How to establish a limited liability company (LLC) in Poland: A step-by-step guide

Who can set up an LLC in Poland?

Any legal entity – whether an individual, a legal entity, or a non-legal entity (e.g., partnerships such as general partnerships, limited partnerships, or joint-stock partnerships) – can establish an LLC.

An LLC can be set up individually (as a single-member LLC) or with partners. However, a single-member LLC cannot be established by another single-member LLC, as stipulated in the Polish Commercial Companies Code.

What is an LLC exactly?

An LLC is a legal form in which shareholders are only liable for the company’s obligations up to the amount of their contributions. This makes it a popular choice for high-risk industries, such as healthcare, transportation, or construction.

Key details about the LLC, including its name, registered office, business activities, and share capital, are included in the articles of association. This foundational document defines the company’s operational rules.

Why consider establishing an LLC in Poland?

Setting up an LLC offers numerous benefits:

• Limited liability: Protects shareholders’ personal assets, serving as a solid shield in a dynamic business world.
• Tax advantages: Eligible for a reduced 9% CIT rate for small taxpayers or the Estonian CIT model, which is attractive to many entrepreneurs.
• Management flexibility: Can be operated as a single-member LLC.
• Legal clarity: Clear operating rules specified in the articles of association.
• Growth potential: A structure conducive to investment and business expansion.

Establishing an LLC strikes an ideal balance between legal protection and financial efficiency.

How to set up an LLC in Poland: Key Steps

Creating an LLC involves a few crucial steps:

1. Drafting the articles of association – This is the foundation for further actions.
2. Gathering the share capital.
3. Appointing the management board.
4. Registering the company with the National Court Register (KRS).

Since July 1, 2021, the LLC registration process has been digitized, significantly accelerating the procedure. You can register via the S24 system, which is quick and cost-effective but limits the ability to modify the articles. Alternatively, traditional registration through a notary allows for more flexibility but is more time-consuming and expensive.

Registration with the National Court Register (KRS): What you need to know

LLCs must be registered with the KRS, and since July 1, 2021, this process is entirely online. Applications are submitted via the S24 system or the Court Register Portal, depending on the form of the articles of association. The KRS is a public register where all LLCs must be recorded to legally operate.

How the S24 system works

The S24 system enables online registration using ready-made templates, simplifying the entire process. While it’s fast and inexpensive, it has limitations, such as reduced flexibility in modifying the articles of association. For entrepreneurs who value speed and simplicity, S24 is an ideal solution.

The role of Trusted Profile in registration

The Trusted Profile is crucial for LLC registration via the S24 system. This digital tool enables document authorization and is accessible through online banking. Without it, document authorization in the S24 system would be impossible, underscoring its importance in the registration process.

Drafting the LLC articles of association

Drafting the articles of association is a critical step in setting up an LLC. This can be done in two ways:

• Via a notarial deed, offering greater flexibility.
• Using a template agreement available in the S24 system, which is faster and more cost-effective.

The choice depends on the entrepreneur’s needs.

LLC in Poland – Key elements of the articles:

• Company name.
• Registered office.
• Scope of activities.
• Share capital.
• Share distribution.

These elements ensure the company’s stability and operational transparency.

LLC in Poland – Defining share capital

The share capital is a critical element of the articles. The minimum share capital is 5,000 PLN, with a minimum share value of 50 PLN. Contributions can be:

• Cash contributions.
• In-kind contributions (e.g., property, equipment).

The form of contributions depends on the shareholders’ strategy. The articles must specify the share capital amount, as this is a legal requirement.

Costs of setting up an LLC and tax considerations

The cost of setting up an LLC depends on the chosen registration method:

• S24 Registration: Costs 250 PLN for the KRS entry and 100 PLN for publication in the Court and Economic Monitor. This is a faster, cheaper option but with some limitations.
• Traditional Notary Registration: Involves additional fees, such as a notary fee. While more flexible, this method is also more expensive.

LLC in Poland – Civil law transaction tax (PCC)

When forming an LLC, you must pay a Civil Law Transaction Tax (PCC) of 0.5% of the share capital, payable within 14 days of signing the articles. The higher the capital, the higher the tax, so it’s wise to plan the capital amount carefully to avoid unexpected financial burdens.

Post-registration tasks

After registering the LLC, several essential steps are required for proper operation:

• Reporting beneficial owners to the Central Register of Beneficial Owners (CRBR).
• Registering the company as a VAT taxpayer.
• Filing the NIP-8 form.

Failure to complete these steps may result in penalties from tax authorities.

Reporting to the CRBR

Within 14 days of registration with the KRS, beneficial owners must be reported to the CRBR. This public registry increases transparency regarding company ownership, aiding authorities in identifying the actual controllers.

Filing the NIP-8 form

After KRS registration, submit the NIP-8 form within:

• 21 days for standard taxpayers.
• 7 days if the company is obligated to pay social security contributions.

This tax form provides additional company information and is essential for full legal operation. Missing the deadline may result in penalties.

How to establish a limited liability company (LLC) in Poland? Final thoughts and suggestions

LLCs (sp. z o.o.) are a popular business form in Poland, primarily due to their limited liability feature, protecting personal assets from corporate debts. They also offer potential tax efficiencies, such as Estonian CIT or reduced CIT rates for small taxpayers.

Before setting up an LLC, consult with an advisor to plan the registration process effectively and protect shareholders’ interests. Proper preparation ensures smooth sailing in the business world. If you need assistance, don’t hesitate to schedule a consultation!