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Setting up a sole trader business and becoming a resident in Poland - Procedure?


warsawmole 6 | 42
15 Oct 2010 #1
Hi Everyone

Over the past 12 months, I have spent a lot of time in Warsaw with my Polish GF and have decided that it's probably time to take the plunge and actually become a resident here.

I am a self-employed doing web design & SEO & I own and operate lovewarsaw.co.uk - a Warsaw & Poland tourist information portal.

I am British with a British passport.

I have looked through many threads on this forum and elsewhere and think that I have the procedure correct. Could you wise owls please look through this and let me know if I have it right or not? Your assistance would be appreciated :)

Becoming a Resident:

1. I go to the Urząd Skarbowy in Warsaw with a Polish speaking friend and request a zameldowanie (temporary resident's card); which lasts for 3 months.

2. After 3 months, I go back to the Urząd Skarbowy and request a karta pobytu; which lasts for 5 years. At the same time that I request the karta pobytu, I also request a PESEL (National ID number which is mandatory for permanent residents & temporary residents living in Poland for more than 2 months).

3. The PESEL arrives a couple of weeks later and I take it back to the Urząd Skarbowy and they then stamp my karta pobytu to show that I now have a PESEL.

4. There is an alternative to the karta pobytu called the ZASWIADCZENIE O ZAREJESTROWANIU POBYTU OBYWATELA UNII EUROPEJSKIEJ which is a piece of paper confirming my rights to stay in Poland as a EU citizen!

HELP! Is this a better alternative to a karta pobytu? Which one should I ask for?

5. Once I have had my karta pobytu for 5 years, I can get permanent residency (karta stalego pobytu) but must have a full & checkable work history.

6. To get my karta pobytu, I will need to show:

a) that I have work and income
b) that I have an address here in Poland
c) that I have medical insurance of some kind

Is this correct? Is there anything else that I will need to show?

In relation to showing that I have work and income, will I have to set up the business here in Poland first e.g. I want to set up as a sole trader? or will they accept bank statements showing a regular income? Seriously, its like the chicken & egg scenario! What do I do first, become a resident or set up the business?

In relation to the address, can I use my GF's address? Do I need a letter from the GF or the landlord?

Setting up the Business:

It seems that my best option is to set up as a sole trader as this involves less documents, less hassle, less costs and this allows me to draw invoices here in Poland.

I understand that when I set up the business, I have to choose various codes that explain what my business is and that I should tick everything that I will do and might do as changing this later incurs further costs. What are those codes called?

To set up the business, I will need to go to the town council, tax office & statistic office?

I will also have to sort out ZUS which for the first 2 years is around 300 zloty per month and then it increases to 800? IS that right?

I can use my private address as my business address? Is that right?

Somewhere during this process, I will be provided with a NIP (tax ID number)?

I know there are a lot of questions here and any help that you guys can provide would be great.

Many thanks

David

Any help appreciated :)
tipo3s - | 3
20 Oct 2010 #2
Merged:Sole-Trader Business Address in Poland

Hi,

If I register as a sole-trader in Poland, do I need to have an office address, or can I use my home address as my business address as well? If so, can any address be used or does the land need to be zoned for multi-use or commercial?

In my business I visit clients at their workplace, so would rarely have anyone visit me at my business address.

Thanks!
delphiandomine 83 | 17,730
20 Oct 2010 #3
Doesn't matter - for instance, my home address is my business address, but no-one comes here to do any business except to pick up the occasional translation. The address is really only where they can find the official documents for the business - and it can be anywhere.
tipo3s - | 3
20 Oct 2010 #4
Thanks delphiandomine!

I guess that does make sense. I was just under the impression that maybe a "home-based" business required specific consent to use a residential address for business.
pozaluista - | 4
6 Jul 2011 #5
Can some body guide me for setting up a small sole trader business in poland?
I am from Asian. Youcan write me at: apnaquestion@gawab.com

Tks
Ahmed
EdWilczynski 3 | 98
6 Jul 2011 #6
Any help appreciated :)

Don't want to be be rude mate, but you have Javascript errors, CSS errors and HTML errors.

