Business

How to Pick the Best Polish Company Structure?

How to Pick the Best Polish Company Structure?

Poland’s economy has weathered the worldwide recession of 2020, the conflict in Ukraine, the energy crisis, and tighter global financial conditions with remarkable resiliency. Poland’s emergence as a prospective global force is the result of a confluence of circumstances.

Poland has made great steps in creating a welcoming business climate. The government’s economic policies and infrastructure are drawing domestic and foreign investment. Second, Poland’s qualified workforce is vital in today’s competitive global economy, and the country’s recent focus on education and skills development has helped preserve it.

Poland’s position at Europe’s crossroads has made it a magnet for international trade and investment, boosting its economy.

So, which legal form should you register your company under in Poland? If you start off on the right foot, your investment will have a better chance of succeeding.

In Poland, there are five common kinds of companies:

  1. sole trader (self-employment)
  2. partnership
  3. branch office
  4. limited liability company
  5. joint stock company

There is no universally correct response to the question of whether an individual should organize their Polish enterprise as a single trader, a branch, or a limited liability company.

There are a variety of commercial criteria, such as product origin, available capital, size of company, clientele, and amount of risk to be undertaken, that must be taken into account when selecting which of these options is the most suited.

Planning how to fit your business structure in the complicated world of international tax and legal agreements may be a costly, but crucial, endeavor if your company plans to deal in more than one country.

Most international companies who want to do business in Poland establish a branch office or register as a limited liability company. Many one-person businesses choose to operate as sole proprietors. Poland Company Incorporation Lawyer can help with this. 

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Sole Trader (Self-Employment)

If you run your own firm, you are considered a solo trader. It’s a simple setup in which you run your own firm and treat yourself and it as a single entity for legal purposes. It’s the standard for sole proprietorships and other small firms. European Union nationals are free to choose this choice without limitation.

Branch Office

The most important thing to keep in mind while running a branch is that it is not its own legal organization. The foreign parent business bears full responsibility for the Polish subsidiary’s actions and debts. The parent firm must choose an official to act as the branch’s representative in Poland. The Polish location may also recruit staff from the branch.

The records must be kept and the yearly report must be filed with the commercial court in Poland. Income tax in Poland (should the branch’s operations be profitable) is another possibility.

Limited Liability Company

The primary advantage of a limited liability business is that shareholders’ financial exposure is capped at the value of their share investments. Therefore, in the case of the company’s insolvency, the shareholders will not typically be required to pay any extra sums provided the shares are completely paid. The firm itself exists in law independently of its owners and managers. For an outside investor considering setting up shop in Poland, this bodes well. Being a separate legal entity allows the business to engage into contracts independently of the parent company and shields the latter from any debts or obligations incurred by the subsidiary.

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Forming a limited liability corporation is a simple procedure that often takes no more than three weeks.

Joint Stock Company

The firm, like a limited liability corporation, has its own identity independent of its owners and managers. Being a separate legal entity allows the business to engage into contracts independently of the parent company and shields the latter from any debts or obligations incurred by the subsidiary. Large corporations should become a joint stock company.

It typically takes between four and five weeks to form a joint stock corporation.

This article has been authored by Valeriy Matyash, a seasoned professional in the field of intellectual property and compliance

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