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Setting up small business in Poland?



cms 9 | 1,167    
8 Aug 2013  #151

You are looking at the section for non polish entities. But you will be a polish business and presumably want to deduct the vat on your rent and overheads.

Get a tax accountant to advise you of the specifics of your case.


poland_    
8 Aug 2013  #152

But you will be a polish business and presumably want to deduct the vat on your rent and overheads.

Bingo...

I presume that means I am not even required to register for VAT.

The road to hell is paved with good intentions.
Paladine 3 | 29    
8 Aug 2013  #153

I don't have a physical office so no VAT on rent, all my overheads are outside Poland (so reverse charge) and at least initially all my clients (B2B and B2C) are outside of Poland too so B2B would be reverse charge and B2C would be Polish 23% rate. I don't see what is so complex about that to require a tax accountant.
poland_    
8 Aug 2013  #154

Except for the simple fact, you are the beneficiary of the business and will control and operate the business from Poland...
delphiandomine 87 | 15,729    
9 Aug 2013  #155

I don't see how

If you don't have the knowledge of how Polish company taxation works, then I'd steer clear of making assumptions.

it is simply a case of filing vat each month - which is neither complicated to calculate nor (from what I have seen) complicated to file.

Trying to say that Polish accounting law is "simple" is your first mistake. Don't forget - without an accountant willing to take responsibility, they'll go after you. Do you think you could handle an in-depth investigation by the Polish Urzad Skarbowy, particularly if you did the accounts yourself without much knowledge of Polish tax law?

I know one lawyer for the Urzad Skarbowy, and in her words, anyone attempting to do the paperwork themselves for a limited liability company without using accountancy services is setting themselves up for an investigation. It attracts attention in the wrong way - think from their perspective. A foreigner trying to do accounts himself without knowledge of Polish accountancy law is bound to make mistakes, not least because the law is different to their home country.

Given the international nature of my work, I suspect most of the time they will actually be paying me rather than the other way round.

There is absolutely no way that they are going to be paying you money on a regular basis without an investigation being launched.

Most of my invoices will be non VATable as most of my revenues will be generated outside of the EU and very little if any is expected from directly within Poland.

This will also arouse suspicion. Remember, Poland hasn't really been used for such businesses - the tax law isn't business friendly.

I don't see what is so complex about that to require a tax accountant.

Listen to what people are telling you. Trying to assume that it's "simple" in a country like Poland is utter madness. Remember, many of these tax laws were more or less written from scratch 20 years ago - there isn't years of tradition and experience to fall back on, nor is there a culture of the taxman working with the taxpayer to get it right.

all my overheads are outside Poland

All? That would arouse considerable suspicion if the director's address was in Poland...

I'm no accounting genius (and I steered well clear of doing my own accounts for a sole trader despite knowing more or less how to put basic accounts together) - but given the amount of questions you've asked on here, don't you think a good accountant would be mandatory for someone with such little knowledge of Poland?

(PS : a free hint - most English resources about Polish tax law are nonsense)
Paladine 3 | 29    
9 Aug 2013  #156

I have no problem with being investigated but I am confident the tax situation is not as difficult as you state. As for English info on Polish tax law - I have read KPMG's guide, they are one of the most respected corporate accounting/tax/auditing firms in the world - I don't believe their information would be "nonsense".

As for "Remember, many of these tax laws were more or less written from scratch 20 years ago" that is quite incorrect. As Poland is a member of the EU these laws are based explicitly on VAT Directive 2006/112/EC which came into effect on November 28th 2006 (less that 7 years ago) with many of the changes such as "Reverse Charge" (adopted in 2008) happening after that date.

So actually Polish VAT law is very new and not based on 20 year old systems at all but based on EU Directives and Regulations - and remember Regulations do not allow for different interpretations in different member states, they are explicit single interpretation texts which all EU Member States MUST introduce to their national laws by the specified deadline (which in the case of VAT laws passed some years ago).

I am beginning to wonder if there are certain people on this board with a vested interest in telling foreigners they have to do things they don't or trying to instill them with moral panic by making things seem more complex than they are because they work in the specific sectors they are promoting (such as tax accountants).
Grainneuaile    
9 Aug 2013  #157

Also would like information on costs for the following (again for Lodz):

1. Modern office space: preferably with 7 rooms following dimensions (or close):
Reception (3m x 4m)
Main Office (8m x 10m)
Manager Office (3m x 4m)
Server Room (2m x 3m)
Conference Room (6m x 4m)
Bathroom (WC)
Kitchen (3m x 2m)

or

Single open space which can be partitioned into "rooms" above (150 square meters approx)

Air Conditioning Preferable or permission to install (essential)
Parking for up to 10 cars also desirable but not essential

2. Power and other utility costs for above office space

3. Internet costs (high speed with minimum 100Mbit download & 30Mbit upload (symmetrical line preferable))

The office must be in a desirable location and a modern facility with clean facade and structural integrity.