One thing I do know is that the standard of developer tends to be very good in Poland and you will struggle to compete if you can't get the basics right.
alexw68
6 Jul 2011 #7
For professional-standard projects, you're unquestionably right. @warsawmole, don't put anything out without running it past the W3C HTML/CSS validators first. These should be part of your standard toolkit.

However, there is still a market for less-polished stuff, particularly for small businesses who frankly wouldn't know valid HTML if it bit them on the arse. You are limiting yourself to once-only buyers if you aim for this market though. Personally I wouldn't.

Addendum: just went to the site with my debuggers turned off - ie, like most people - and it does what it says on the tin. Nice one.
unique_username
15 Feb 2012 #8
As a non-EU citizen who operated a business in Poland for 3 years and who got tired of all the bureaucracy, BS, scamming of suppliers and who closed it only to never return to Pl, I urge you to think hard about setting up shop and living in PL.

Dealing with the immigration office every year to complete my application for the KP, supplying them with all the documents just to be told to supply more and more each year was ridiculous. They seem to make it up as it goes along.

It was the hardest test of my life.

You couldn't pay me to go back there and do it all again.
delphiandomine 83 | 17,730
15 Feb 2012 #9
ridiculous

You should consider yourself lucky that you were even allowed to set up a business in the first place for obtaining a residence permit - many European countries don't allow it.

bureaucracy, BS, scamming of suppliers

Normal in every country. Try doing business in France and you'll soon learn what "bureaucracy" really means. Even EU citizens have a hell of a hard time there.

The real issue in Poland is the lack of sense of urgency.
unique_username
15 Feb 2012 #10
You should consider yourself lucky that you were even allowed to set up a business

why should I consider myself lucky? There is/was nothing on Polish Government websites saying that my country was not permitted to set up a business. SO how does that make me "lucky"?

I didn't care about other European countries at the time.

Please, tell me which European countries do NOT allow NON EU citizens to set up and run a business. I'd like to know.
delphiandomine 83 | 17,730
15 Feb 2012 #11
SO how does that make me "lucky"?

It makes you very lucky that they haven't fallen into line with other EU countries in this respect. The bizzare agreement that allows Americans to set up as self-employed here isn't common in the EU.

Please, tell me which European countries do NOT allow NON EU citizens to set up and run a business.

Most EU countries do not allow self-employment by non-EU nationals, actually. Luxembourg for instance will not allow it unless they're happy with the person applying - which means in practice that anyone that isn't a professional or who isn't investing a serious amount of cash isn't welcome.
beliall - | 25
15 Feb 2012 #12
I have a business its located offshore in Delaware I don't work in Poland but live there only, i get all the residency stuff etc. It depends on where you want to trade in or out of the country?

However if setting up a company in Poland expect this to take around 6 weeks, to get everything like VAT and bank accounts sorted, my advice would be to seek the services of a good lawyer who will help you through the process, Just remember one thing though, DO NOT play with the Financial Government in Poland as they can take control of your business
delphiandomine 83 | 17,730
15 Feb 2012 #13
my advice would be to seek the services of a good lawyer who will help you through the process

No need for a lawyer for routine self-employment.

DO NOT play with the Financial Government in Poland as they can take control of your business

That's not generally how it works - rather they'll just deal with you through the legal system. There's no real system of bankruptcy in Poland, so they don't need to control you when they can merely take everything you have.
unique_username
15 Feb 2012 #14
many European countries don't allow it.

1 country does not equate to "many".

Can you please supply me with documentation regarding Luxembourg's stance?

Please list off more. Also...I'm not American.

Most EU countries do not allow self-employment by non-EU nationals

Really? Please state them and supporting information.

