Poland

Capital: Warsaw
Largest city: Warsaw
Official Language: Polish
Government: Unitary semi-presidential constitutional republic
Area: 312,696 km2
Population: 38,268,000
Currency: Zloty (PLN)
GDP total: PLN 5.082 trillion (USD1.363 trillion)
GDP per capita: PLN 134,074.66 (USD35,957)
Time zone: UTC +1/UTC +2
Calling code: +48
Internet TLD: .pl

[Source: Wikipedia]

No. of domestic companies: 2.397.449 as at 2020
No. of foreign companies: 92.251 as at 2020
[Source: coig.com.pl]

Principal Legislation governing Companies

  • The Commercial Companies Code of 15.09.2000
  • The Civil Code of 23.04.1964 – for the civil law partnership
Q&A on Company Law
  1. What are the different kinds of legal entities available in Poland?
    The following kinds of entities can undertake economic activity in Poland are:

    • Legal entities under private law:
      • Natural persons (can perform business activities as a sole entrepreneur, after signing up to the entrepreneur register)
      • Legal persons (limited liability company, joint-stock company, cooperative, associations, foundations)
      • Organisational units without legal personality (partnership, general partnership, limited partnership, partnership limited by shares)
      • Foreign entities (branch, representative office)
    • Legal entities under public law (state enterprises, state owned companies)
  2. What are the laws and regulations governing legal companies in Poland?
    • Kodeks Cywilny (Civil Law Code)
    • Kodeks Spółek Handlowych (Commercial Companies Code)
    • Ustawa – Prawo przedsiębiorców (Entrepreneurs Act)
    • Ustawa – Prawo spółdzielcze (Law on Cooperatives)
  3. What are the procedures and requirements for incorporating or registering a company in Poland?
    Individual business activity must be registered in the Central Register and Information on Economic Activity (so called: CEIDG)
    Companies must be registered in the National Court Register (Krajowy Rejestr Sądowy), which is a public register kept by a registry court.
    Example Procedure for a LLC in Poland:
    The articles of association must be concluded in a form of a notarial deed. Then the application with all the required documents must be sent to the register court. If there are no objections, the court enters the relevant content to the register. If circumstances relevant to registration change, this must be reported to the commercial register so that the information is always up-to-date.
    An entry in the commercial register is mandatory. After registration, the company will automatically be reported to the Social Insurance Institution (ZUS) as a payer of insurance contributions. The company must submit a registration to the local tax office as well.
    If the company’s business field is regulated (for example some financial services, oil industry, trade with alcohol etc.), the necessary licence should be obtained.
    If the company wants or is obliged to be a VAT payer, it must be registered with the Tax Authority as a VAT payer. To buy services from other companies in the EU and settle VAT on these purchases, the company should also register as a VAT-EU taxpayer.
  4. What are the reporting requirements for companies in Poland?
    Due to the EU Directive 2014/95, there is Corporate Social Responsibility (CSR) reporting obligation for large public-interest companies with more than 500 employees. This covers approximately 6,000 large companies and groups across the EU, including listed companies, banks, insurance companies and other companies designated by national authorities as public-interest entities.
    Separate reporting requirements apply for listed companies under the Act on Trading in Financial Instruments.
  5. What are the procedures and requirements for foreigners and/or foreign companies to establish a company or business in Poland?
    EU citizens, as well as nationals of the European Economic Area (EEA) states including Norway, Liechtenstein and Iceland, benefit from the freedom of establishment and freedom of trade applicable in the Schengen area. This means they do not need a temporary residence permit or an unlimited settlement permit.
    Non-EU citizens require a residence permit. A business visa is initially required for entry into Poland.
    Step 1: Apply for a business visa or a residence permit for Poland
    Step 2: Choose a suitable legal form and, if necessary, conclude the articles of association.
    Step 3: Register a trade and enter the company in the applicable commercial register

    • Central Register and Information on Economic Activity (Centralna Ewidencja i Informacja o Działalności Gospodarczej, CEIDG)
    • Commercial Register (Krajowy Rejestr Sądowy, KRS)

    Every foreigner has the right to undertake and conduct business activity in the form of:

    • a limited partnership
    • a partnership limited by shares
    • a limited liability company
    • a joint stock company

    Each foreigner may acquire the shares or stocks, unless international agreements provide otherwise.
    However, a foreigner’s country of origin as well as the status of his residence permit has significant importance for the possibility of conducting business activity.
    Activity of foreign legal entities in Poland:
    A foreign entrepreneur may conduct business in Poland by:

    • a branch through which they carry out economic activity to the extent that they do in the country of its seat;
    • a representative office that allows a foreign entrepreneur to perform activities only with respect to advertising and promotion.

