Many entrepreneurs think about opening a business in Europe or relocating an existing one. At the time, we chose Poland from all the EU countries. On our blog, you will find many articles about life and business here. We write about taxes in Poland for entrepreneurs, opening a company, and the advantages business owners get. It might seem that, since we are developing entrepreneurship here, we are encouraging you to do the same. In this article, we will show the real picture of doing business in Poland so that you can put all the pieces together and consciously decide whether you need a business in Poland or not.
Why foreigners open a legal entity in Poland
The Republic of Poland has several advantages among EU countries. In 2018, leading EU economists recognized it as a country with a developed market and included it in the list of developed market countries. This list includes 25 countries, including the USA, Japan, and Austria. Poland has a stable banking system and high financial indicators.
Advantages of doing business in Poland for foreign citizens:
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Foreigners can register a company in Poland under the same conditions as local residents. Business ownership grants the owner and their family the right to temporary residence in Poland.
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Low financial entry barrier to the market. When registering a company, the authorized capital is from 5,000 PLN (slightly more than €1,000). The money does not necessarily have to be deposited into the company’s bank account; it can be transferred into assets (except for online registration). Assets can be stored in European banks, which are reliable and stable. During Poland’s accession to the EU, only one bank was closed, and all clients received compensation.
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Relatively low tax rates compared to other EU countries. The corporate income tax in Poland is 19%, compared to 30% in Germany. VAT is 23%, with reduced rates of 8%, 5%, 3%, 2%, and zero (depending on the type of activity). VAT refunds are also possible. Having a business in Poland allows the entrepreneur to become a full participant in the European market, and the company can legally operate in the EU.
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Stanislav TsysHead of UniConsultingAre you planning to start a business in Poland? Start a company or a private enterprise? We will help you bring your business to the Polish market from scratch until the first sales. We will develop: a strategy for entering the Polish market, open a remote legal entity or IE, will do accounting and registration of your employees. Leave an application for introductory consultation -
The tax office notifies entrepreneurs of audits 7 days in advance. The Polish government encourages foreign investments in the country’s economy. Entrepreneurs are offered grants, benefits from the Polish government and the EU, and access to special economic zones.
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A small business benefit is the cheaper labor market compared to Germany, Austria, and other European countries.
Realities of doing business in Poland:
- Taxes in Poland for entrepreneurs.
We have already discussed the tax system — Polish taxes are higher, especially compared to Ukraine. In Ukraine, a sole proprietor pays 5%, here the corporate income tax is 19%, and 17% if the owner wants to withdraw these funds as a board member, with VAT at 23% (there are situations where it’s 8% or lower). This needs to be considered when planning to enter the Polish market with your service/product.
And the government really invests and distributes taxes for the right things.
You can read more about comparing entrepreneurship in Ukraine and Poland here.
- Bureaucracy and strange rules.
This is not about bribes. This is one of the key differences between Ukraine, CIS countries, and Europe. Bureaucracy is reflected in paperwork and permits. This concerns working with accountants and interacting with government bodies. For example, if a person opens a “spółka” (company) and wants to manage it themselves, they need an additional permit to work in their own company. So, if you want to manage a company and work in it as an employee, you need two permits. In our understanding, this is strange. But this manifests in many areas. If you compare with Germany or Estonia, there is much more paperwork in Poland.
- In the Republic of Poland, there is no unified step-by-step system for measuring and a long feedback loop from accountants, banks, and suppliers.
If an entrepreneur wants to open another type of activity or install a cash register, there is no unified step-by-step checklist. We felt this when working with accountants and government organizations. In practice, it looks like this — we come to an accountant with a specific task. The accountant sends us to a lawyer, we go to them. The lawyer then sends us to a specialist who handles that area, and they send us to the office (administration). This cycle can go on for a long time to resolve just one issue.
- Startups, subsidies, and investments create greenhouse conditions where small businesses are barely survivable.
What this means is that in the Republic of Poland, and in Europe in general, people often create businesses to sell them later, rather than to develop them. This creates a situation where young entrepreneurs, receiving investments, do not understand the value of money. They damage their reputation, create unhealthy competition — by underpricing, buying ads in your market niche. As a result, there is a situation where many entrepreneurs here are playing at business rather than achieving goals, results, and growth.
- The lack of the opportunity to be a private entrepreneur.
Perhaps this restriction was created for a reason. But it is indeed a disadvantage. If an entrepreneur has a microbusiness and is not yet ready to work in another model, they are forced to open a legal entity in Poland, register in the social insurance system (ZUS), and so on. At the start, no one wants to deal with this — it’s additional time, money, and stress.
Life hack: If you study full-time in Poland, you can open a sole proprietorship. And if you’re no longer a student, you can join a business incubator, where for a small fee, the organization will handle this headache for you.
- High requirements for security and confidentiality.
This is quite a complicated matter. There is an organization called Urząd Ochrony Danych Osobowych, which deals with privacy protection, and if you don’t put a checkbox for the offer on your website, you may receive a fine.
Let’s consider a simple example. If you decide to move an existing online store to Poland.
On such a platform, you must have:
- A user agreement (regulations) formatted according to Polish law;
- Terms of use and cookies (“cookies”) in compliance with Polish law;
- Processing of user data according to RODO/GDPR.
Additionally, Polish online businesses will have difficulty functioning without systems like PayU or przelewy24.pl for online payments. When connecting these systems, they will also thoroughly check your website.
- Minor bias.
In Poland, you can view basic information about a company without having access to tax authorities, such as who the board members are and what the registered capital is. During negotiations for cooperation, a client or contractor can check this information, and if they realize that you are not Polish, it can add a level of bias. I wouldn’t say that Polish people oppress Ukrainian entrepreneurs or have a negative attitude toward migrants, but there is an increased trust among Poles toward Polish companies or contractors.
- Responsibility rests solely on you.
This refers to entrepreneurship or business owners. Having your own business in Poland means that you must handle the processes yourself and be competent. If you weren’t warned about something and a mistake happens, you will be responsible for it. Don’t expect that people will warn you about everything and explain everything in detail. You need to take the initiative and gather the information yourself.
The previous points have made it clear that things are serious. It’s not enough just to open a legal entity in Poland and hope that the company will run on its own. A serious and responsible approach is required here. This is what we encourage you to do.
From our side, the UniConsulting team is ready to share our knowledge and experience in running a business in Poland — assessing the market volume and its potential, registering a company, creating a strategy for entering the European market, and navigating the Polish tax system. Leave a request on our website, and our specialists will consult you on any questions you may have.