Also, I as I asked before> please state which countries in Europe that do not allow non EU citizens to set up and run a business, whether it be a corporation or sole proprietor.
Sjors 1 | 15
12 Nov 2015 #15
Merged: Register personally as an EU-citizen first or freelance-business first in Poland?

Hi all,

I've read some information on how to register yourself personally (as an EU-citizen) and how to register your (freelance-)business in Poland (as an EU-citizen). Both are more or less clear to me. However, what I don't understand is which of the two should be done first. In order to register personally in Poland, I read that I'll have to provide some certificate or other document showing that I will work as a self-employed person in Poland i.e. showing that my business is registered in Poland. However, to register my business in Poland, I will have to provide my address in Poland, i.e. the address where I personally am registered in Poland... So, it seems like a 'does the chicken or the egg come first'-situation to me. Hopefully you can me tell me how to solve this! Thanks a lot in advance.

Cheers!
Harry
13 Nov 2015 #16
However, what I don't understand is which of the two should be done first.

You must register as living here first.

I read that I'll have to provide some certificate or other document showing that I will work as a self-employed person in Poland

No, you don't.
Sjors 1 | 15
13 Nov 2015 #17
@Harry: thanks for the reply. How then do I show them I will work in Poland as self-employed?

This is what I've found here:
mazowieckie.pl/en/for-foreigners-1/european-union/registration-of-an-eu/388,What-documents-do-I-have-to-submit.html

Registration of an EU citizen
What documents do I have to submit?

- 1 copy of an application for registering the residence,
- a travel document or another document confirming your identity and citizenship.

ADDITIONAL DOCUMENTS:

2. If you are self-employed on the territory of the Republic of Poland:

a written declaration on the entry in the National Court Register or the Central Business Activity Register and Information Record System (CEIDG) or another proof confirming that the European Union citizen is self-employed on the territory of Poland;
Harry
13 Nov 2015 #18
How then do I show them I will work in Poland as self-employed?

You don't need to. You have the right to reside here whether you work or not.
Sjors 1 | 15
13 Nov 2015 #19
@Harry: I know that, but when I stay for longer than three months in Poland, I will (as an EU-citizen) have to register myself in Poland. Since I want to work as a self-employed person in Poland, it would make sense to register myself as such, but I don't see how it could work if I can't first register my business.

Are you a non-Polish EU-citizen working as a self-employed person in Poland? If so, how did you get around this issue?
Harry
13 Nov 2015 #20
Yes. I registered at the foreigners office and then registered as self-employed.
Sjors 1 | 15
13 Nov 2015 #21
@Harry: When you registered at the foreigners office, you had to declare whether you are employed, self-employed, studying, married to a Polish citizen or have a healthcare insurance and sufficient means, right (as per mazowieckie.pl/en/for-foreigners-1/european-union/registration-of-an-eu/388,What-documents-do-I-have-to-submit.html)?

I've emailed a question on this to the Mazovia Province; hopefully this will provide the answer, in which case I'll post it here, so others who might have this question have the answer too :).
James mallone - | 9
14 Nov 2015 #22
An obvious question....

But why on earth would u choose to set up shop in poland when you could do as thousands of poles do and register a uk company.???

Your an eu citizen (((( for now )))) so what's the hang up about onky registering for self employment etc the polish way ?

I know quite a few poles in lodz who run what r pratically speaking polish companies in all but name but r registered in England.

No ZUS
Way less buerocracy
At least 10000 pound tax allowance
Loads of reasonable expenses
Cheap accountants

As for for then spending the money back in poland ...a friendly kantor or there is a uk bank i use which offers free use of Mastercard in poland with no fees / commission and full wholesale bank zloty pound rates.

As for any polish customers paying you they could simply use something like transfer wise costing them one pound and you nothing.