    A foreign entrepreneur’s representative office may be entered in the register only for a definite period of time – 2 years together with the right to continue business activity for the next 2 years.
    The application for the establishment of a foreign entrepreneur’s branch does not need to include information on the person authorised to represent the foreign entrepreneur in the branch; the notarized specimen of the authorised person’s signature does not need to be submitted.

  6. What are some of the challenges that foreign companies should take into consideration prior to entering the industry or market in Poland?
    Some activities require registration in a specific legal form or reservation for persons with specific competences (for example some advisory and financial services).
    Restrictions may also result from the scope of activity carried out. For some types of activities, the law does not provide for registration with CEIDG – the entrepreneur must register the company in the National Court Register. Examples include the cultivation of certain plants and animals, insurance and reinsurance, fire protection, trade unions and sports clubs.
  7. What are the duties, responsibilities and liabilities of directors in Poland?
    Duties and responsibilities:

    • Responsibility for the proper organisation of the company (e.g. by preparing the annual financial statements, safeguarding the share capital against prohibited disbursements, etc.)
    • Control of the observance of general and special regulations (compliance)
    • Duty of loyalty (avoiding conflicts of interest, non-competition during the term of office, etc.)
    • Convening and participating in the shareholders’ meeting (e.g. in the case of amendments to the articles of association, approval of the annual financial statements or in the case of unusual high-risk transactions)
    • Constant monitoring of liquidity and indebtedness as well as ensuring proper accounting
    • Careful written documentation of the company’s activities
    • Immediate duty of disclosure and information on company matters
    • Careful preparation of business and entrepreneurial decisions
    • Duty to file for insolvency if needed

    There are 2 kinds of liabilities:

    • Internal civil liability of a managing director towards the company and the shareholders:
      • If he does not observe the above principles, the company may claim damages against him.
    • External liability of a managing director towards third parties:
      • Personal liability of a director
        • in case of infringement
        • in tax law
        • in social security law
        • in representation of the company
        • in the insolvency
  8. What are the requirements or criteria to be satisfied for an individual to qualify as a director of a company?
    The managing director must be a natural person of unlimited legal capacity.
    As a rule, the appropriate legal basis for the stay of a person appointed to the management board will be a visa for the purpose of work, issued for the period indicated in the work permit, but not longer than the visa validity period (from 3 months to 1 year).
    A foreign member of the management board who stays in Poland for a period not exceeding 6 months in total during the consecutive 12 months is exempt from the obligation to have a work permit. The reference period here is any consecutive 12-month period which need not coincide with the calendar year.
  9. What are the requirements or criteria to be satisfied for an individual or a legal entity to qualify and be a shareholder of a company in Poland?
    In general, there are no limits on a foreign investor being a shareholder.
    A shareholder in a limited liability company may, as a general rule, be, apart from a legal person or an imperfect legal person, any natural person with legal capacity. However, persons who: in the last 5 years have been punished for a monetary offence, or who are prohibited from doing business or taking a specific position, may not take part in the shares. Even a minor may become a shareholder of a limited liability company, as the Commercial Companies Code does not require full legal capacity. Importantly, however, minors cannot exercise the rights offered by participating in the company and, until they reach the age of majority, act only through their representative.
  10. How are shares in a company allotted and/or offered in Poland?
    In a limited liability company, the acquisition of shares requires a proper form – the agreement must be in the form with a notary’s certified signature.
    The shares can be allotted by increasing the share capital or a share split.
    In a joint stock company, the form of transfer of shares depends on whether the shares are registered shares or bearer shares. The transfer of registered shares should be made in writing, by making a statement on the share document or in a separate document and requires possession of the share document to be transferred.
  11. What are the corporate governance practices in Poland?
    The primary source of corporate governance rules is the Commercial Companies Code, Labour Law and Minimum Wage Act.
    Due to antidiscrimination regulations it is not permissible to discriminate against an employee, either directly or indirectly, especially on the grounds of a person’s sex, age, disability, race, religion, nationality, political beliefs, trade union membership, ethnic origin, denomination, sexual orientation, as well as employment for a definite or indefinite term or on a full-time or part-time basis.
    The minimum wage is also regulated by Polish law. Currently, the minimum wage is 2800 PLN.
    The Warsaw Stock Exchange, for issuers of shares admitted to trading on the WSE regulated market, has prepared its own set of corporate governance principles and rules of conduct applicable to listed companies.
  12. Who are the regulators for corporate governance in Poland?
    The corporate governance structure and institutions were evaluated as moderately strong in the 2017 report of European Bank for Reconstruction and Development. There are international audit and law firms and corporate governance training providers for directors having a material presence in the country. Also, international rating agencies are active in Poland. There are also numerous institutions and NGOs active in the promotion of good corporate governance. Corporate Social Responsibility has become an idea playing a very important role in the activity of leading companies in Poland.
  13. What are the taxes which apply to companies in Poland?
    • Income taxes
      • Income tax
      • Corporate income tax
    • Value added tax
    • Tax on civil law transactions
    • Property tax
    • Excise duty
  14. Are companies in Poland subject to competition laws and regulations in Poland?
    The Polish legislator has regulated the competition law in the Act to Protect Fair Competition and the Consuments (ustawa o ochronie konkurencji i konsumentów) However, agreements restricting competition are judged under EU law if they are capable of affecting trade between the Member States of the European Union.
  15. What are the data privacy laws in Poland that companies should be aware of?
    The Data Protection Act (ustawa o ochronie danych osobowych) regulates the handling of personal data. Since 2018, this law has been adapted to the EU General Data Protection Regulation.
  16. What are the company insolvency laws and regulations in Poland?
    Insolvency proceedings are regulated by Insolvency Law and Restructuring Law. The insolvency proceedings are initiated by the application of a debtor or a creditor. The proceedings should be opened if the insolvency estate covers the costs of the proceedings and the application is justified (acute or imminent insolvency, over-indebtedness). As soon as the court decides to open the proceedings, an insolvency administrator is appointed. He divides the insolvency estate among the creditors.
    If a company is not insolvent, but there is a threat of insolvency, restructuring proceedings should be opened. The purpose of restructuring proceedings is to avoid a debtor being declared bankrupt by enabling him to undergo a restructuring process and reaching an arrangement with its creditors instead.
  17. Have there been any recent reforms or regulatory changes pertaining to the company law in Poland?
    New regulation of holding companies and corporate groups will come into force in the beginning of the second half of 2021. The reform aims to regulate the relations between companies within the group.
  18. What are the main changes within company law in Poland that differ to company laws in other European countries?
    Due to membership in the EU, the provisions of EU law also apply in Poland in addition to the national regulations. Entrepreneurs enjoy freedom of establishment. Companies have the right to carry out their activities in another EU member state through a branch and to have legal capacity there.
  19. In light of the Covid-19 pandemic and various governmental movement control orders in Poland, has the Polish government implemented changes or temporary orders to assist companies to cope with financial constraints?
    The following measures have been taken by the government:

    • protection of jobs and employee safety
    • financial assistance for the self-employed
    • tax aid measures: deferment or exemption from taxes and insurance contributions
    • specific help for the lines of business most affected by the pandemic
    • local help – temporary rent reductions, deduction or exemption from local taxes

    All foreign companies registered in Poland are eligible for help.

ABOUT THE AUTHORS

Dr. jur. Jan Muszyński
Attorney at law in Poland, Von Zanthier & Schulz

Jan Muszyński graduated from the Adam Mickiewicz University in Poznań with a degree in law in 2012. After graduation, as a scholarship holder of the Konrad Adenauer Foundation, he received a doctoral degree in law at the University of Bayreuth. His doctoral thesis was published by the prestigious Berlin publishing house Duncker & Humblot. He has been working with the law firm VON ZANTHIER & SCHULZ since 2019, specializing in providing ongoing advice to entrepreneurs especially in the areas of labor law, corporate law, including M&A transactions and business law.

Paulina Czaja
Trainee attorney at law in Poland, Von Zanthier & Schulz

Paulina Czaja studied law at the Adam Mickiewicz University in Poznań. In 2019 she graduated German law studies at the Georg-August University in Göttingen, obtaining the Master of Laws degree (LL.M.). During her law studies Paulina Czaja gained professional experience working for Polish and German law firms specializing in legal advisory in corporate law.
She cooperates with VON ZANTHIER & SCHULZ since February 2020. In January 2021 Paulina Czaja is beginning her legal traineeship at the Regional Bar Association in Poznań.

ABOUT THE FIRM

Name: Von Zanthier & Schulz
Address: Von Zanthier & Dachowski Kancelaria Prawnicze sp. K.ul. Garabry 56, PL 61-758 Poznan
Telephone: 0048 61 85 82 550
Email: poznan@vonzanthier.pl
Website address: www.vonzanthier.com
Key contact: Dr. jur. Jan Muszyński, Lawyer, muszynski@vonzanthier.pl
Established: 1995
Number of lawyers:
Languages: German, English, Polish

Brief description:
We are an interprofessionally organised law firm of solicitors, auditors and tax consultants with offices in Berlin, Poznań and Warsaw. We offer consultancy services in Germany in the field of German business and tax law and can assess your economic situation. Since 1992, we have been dealing with international matters and guiding you in national and cross-border law. In Poland, we can support you with Polish business and tax law.

Key practice areas:
Commercial law, Corporate law, Real Estate law, IT law, Labor law, Law on Renewable Energy, Medicine law, Tax law and Bookkeeping

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