Hi, my name is Stas, and I’ve been living in Poland for 9 years and running a business here. Today, we’re going to talk in detail about whether it’s worth considering opening a sole proprietorship (self-employment) in Poland, especially if you already have the “po wskazaniu” status. Many of you may already have this status in Poland, and until the start of the war in Ukraine, very few had the real opportunity to open a sole proprietorship. I didn’t have this option either, but it became available, and now many are wondering whether this decision is right for them, especially with the recent implementation of the Polish Deal and the uncertainty around the laws.
Advantages of Opening a Sole Proprietorship in Poland
In this video, I’ll answer the important question: is it worth opening a sole proprietorship if you have the “po wskazaniu” status? What additional opportunities does a sole proprietorship in Poland offer, and what will it give you? Before we begin, if you’re planning to enter the Polish market and open a company or sole proprietorship, tax optimization and consulting can help you. All necessary links will be in the video description, and we’d be happy to work with you.
Tax Savings and Earnings
Let’s dive into the key points. Everything I’ll discuss is related to either saving money, which will ultimately allow you to earn more, or reducing your tax liabilities, which will also save you money and leave you with more.
First Point: Tax Payments
The first and most important point is that by opening a sole proprietorship, you can pay less tax in Poland. When you register a sole proprietorship, you can take advantage of a turnover-based taxation system. This taxation method is becoming more and more popular in Poland. The idea is that you will be able to continue working as a VAT payer, and the sole proprietorship will pay taxes based on turnover. This gives you the opportunity to withdraw funds through your sole proprietorship, which significantly reduces your tax obligations.
Second Point: Turnover Limit
The second key point is the ability to use the 200,000 PLN annual turnover limit within the sole proprietorship framework. It’s important to note that in Poland, this limit prevents you from becoming a VAT payer if you don’t exceed it. This means you can earn up to 200,000 PLN per year without paying VAT, which creates a potential benefit, especially for small businesses and sole proprietors. This allows you to sell goods, for example, 23% cheaper than your competitors, which is a significant competitive advantage.
Third Point: Fixed Income
The third important aspect is if you plan to fix your income up to 120,000 PLN, you should consider opening a sole proprietorship. This will help you reduce accounting costs and tax payments. The main form of taxation for sole proprietorships in Poland is a fixed amount of 10,000 PLN per month of net profit. If your business has income where expenses can be written off, the sole proprietorship model is worth considering.
Fourth Point: Simplified Reporting
The fourth point is that managing accounting becomes much easier. This significantly simplifies your administrative tasks.
Fifth Point: Getting Rid of Nominal Partners
The fifth important aspect is the ability to get rid of a second nominal partner in your company. A nominal partner is someone who is formally considered a member of the company but does not actually play an active role in the business. This often involves relatives or acquaintances, and if they don’t add any value, their involvement can become an additional headache for you.
Ease of Opening and Closing Sole Proprietorship
It’s important to note that opening, closing, or freezing a sole proprietorship in Poland is much easier than doing so with a more complex structure like a spółka z o.o. (limited liability company), which requires much more time and effort for any changes. The main message here is that with a sole proprietorship in Poland, you avoid double taxation, meaning that the money you earn can be immediately withdrawn as personal income.
Who Can Open a Sole Proprietorship in Poland?
So, who can open a sole proprietorship in Poland right now? It includes everyone who previously had the ability to open a sole proprietorship, such as holders of residence cards, Poles, students, and citizens. But this category has now expanded to include those who moved to Poland after February 24 from Ukraine. Ukrainians who arrived in Poland can take advantage of the opportunity to open a sole proprietorship, which is great news for many, including myself, as I also fall into this category.
Conclusion and Call to Action
That’s it for today. If you have any questions, like this video and consider whether adding a sole proprietorship to your business is worthwhile. In most cases, it’s beneficial. We provide consultations, and if you need help registering a sole proprietorship, don’t hesitate to reach out. We’d be happy to help you with everything. Don’t forget to subscribe to our channel, and see you soon!