Paladine, with respect, this is stuff that you could easily research yourself within a few hours.

You should at least consider the advice on this forum. There are a lot of very experienced members who give sound advice and you would do well to listen to them. Otherwise you could come unstuck in a veyr big way. I ran a small business in Poland, made an error with my VAT returns and ended up being fined. They were actually quite reasonable in the tax office and accepted that it was a genuine mistake, but I still had to pay the piper.
Monitor 14 | 1,831    
9 Aug 2013  #158

I would also like to know what the average full time salary is for the following roles in Lodz (preferably with links to resources supporting replies):

Accountant
Business Lawyer
Web Developer (PHP, MySQL, XHTML, HTML 5, CSS2 & 3, Javascript, AJAX experience essential)
System Administrator (GNU/Linux, MySQL, Apache/Nginx (including clustering), Postfix, Dovecot, CLI scripting languages (including bash, sed, perl) experience essential)
Programmer (development of applications for Windows, GNU/Linux, iOS, Windows Phone, Android and strong knowledge of cryptography essential)
Social Media Specialist (track record in promoting brands on social media including Google+, Facebook, Twitter, Tumblr, LinkedIn, Reddit essential)

All roles include a requirement to being able to competently speak and write English.

hays.pl/prd_consump/groups/hays_common/documents/digitalasset/hays_465124.pdf

Look at tables, for example site 6. Most important words:
Stanowisko - position
Woj. Mazowieckie - Mazowieckie Voivodhip, for the full list of polish voivodships look here:
pl.wikipedia.org/wiki/Plik:Wojewodztwa.svg
Najczęściej oferowane - The most common salary

And name of positions you can translate with dictionary in hand. Nearly half of positions is named in English anyway.
Value in table is gross salary in PLN. Unfortunately they don't have data for woj. £ódzkie, but it should be little less than for woj. Małopolskie and woj. Dolnośląskie.

3. Internet costs (high speed with minimum 100Mbit download & 30Mbit upload (symmetrical line preferable))

mnc.pl/cennik/internet-lodz
135pln/month for 50 Mb/15 Mb (they don't cover whole city)

goldnet-int.com/strony/103/internet-dla-biznesu
they ask to call them

iwacom.net.pl/internet-lodz.php
8/Mbit/8Mbit - 500pln netto

moya.toya.net.pl/site_oferta_internet.php?s=b633cbdd2b23466d792d74da5b516d2f
60/3Mbit - 80pln

upc.pl/internet
250/20Mbit - 200pln

So it varies a lot and a lot depends on the building where you want to use it. Some places have access to more, some to less options. In worst case you will have only 8Mbit or 20Mbit ADSL

Also where can I get a PO BOX in Lodz?

Ask in some Poczta Polska office, they offer it.

Regarding setting company questions you could at least afford to consult with some professional.
delphiandomine 87 | 15,729    
9 Aug 2013  #159

I have no problem with being investigated but I am confident the tax situation is not as difficult as you state. As for English info on Polish tax law - I have read KPMG's guide, they are one of the most respected corporate accounting/tax/auditing firms in the world - I don't believe their information would be "nonsense".

Yes, KPMG make it sound so simple - but they would, wouldn't they?

You are "confident", yet you don't have any experience with Polish taxation and crucially, no experience with the Urzad Skarbowy. Those of us that have been here for a while know exactly what the US is capable of, particularly when it comes to non-standard business structures. I can't put it any clearer than this - the Polish Urzad Skarbowy is not known for showing mercy, particularly as they are obliged to collect every single last grosz in tax owed. Limited liability company taxation in Poland is not a simple task - which is why the accountancy fees reflect this. The fact that you're trying to do something more complicated than just issuing VAT invoices to Polish customers will also increase the fees - particularly as it's highly likely that the US will want to investigate.

As for "Remember, many of these tax laws were more or less written from scratch 20 years ago" that is quite incorrect. As Poland is a member of the EU these laws are based explicitly on VAT Directive 2006/112/EC which came into effect on November 28th 2006 (less that 7 years ago) with many of the changes such as "Reverse Charge" (adopted in 2008) happening after that date.

You misunderstand. The whole tax system was more or less completely rewritten in the early 90's - so the system hasn't had time to mature.

