Due to the open military aggression in Ukraine, many domestic entrepreneurs have been forced to change the structure of their businesses and relocate them to other locations. Poland, which has been a true partner of Ukraine on the front lines over the past year, 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 regulatory acts were adopted to simplify the relocation of businesses for Ukrainian entrepreneurs.
- What is needed for business relocation?
- Confirmation of Legal Stay in Poland
- 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:
- Starting a New Company in Poland
- Opening a Sole Proprietorship
- Challenges Faced by Ukrainians in Poland
- Support Available
- Our Recommendations
What is needed for business relocation?
Despite the numerous legal decisions that facilitate the relocation of businesses from Ukraine to Poland, in practice, the relocation process can be complex, requiring careful preparation and the completion of necessary legal, tax, and business procedures.
Here are the main steps that every entrepreneur must take:
- Preparation of documents confirming the right to conduct business in Poland;
- Determination of the legal form of the company in Poland;
- Actual relocation of the business abroad, including the relocation of employees and equipment;
- Preparation of documents and tax declarations;
- Employment of staff.
So, the relocation process begins with the confirmation of the company’s owner’s right to implement it. For this, two documents are required:
- Confirmation of legal stay in the country;
- PESEL (Polish national identification number).
Confirmation of Legal Stay in Poland
The possibility of legal stay 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;
- Submission of an application for temporary or permanent residence in Poland (pobyt stały lub czasowy);
- Possession of a Pole’s Card (Karta Polaka);
- Departure from Ukraine after February 24, 2022, and legal stay in Poland due to the situation in Ukraine — in this case, PESEL 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);
- Certificate of temporary protection;
- Permanent residence permit;
- Temporary residence permit.
Due to the armed conflict in Ukraine, another route to confirm legal stay 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 armed conflict, one of the spouses has the right to open a business in Poland if they arrived in Poland due to this conflict.
What is PESEL and how to obtain it?
PESEL is a unique 11-digit number used for identity identification. It includes the birthdate, serial number, gender, and a check digit. The number is assigned to both residents and non-residents.
Submitting a special application for PESEL allows the creation of a profile for effective communication with government authorities and participation in the electronic administration of company activities.
Attention! The application for obtaining PESEL should 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 office. To obtain the number, temporary or permanent registration in the Republic of Poland is required.
Options for relocating a business from Ukraine to Poland
One way to relocate a business from Ukraine is by registering 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. You will also need to find an office, hire staff, and provide the necessary infrastructure. This option may be the most complex and costly, but it will allow you to have full control over the business and manage it according to Polish laws and regulations.
Another option is to acquire an existing business in Poland. This method can be simpler and faster, as you won’t have to create a new company or search for an office and staff. However, when purchasing an existing business, it is essential to thoroughly check all financial and legal documents to avoid unpleasant surprises.
The third option is to open a branch in Poland. This option allows you to maintain the legal independence of the Ukrainian company while also starting to operate in the Polish market. To open a branch, you will need to register it in Poland and complete all necessary legal and financial procedures.
Additionally, Ukrainians who arrived in the Republic of Poland after February 24th have the right to open a Sole Proprietorship (FOP). This right has also become available to all other Ukrainians who have the right to stay legally 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 should be organizationally independent, and the entrepreneur opening it must carry out activities outside their primary location or place of business.
Opening a foreign company branch in Poland is allowed, but there are specific rules that need to be followed when choosing this form of operation. However, it is important to remember that the parent company is responsible for the branch’s liabilities, restrictions on the type of activities the branch can undertake, and the increased workload related to financial and other reporting.
To register a branch of a foreign company in Poland, the following steps must be taken:
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Choose a Name for the Branch: The name must comply with legal requirements. It should include the name of the parent company in Polish, indicate the organizational-legal form, and contain the phrase “oddział w Polsce” (branch in Poland).
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Prepare Documents: The necessary documents include:
- A decision from the parent company to create the branch and choose its location.
- A decision to appoint a representative for the branch.
- A notarized copy of the parent company’s articles of association.
