Board whose duties will be specified in the Articles of Association. Their role is slightly different to that of the directors, and they can act as mediators to resolve any conflicts between the board of directors and the company shareholders.

Trading Restrictions

There are no significant trading restrictions.

Principal Corporate Legislation 

The Polish Companies’ Code governs Polish LLC’s and sets out all relevant rules and regulations.

Type of Law

The Polish Legal system follows the Civil Law tradition.

Powers of the Company

A Poland LLC is regarded as a separate legal entity from its shareholders and directors. It has all the same powers and rights as a natural person. It therefore has the power to enter into legal contracts, hold property and assets, and engage in lawsuits in its own name. Shareholders are exposed to no personal liability, which means their liability is limited to their share contribution in the company.

Company Meetings

An annual shareholders meeting is required to deal with the important company issues such distributions of profits/losses, major company decisions, matters relating to company debt and/or loans, purchases and/or sales of real estate, and various other crucial matters. 

The Companies’ Code stipulates that the meeting should be held at the company’s registered office, unless the Articles of Association have designated a different location in Poland. Shareholders do not need to physically attend the meeting and can instead appoint a representative with Power of Attorney to attend.

Local Requirements

Poland LLC’s must maintain a local registered office address and local agent in Poland. Virtual offices are allowed so as to simplify the process and minimize costs.

Company Secretary

A company secretary is not required, but the company is required to hire a local registered agent to represent the company in Poland.

Language of legislation and Corporate Documents

Polish remains the standard language for all legislation, corporate documents, and is to be used whilst preparing financial statements. 

Audit and Annual Reporting Requirements

Poland LLC’s are required to report their annual financial statements, distributions, and other significant changes such as changes in ownership with the commercial registry. The company may be subjected to auditing in certain cases.

Exchange Controls

There are no exchange controls.

Financial Statements required

Annual financial statements are required. The accounting requirements are laid out by Poland’s Accounting Act of 1994. This act stipulates the standards for maintaining LLC’s annual accounting records and financial statements. These statements must show full records of the company’s profits/losses, revenue, expenses, and debts for each fiscal year. Financial records must be maintained in Polish and denominated in the Polish Zloty (PLN). 

Shelf Companies available 

Yes, shelf companies are available for purchase. However, registering a company from scratch is so quick, affordable, and easy, that shelf companies are not strictly required.

Time required to form an offshore company

A Poland LLC can be incorporated incredibly quickly. The process can be completed in as little as one business day, and it can be done entirely online.

Company Name Requirements and Restrictions

The name of the LLC must end with the abbreviation “sp. z.o.o.”, which stands for Spółka z ograniczoną odpowiedzialnością (Polish for “Limited Liability Company”). The name selected should be unique, should not be deemed offensive or inappropriate, and should not include any terms which require a special license/permission (e.g. insurance, reinsurance, bank, group, etc.).

The company name can be in any language provided the Latin alphabet is used.

Access to Double Tax Treaties

Yes, Poland has signed Treaties of Double Taxation Avoidance with numerous countries, including the US, the UK, New Zealand, Canada, Australia, Singapore, China, most of the European nations, and many more.

License Fee

The license registration fee is approximately PLN 600 (about EUR 135).

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