So actually Polish VAT law is very new and not based on 20 year old systems at all but based on EU Directives and Regulations - and remember Regulations do not allow for different interpretations in different member states, they are explicit single interpretation texts which all EU Member States MUST introduce to their national laws by the specified deadline (which in the case of VAT laws passed some years ago).

Why are you making the mistake of assuming that VAT law is the be all and end all? You've got to consider how the law on deductions work (do you know how to handle ZUS?), how the law is changing (has changed?) on VAT payments to the Urzad Skarbowy, the law on the usage of the "kasa fiskalna" - etc etc. As for the EU - do you honestly think that the Polish tax office will play fairly, especially if they don't understand what you're doing?

You need to understand that Poland doesn't work like Western countries. Things are still fluid here, particularly in the area of justice. If you don't have a good accountant to fight your case, you'll find that they'll decide themselves what you owe and slap you with the bill. Are you really going to be able to handle it if they decide that you've made a mistake with the VAT regulations and that they want their payments - now?

I am beginning to wonder if there are certain people on this board with a vested interest in telling foreigners they have to do things they don't or trying to instill them with moral panic by making things seem more complex than they are because they work in the specific sectors they are promoting (such as tax accountants).

Nope, we've just seen plenty of people fall into the trap of assuming that saving a few zloty on an accountant is a wise idea. We also have years of reading endless stories about how the Urzad Skarbowy bankrupted companies because of their interpretations on tax law. I remember one case where the tax office refused to return several million zloty to someone - even though they were ordered to do so by the courts. With that kind of institution, do you really think you can manage it?

It seems to me that you're attempting to start a business on the cheap.

For what it's worth - there's a reason why very good accountants who speak English can charge a significant amount of money.
Paladine 3 | 29    
9 Aug 2013  #160

Corporation Tax is never difficult if you keep your accounts updated properly - VAT tends to be the biggest headache and as I said, from what I have read it doesn't seem so bad at all.

One thing I am still trying to clarify whether an S.P.Z.O.O still has to pay ZUS if it has no employees - my understanding is that it doesn't. The advantage of having an S.P.Z.O.O.O is you don't have to pay employee tax contributions if you have no employees because Directors are not classed as Employees unless they draw a salary. As the only Director in my company I will be paying myself dividends on my shares periodically, as opposed to drawing a salary.

And for the record, I haven't just been reading online - my future mother in law is a bank manager with Pekao and several members of the family have their own businesses - however, I prefer to do a range of research rather than just accepting advice from close friends and family (as I know all too well that often friends will tell you what you can get away with rather than what you are supposed to do).

I am still not seeing any justification for an accountant on a simple consultancy model - the VAT and Tax systems all seem very straight forward. It is not about trying to do things on the cheap, it is about not throwing money away where I don't need to - especially in the early days of the business where revenues are slower as you get established. I have no intention of throwing away savings on something I don't need. Once the business is established I may well hire an accountant just to remove the work overhead from my own schedule but certainly not before it becomes necessary.

I have also just found out from another family member that you can register a company online now meaning you don't have to pay Notary fees if you go to: ems.ms.gov.pl
delphiandomine 87 | 15,729    
9 Aug 2013  #161

Corporation Tax is never difficult if you keep your accounts updated properly - VAT tends to be the biggest headache and as I said, from what I have read it doesn't seem so bad at all.

The thing is - at least in Poland - anyone can put together the accounts. I could probably do it, and I haven't studied the stuff for years - but do you know about all the arcane rules and regulations that have no equal in our home countries? Poland is the land of obscure rules and regulations - do you want to find yourself in trouble months down the line because you forgot to pay stamp duty for something or other? Everyone in this country has stories of how they failed to do something for x reason and ended up having to run around trying to fix it later.

For instance - your first claim for the return of VAT owed to you will almost certainly trigger an inspection. How can you be certain prior to inspection that you've done everything right? Why is it that even my accountant (who has amazingly reasonable fees) won't touch sp z o.o accounts for less than 500zl+VAT a month when her fees for sole traders are significantly lower? Don't forget that a good accountant will keep you on the straight and narrow as regards documentation and all the pieces of paper required - not just calculating the taxes owed.

Perhaps this is where you're misunderstanding us - by accountant, Poles normally mean someone who takes responsibility for *all* the dealings with the tax office. The idea is that a good accountant in Poland should be able to stand your corner and make sure that whatever you're doing is fine tax-wise - it's not just someone who will hand you some accounts at the end of the year and say "right, see you next year".

One thing I am still trying to clarify whether an S.P.Z.O.O still has to pay ZUS if it has no employees - my understanding is that it doesn't. The advantage of having an S.P.Z.O.O.O is you don't have to pay employee tax contributions if you have no employees because Directors are not classed as Employees unless they draw a salary. As the only Director in my company I will be paying myself dividends on my shares periodically, as opposed to drawing a salary.

