Due to the ongoing military aggression in Ukraine, many domestic entrepreneurs were forced to change the structure of their business and relocate it to another location. Poland, which over the past year has become a true partner to Ukraine on the frontlines, is also one of the most convenient regions for business relocation. For several years now, this country has been encouraging the development of both national and foreign businesses, and in 2022, new regulations were passed to simplify business relocation for entrepreneurs with Ukrainian citizenship.
- What is needed for business relocation?
- Here are the main steps that every entrepreneur should take:
- Thus, the relocation starts with the business owner confirming the right to conduct business. For this, two documents are required:
- Confirmation of legal residence in Poland
- A residence permit is a document that grants the right to stay in Poland or another EU country. These documents include:
- What is PESEL and how to get it?
- Options for Relocating a Business from Ukraine to Poland
- Opening a Branch of a Ukrainian Company in Poland
- To register a branch of a foreign company in Poland, the following steps must be taken:
- Creating a New Company in Poland
- Opening a Limited Liability Company (LLC)
- Opening a Sole Proprietorship (SP)
What is needed for business relocation?
Despite numerous legal solutions simplifying the relocation of businesses from Ukraine to Poland, in practice, relocation can be a complex process requiring careful preparation and execution of necessary legal, tax, and business procedures.
Here are the main steps that every entrepreneur should take:
- Preparation of documents confirming the right to conduct business in Poland;
- Determining the legal form of the entity in Poland;
- Actual relocation of the business abroad, including the relocation of employees and equipment;
- Preparation of documents and tax declarations;
- Employment of staff.
Thus, the relocation starts with the business owner confirming the right to conduct business. For this, two documents are required:
- Confirmation of legal residence in the country;
- PESEL (Polish identification number).
Confirmation of legal residence in Poland
The possibility of legal residence in the country can be ensured if one of the following conditions is met:
- A valid document confirming the right to reside in the Republic of Poland;
- An application for temporary or permanent residence in Poland (pobyt stały lub czasowy);
- Having a Pole’s Card (Karta Polaka);
- Leaving Ukraine after February 24, 2022, and legally residing in Poland due to the situation in Ukraine — in this case, the PESEL number is issued with a UKR mark.
A residence permit is a document that grants the right to stay in Poland or another EU country. These documents include:
- Passport (biometric);
- Temporary protection certificate;
- Permanent residence permit;
- Temporary residence permit.
Due to the military conflict in Ukraine, another method of confirming legal residence in the Republic of Poland has emerged. According to the “Law on Assistance to Ukrainian Citizens Due to the Armed Conflict,” adopted on March 22, 2022, in the case of an armed conflict, one of the spouses has the right to open a business in Poland if they arrived in Poland due to the conflict.
What is PESEL and how to get it?
PESEL is a unique 11-digit number used for personal identification. It includes the date of birth, serial number, gender, and a control digit. The number is assigned to both residents and non-residents.
Submitting a special application to obtain PESEL allows for the creation of a profile for effective communication with government authorities and participation in electronic administration of the company’s activities.
Note! The application for PESEL must be submitted no later than 90 days from the date of entry into Poland. If you are unable to register on your own, you can seek assistance from a specialist at any municipal institution. To obtain the number, temporary or permanent registration in the territory of the Republic of Poland is required.
Options for Relocating a Business from Ukraine to Poland
One of the ways to relocate a business from Ukraine is to register a new company in Poland. For this, you will need to register a new company and translate all necessary documents, including accounting records and contracts, into Polish. Additionally, you will need to find an office, hire staff, and provide the necessary infrastructure. This option may be the most complex and expensive but will allow you to have full control over the business and manage it in accordance with Polish laws and requirements.
Another option is to purchase an existing business in Poland. This method can be simpler and quicker, as you won’t have to create a new company or look for an office and staff. However, when purchasing an existing business, it’s crucial to carefully review all financial and legal documents to avoid unpleasant surprises.
The third option is to open a branch in Poland. This allows you to maintain the legal independence of the Ukrainian company while still entering the Polish market. To open a branch, you will need to register it in Poland and complete all necessary legal and financial procedures.
Ukrainians who entered the Republic of Poland after February 24 have the right to open a sole proprietorship (SP). This right is also available to all other Ukrainians who have the right to legally reside in Poland, even if they have been living here for 9 years.
Opening a Branch of a Ukrainian Company in Poland
How to open a branch of a Ukrainian company in Poland? A branch, such as a subsidiary, must be organizationally independent, and the entrepreneur opening it must conduct activities outside their main location or primary place of business.
Opening a branch of a foreign company in Poland is allowed, but there are clear rules that must be followed when choosing this form of operation. It is important to remember that the parent company is responsible for the obligations of the branch, there are restrictions on the type of activities that the branch can perform, and there is an increased burden related to financial and other reporting.