- An extract from the relevant registry. Additionally, all documents must be translated into Polish by a sworn translator.
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Register the Branch: The branch must be registered in the court registry via the e-PUAP portal, using a trusted profile or a qualified digital signature. There is a court fee of 500 PLN for registration in the National Court Register and 100 PLN for publication in the Court and Economic Monitor.
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After successful registration, the branch can begin its operations.
Starting a New Company in Poland
It is important to remind that since 2022, Ukrainian citizens with PESEL and legal residence can access all legal forms of business establishment in Poland. However, the most popular forms remain LLC (spółka) and Sole Proprietorship (SP).
Opening a Limited Liability Company (LLC)
An LLC in Poland has the following key characteristics:
- The company has its own legal entity.
- It cannot be created by another LLC consisting of one person (Spółką jednoosobową).
- Founders can be both individuals and legal entities, regardless of their nationality.
- The minimum share capital is 5,000 PLN.
- A company agreement is required.
- It is always necessary to appoint a management board, and in special cases, a supervisory board.
- The LLC is liable for its obligations only with its own assets, not those of the founders.
Opening a Sole Proprietorship
It is possible for Ukrainians to open a Sole Proprietorship (FOP) in Poland, but it requires going through a number of procedures and documentations. These include:
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Registering for a Tax Identification Number (NIP): This can be done through the Polish embassy in Ukraine, through the required form, or via a representative in Poland.
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Opening a Bank Account: It is not obligatory to open a bank account immediately after registration. A bank account must be opened once the turnover reaches 15,000 PLN. For this, the Ukrainian entrepreneur must provide their passport, registration document in Poland, tax identification number, and documents confirming the right to conduct business.
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Registering with Tax Authorities: After receiving a tax identification number and opening a bank account, the entrepreneur must register their business with the Polish tax office and register in the commercial register.
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Obtaining Necessary Permits: Documents allowing the entrepreneur to conduct business in Poland must be obtained, along with necessary work and residence permits.
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Bookkeeping and Reporting: The entrepreneur must maintain accounting records, submit tax returns, and comply with Polish legislation. It is advisable to outsource this function to a professional accountant.
Challenges Faced by Ukrainians in Poland
Currently, there are two systemic problems that entrepreneurs face when relocating their business from Ukraine to Poland. Both issues share common characteristics:
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Money Transfers: The government has prohibited the transfer of any currency outside Ukraine. Payments are only allowed for critical imports, which cover goods from a special list.
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Supply Issues: The supply of products produced in Ukraine is currently very difficult, if not impossible.
Resolving the issue with money transfers is difficult. Transfers in hryvnias are theoretically possible, but exchange restrictions apply. Solutions may include new supply chains and finding partners willing to make payments, such as in euros.
Other challenges for foreign entrepreneurs include:
- Lack of language skills, which complicates communication with clients, partners, authorities, etc.
- Unfamiliarity with local legislation.
- Misunderstanding of the mentality of another nation.
- Prejudices from potential clients, etc.
Support Available
Foreign entrepreneurs wishing to open a business in Poland can rely on various types of assistance and support from both governmental and non-governmental organizations.
For example, there are many consulting companies and service centers in Poland that help with business registration and provide consultations on taxation, legal matters, financial planning, and other aspects of business. Financial support and grants for business development are also available from the government and European funds.
Services of translators and interpreters are available to help overcome language barriers during document processing and communication with authorities.
Additionally, there are many organizations in Poland that bring entrepreneurs together, offering opportunities for knowledge exchange, experience sharing, and participation in seminars, workshops, and business events.
Our Recommendations
Before starting a business in Poland, make sure to familiarize yourself with all the regulations related to your business, potential competitors, and market testing.
Our firm specializes in improving the business climate and supporting entrepreneurs, including Ukrainian businesspeople who want to relocate their business to Poland. Among the services we offer are assistance in document processing, obtaining PESEL numbers, business consulting, launching a business, establishing contacts with state and local administrations, and providing contacts to trusted contractors.
We would be happy to share our expertise with you.