Best to receive professional advice on that one.

I am still not seeing any justification for an accountant on a simple consultancy model - the VAT and Tax systems all seem very straight forward. It is not about trying to do things on the cheap, it is about not throwing money away where I don't need to - especially in the early days of the business where revenues are slower as you get established. I have no intention of throwing away savings on something I don't need. Once the business is established I may well hire an accountant just to remove the work overhead from my own schedule but certainly not before it becomes necessary.

The thing is that there's no such thing as "simple" where sp z o.o are involved. UK companies are ridiculously easy to administrate - but Polish companies have far more bureaucracy and red tape to navigate. For instance, do you know what happens when you liquidate a sp. z o.o and the court finds issues with the accounts?

Only a small question, but who will deal with the tax office on your behalf?
inkrakow 1 | 88    
10 Aug 2013  #162

am still not seeing any justification for an accountant on a simple consultancy model - the VAT and Tax systems all seem very straight forward

I agree. I also resent paying my accountant every month, but do it simply for the peace of mind. If you decide to go it alone, do let us know how it goes.
cms 9 | 1,167    
10 Aug 2013  #163

I am an accountant but can assure you i have no interest in taking on clients at 1000 zloty a pop because i have my own businesses to run. I admire people that try and set up on their own here but scrimping on advice is a false economy and i dont then like disillusioned foreign investors coming on here railing against the system when they have trouble with the authorities.

Check polands ease of doing business rankings. They are slowly improving but in tax and company admin it remains one of the worst in the eu. From first hand experience it is much more difficult than czech slovakia and hungary.

So i will give you a last piece of free advice before quitting this thread. No employees means no zus. But you cannot pay interim dividends indefinitely - you need to show the company has adequate standing before declaring the dividend, and that is normally based on a set of interim accounts and the level of reserves and cash. You will save the zus but the dividend is not a CIT deductible item.
delphiandomine 87 | 15,729    
10 Aug 2013  #164

So i will give you a last piece of free advice before quitting this thread. No employees means no zus. But you cannot pay interim dividends indefinitely - you need to show the company has adequate standing before declaring the dividend, and that is normally based on a set of interim accounts and the level of reserves and cash. You will save the zus but the dividend is not a CIT deductible item.

And this is exactly where you need an accountant to keep you straight.
Paladine 3 | 29    
10 Aug 2013  #165

I am fully aware that dividends are not CIT deductible, it would make absolutely no sense for them to be and I don't know a single country in the world where they are. With regards to Interim Dividends, so long as the shareholders agree to the interim dividend and the company is profitable at the time of the dividend vote from the shareholder - I don't see any problem with issuing interim dividends. Again, of course Interim Accounts would need to be presented to the shareholders the same as Annual Accounts are required to be made available to shareholders before an vote on dividends at the Annual General Meeting.

I am still not seeing anything here which is complex in the situation of a single shareholder corporation with a simple consultancy business model and limited overheads.

I of course appreciate the responses but I still don't see any need for an accountant in my situation.

With regards to who will communicate with the tax office on my behalf (presumably because of the language barrier) my fiancee speaks English as do several of her relatives (one of which just graduated law school) should the need arise.

If my company was conducting more complicated business I would agree that it would be cumbersome to manage the accounts on my own, but with my business model, I really don't see any complications. Most of my work is with the European Commission or corporations and is invoiced on a daily rate with expenses - there is nothing complex about it.
Wouterroelofs - | 1    
8 Feb 2014  #166

we are also thinking to start a company... Is there anybody who lives in Poland with sufficient knowledge on businesses who is interested to partner up with us to start a small company?
Kazikowski 17 | 101    
7 May 2014  #167

If you have the cash/capital, I wouldnt bother searching for a business partner. You are more than capable of doing everything yourself business-wise.

Two great sites with loads of information which I recommend:

paiz.gov.pl/publications/how_to_do_business_in_poland
polesmakemoney.com/how-to-start-a-business-in-poland/

Loads of info. Good Luck with your ideas and ventures!
gquintela - | 2    
15 May 2014  #168

Hi everyone,

Been hired for a job here in Poland (KRK) by UK company (started Jan-2014).

I am still looking how to pay taxes, and set up my own company to declare those 19%.
Already went to declare myself at city office and i am waiting for my PESEL, i think only after that i can register in the tax office (but all of these offices have non-engish speaking employees.. so i really dont know how will it go)

I thought on getting an accountant but here in KRK im being asked for 220zl/month!!