To register a branch of a foreign company in Poland, the following steps must be taken:
- Choose a name for the branch that complies with legal requirements: it must include the name of the parent company in Polish, the organizational-legal form, and the phrase “oddział w Polsce” (branch in Poland).
- Gather the necessary documents, including a decision from the parent company to establish the branch and choose its location, a decision to appoint a representative of the company at the branch, a notarized copy of the parent company’s articles of association, and an excerpt from the relevant register. Additionally, all documents must be translated into Polish by a sworn translator.
- Register the branch on the court register portal using an e-PUAP trusted profile or a qualified digital signature. A court fee of 500 PLN is required for registration in the National Court Register, and 100 PLN for announcing the registration in the Court and Economic Monitor.
- After successful registration, the branch can begin its activities.
Creating a New Company in Poland
It is important to note that Ukrainian citizens with a PESEL number and legal residence have been able to access all legal forms of business creation since 2022. However, the most popular forms remain limited liability companies (LLC) and sole proprietorships (SP).
Opening a Limited Liability Company (LLC)
A Limited Liability Company (Spółka z o.o.) has the following key features related to its creation and registration:
- The company is a legal entity.
- It cannot be created by another LLC that consists of a single person (Spółka jednoosobowa).
- Founders can be both individuals and legal entities, regardless of their nationality.
- The minimum share capital is 5,000 PLN.
- A company agreement is mandatory.
- A management board must always be appointed, and in special cases, a supervisory board.
- An LLC is liable for its obligations only with the company’s assets, not the founders’ personal assets.
Opening a Sole Proprietorship (SP)
Opening a Sole Proprietorship (Fizyczna Osoba Przedsiębiorca, or FOP) in Poland for Ukrainians is possible but requires completing a number of procedures and documentation. The following steps are necessary:
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Register a Tax Identification Number (NIP): This can be done through the Polish embassy in Ukraine, via the designated form, or through a representative in Poland.
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Bank Account: Opening a bank account is not mandatory immediately after registration. However, once the turnover reaches 15,000 PLN, it becomes a requirement. The Ukrainian entrepreneur will need to provide a passport, registration document in Poland, tax identification number, and documents proving the right to conduct business.
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Register with the Tax Office: After receiving the tax identification number and opening a bank account, the Ukrainian entrepreneur must register their business with the Polish tax authority and the commercial register.
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Business Permits: Documents proving the right to engage in business activities in Poland and obtaining necessary work and residence permits are required.
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Accounting and Reporting: A Sole Proprietor in Poland is also obligated to keep accounting records, submit tax returns, and meet other reporting requirements according to Polish law. Outsourcing this function to a professional accountant is often the best solution. You can read more about tax systems for sole proprietors in Poland in our article.
What difficulties do Ukrainians face in Poland?
Currently, there are two systemic problems that entrepreneurs wishing to relocate their Ukrainian business to Poland may encounter. Both problems have a common nature.
Money transfers. The government has currently prohibited the transfer of any currency out of Ukraine. Payments are only possible for critically important imports, which apply to goods from a special list.
Supplies. Supplying products manufactured in Ukraine is currently extremely difficult, if not impossible.
Solving the money transfer issue is challenging. Transfers in hryvnias are theoretically possible, but exchanging Ukrainian currency is limited by size and conditions. The solution to the problem could be new supply chains and finding new partners willing to make payments, for example, in euros.
Among other challenges common to all foreigners opening businesses in a new country, the following can be highlighted:
- Language barrier, which complicates communication with clients, partners, government authorities, etc.
- Lack of knowledge of local legislation.
- Not understanding the mentality of another nation.
- Prejudice from potential clients, etc.
What assistance can be expected?
Foreigners wishing to open a business in Poland can rely on various types of help and support provided by both government and non-government organizations.
In particular, Poland has many consulting companies and service centers that assist with business registration and provide advice on taxation, legal issues, financial planning, and other business aspects. There is also the possibility of receiving financial support and grants for business development from the government and European funds.
Foreign entrepreneurs also have access to translation and interpretation services to overcome the language barrier when completing documents and communicating with government authorities.
Moreover, there are many organizations in Poland that bring together entrepreneurs and offer opportunities for experience and knowledge exchange, as well as participation in seminars, workshops, and business events.
Our recommendations
Before starting your own business in Poland, be sure to familiarize yourself with all the legal acts related to your type of activity, the offerings, and the activities of potential competitors. If possible, conduct market testing.
Our company specializes in improving the business climate and supporting entrepreneurs, including Ukrainian businessmen wishing to relocate their business to Poland. Among the services our company provides are document assistance, obtaining a PESEL number, business consultations, help with business launch, establishing contacts with state and local authorities, as well as providing partners with contacts of reliable contractors.
We would be happy to share our expertise with you.