The polish authoritys don't need to know anything about your business just make sure you pay hmrc once a year
Sjors 1 | 15
14 Nov 2015 #23
Always nice to read an advice which ends with "the authorities don't need to know anything" :). If you run your business from Poland, the business income is taxable in Poland (irrespective of whether your company is incorporated under Polish or UK law). So your scheme is illegal. Besides, if you live more than three months in Poland, you have to register in Poland, which puts you 'on the radar' of the Polish authorities. Moreover, tax authorities within the EU easily exchange information. So it is unlikely that you'll get away with this.
delphiandomine 83 | 17,730
14 Nov 2015 #24
Indeed. And the Polish tax office tends to fine you 100% of the unpaid tax. So you end up with a 200% bill, which is an estimated bill if you can't prove exactly how you did things - and then you've got ZUS on top who will also hand out penalties of up to 30,000zl without a court case.

Doing what the Poles do is fine and well if you're the gambling type, but I wouldn't risk it.
Sjors 1 | 15
14 Nov 2015 #25
I wouldn't be surprised if you would be in more trouble than just a fine. Since this whole scheme is purposely set up to mislead the tax authorities, it could also lead to criminal charges. Guus Hiddink (the football coach) was (in The Netherlands) convincted to a six-month suspended jail sentence for wrongly claiming to be a tax resident of Belgium in stead of the Netherlands. And Hiddink had actually some ground to claim he lived in Belgium (he had a house in Belgium where he lived now and then etc.), so the punishment could be even higher for those who try James' suggestion and get caught...

I've found this information on a German website (daad.pl/de/19221/index.html). Unfortunately, my German is far from perfect, but I think it means that there are 4 steps you should take, in this order:

1. Register your place of residence at the City Council;
2. Register yourself at the Province Department;
3. Request a PESEL-number at the City Council;
4. Complete your registration at the Province Department.

If this is correct, then I can see how it works. You could register your business in between step 3 and 4, assuming you don't have to provide (and document) your reason of stay at step 2. Then you have the documentation of your self-employment needed to finish your registration at the Province Department at step 4.

Not sure whether this is correct, but if someone knows, I'll happily hear so.
Lyzko 23 | 6,639
15 Nov 2015 #26
Sjors,

DAAD stands for (in English) "German Academic Exchange Service"! Unless it's a related site, this may not be precisely that for which you may be looking:-)
Sjors 1 | 15
15 Nov 2015 #27
I am aware of that ;-). The general principles for registering should be the same, I assume, whether you do so as a student or self-employed.
James mallone - | 9
16 Nov 2015 #28
Fair enough play it straight.

Just saying an awful lot of poles don't. .. poles i personally know

Perfectly perfectly legal to setup a uk company and have people pay into it from poland and pay uk corporation tax

If you want to take out some cash and pay uk dived end tax ...nothing wrong there as well

Of course If u want to make things hard for yourself. ..then nothing wrong with that either
Sjors 1 | 15
16 Nov 2015 #29
"Perfectly perfectly legal to setup a uk company and have people pay into it from poland"
Yes.

"and pay uk corporation tax"
No. You're taxed in the state where the "effective management" of your company is (whether your company is incorporated in the UK or Poland is irrelevant). Your scheme would only be accepted if you would have someone in the UK who would make all the management/strategic decisions. And even then you bear the risk that the Polish tax authority will argue that you have a "permanent establishment" in Poland where some or all of the taxable profit is attributable to. So you would have to set it up very carefully, with the help of an international tax advisor. People who try a scheme like this generally do it with a real tax paradise like Malta and often get into trouble.

Anyway, little bit offtopic.
Lyzko 23 | 6,639
16 Nov 2015 #30
The Netherlands is obviously part of the EU, therefore should be subject to the same taxation (belasting) as the rest of Europe, Poland included. I'd figure that the Dutch are welcome in the larger cities, e.g. Warsaw, Cracow, etc., as many of your companies have long since become multinationals, at least on the continent.

Learning Polish will surely be a challenge, but not an insurmountable one, I'm sure:-)


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