Does anyone have any contacts for an accountant in KRK area for less than that?? Or someone who'd help me declare my taxes? :)

Thanks!
cms 9 | 1,167    
15 May 2014  #169

I am not sure how much you expect to pay but you are obviously not going to get any one good for less than that. Watch you dont make a false economy.
Indonesia - | 5    
5 Jun 2014  #170

Merged:Setting up a business in Poland, what's the procedure?

Hi ,
I live in Bialystok and do not know Polish , I have got difficulties to find a job here. Therefore, I am thinking becoming self-employed.
I would like to ask someone who knows, how is the business procedure in Poland if I want sell Indonesia's sweets or foods.

In my country, I can start making something ( sweets, food ) from my own kitchen and sell them directly to friends and strangers.
or I also can sell them at the event or festival .

I heard from my friend here , i have to register everything and have different place to make the food, not at own apartment
Highly appreciate , if you know how i can start this .

Thank you so much
smurf 39 | 1,997    
5 Jun 2014  #171

from my own kitchen and sell them directly to friends and strangers.

You can do that, but it's not legal.

i have to register everything and have different place to make the food

Yea and when you set up a place with all the proper equipment you'll be subjected to various health and safety inspections which you must pass before you can start production.

It won't be cheap to set up but you might still be able to avail of the EU grants for establishing a business.

But you'll need to speak to someone who knows more about it than me...maybe you have a lawyer you can advise...or just a Polish-speaking friend who can go with you to the relevant government offices to find more info.
Roger5 2 | 1,505    
5 Jun 2014  #172

If you start selling Indonesian food in Białystok, I'll be your first and best customer. However, as you may know, the restaurant business there is very hard. Just look at the number of cafes on Lipowa that have come and gone in the last few years, including an excellent Turkish place and a fast noodle joint. I wish you the very best of luck but you need an experienced Polish business partner with a sound head.
Monitor 14 | 1,831    
5 Jun 2014  #173

As a foreigner you cannot open any form of company available for citizens, but only expensive forms with min 50 000 PLN deposit.
migrant.info.pl/conducting-business-activity-in-poland-by-foreigners.html

You would have to use services of some lawyer for few months to do all paperwork for you, as you don't know regulations and language.
Indonesia - | 5    
12 Jun 2014  #174

Thank you Smurf .

Thank you Roger5 . I will try to do some surveys then .

Thank you Monitor .
Vlad1234 8 | 201    
14 Jun 2014  #175

Merged: Opening small business in Poland

How good is now Poland as a place to open a small business?
Which cities are best for a such thing?
What type of business are now best going in Poland? What about automotive repair service?
How much does it cost to rent or to buy a not too big automotive repair garage?
What are taxes and regulations now?
If Poles will know that an owner of a garage is not Pole but Ukrainian, will they less likely to become a clients?
What size of profits could be expected in modest case?
darkentity - | 2    
4 Jan 2015  #176

Merged: Need some advice on setting up a small business with a Polish citizen (Im non-EU)

Hello everyone!

I would like some advice on my future plans please. I am a non-EU citizen and have a good friend and colleague (we both work remotely for the same company, a US based company). We are both designers and would like to start a small design firm together in Warsaw. Can you advice me on the best way to go about it? Should I register a company in Poland and then apply for a temporary residence based on that, or can he register a business himself and then add me as one of the partners or invite me as an employee? I'm not sure which route is the best,

Appreciate any insight into this,

Cheers

Fernando
LLCPoland Izabe    
9 Jan 2015  #177

The most common way to start business in Poland is establishment of limited liability company in Poland. Due to the fact the incorporation process is not easy, anyone who is interested in obtaining professional help can check this website: llcpoland.pl

Best regards
qamdin 1 | 3    
18 Jan 2015  #178

Well , Setting up a business could be a little task but its not impossible , I m really suprised by all others who do tell others that its so hard and blah blah and don't eve think about Setting up a business and things of all that sort! .

Let me tell you if its really all that you want ? you can do it !

Move to website migrant.info.pl and you will find every piece of information regarding registration of business in Poland.
Adi - | 13    
18 Jan 2015  #179

I can give an advices, informations and help set up a company/an own business in Poland.
Iamcloud 1 | 4    
3 Feb 2015  #180

Hello everyone,

I am planning to start a small take-out/kiosk in Warsaw. I will be visiting there in a few weeks to conduct further research.

I am curious, how difficult is it to find a small location(6x4m2) to practice such a business? Furthermore, can I just find a random

space that is meant for retail and open my takeout there or does the destination need to be specified for the type of business I

want to run? For instant retail is only for retail etc.

Any help answering this or pointing me to where I might find this information would make me extremely grateful.




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