8 kwietnia 2016
Doing business in Poland. Registration of economic activity
All entrepreneurs in Poland are subject to being entered either in the Central Registration and Information on Economic Activity (CEIDG) or the register of entrepreneurs of the National Court Register (KRS), so in order to perform certain types of economic activity in Poland it may be obligatory to undergo a registration procedure. The registration process differs depending on the form of business activity.
In order to successfully start your own business it is obligatory to comply with the correct procedure. The registration is an essential part of it and should be dealt with precisely according to the regulations to ensure that no problems or delay will take place. Both self-employment and establishing a commercial company have some similarities with regard to registration, but it is essential to take notice that despite the similarities the registration in both aforementioned cases is an entirely different process subject to separate procedures.
Natural person’s economic activity
If you are a natural person and are interested in starting a small business or becoming self-employed in Poland then the rules for establishing such economic activity are set out in the Act of 2 July 2004 on freedom of economic activity(ustawa z dnia 2 lipca 2004 r. o swobodzie działalności gospodarczej, Dz.U. 2004 Nr 173 poz. 1807 ze zm.). Among other regulations it contains provisions on procedures required for establishing, running, suspending and ceasing economic activity.
According to the aforementioned Act, economic activity consists in gainful production, construction, commercial and service activity, prospecting and identifying mineral deposits, as well as professional activity pursued in an organized and continuous manner. Whereas an entrepreneur is a natural or legal person and organizational unit which is not a legal person, but enjoys legal capacity pursuant to a separate Act, that conducts economic activity on his/her/its own account.
Entrepreneurs are legally obliged to conduct economic activities while upholding the principles of fair competition and having respect for good practices and justified interests of the consumers.
Certain types of economic activity such as selling alcohol or transporting people/goods, may require to obtain a license, permission or entry into the register of regulated activity.
In Poland some foreigners are allowed to commence economic activity based on the same principles as polish citizens, without any additional restrictions. This applies especially to foreigners who are citizens of the European Union’s countries or foreigners who obtained special kinds of permits eg. permanent resident permit. In general among these people every person is equally free to commence, pursue and cease economic activity in compliance with the requirements set out in legal provisions.
In order to start a business by commencing economic activity a natural person is required to register which is done by filling out and submitting the application to entry into the Central Registration and Information on Economic Activity (CEIDG).
The CEIDG registration can be done either via the Internet on the CEIDG website or the registration form can be submitted in person or by mail in the local authorities office(Urząd Gminy, Urząd Miasta).
The entrepreneur is entitled to start the economic activity on the day on which the application for entry in CEIDG is submitted, but it is also possible to indicate in the application form a later day of commencement of the economic activity.
In case of the application being incorrect either the electronic CEIDG system should notify about the input of incorrect data or the local authorities should call for amending or supplementing the application within 7 working days. The latter is the only possibility of notification for the applications submitted in person or by mail.
When filling out the registration form it is obligatory to provide information necessary to complete all of the form’s integral parts such as:
- the statement on the lack of prohibitions pronounced with regard to the applicant, made under pain of criminal liability for making a false statement;
- entry or change to entry in the national official register of national economy entities (REGON);
- identification or update referred to in legal provisions on registration and identification of taxpayers and withholding agents- which is essential for obtaining the tax identification number(NIP);
- notification or change of contribution withholding agent within the meaning of legal provisions on the social insurance system, or acceptance of statement on continuing social insurance for farmers within the meaning of legal provisions on social insurance for farmers;
- acceptance of the entrepreneur’s statement on the choice of the form of personal income taxation, or application for taxation in the form of advance payment.
Apart from the aforementioned registration form the entrepreneur should in general also submit an application for relevant insurance in the Social Insurance Institution (ZUS) within 7 days from starting the economic activity.
If the economic activity requires entrepreneur to become a VAT payer, then in order to be registered as an active VAT taxpayer the entrepreneur is also obliged to submit the VAT-R at the latest on the day preceding the day of starting the sale of VAT taxable goods or provision of VAT taxable services. The form for registration of the entrepreneur for VAT purposes should be submitted to an appropriate tax office.
Commercial company formation in Poland
The procedure of setting up your business in Poland by registering a brand new company may differ depending on the legal form of the company. In general it will be required to sign a company agreement in the form of a notary deed, open a bank account for the created legal entity, register the company in National Court Register(KRS) while filling out the paperwork related to REGON, NIP, and social insurance. It is also important to remember about registration for VAT purposes if the VAT will be applicable to the economic activity commenced by the newly created company.
The foreigners who want to start a business in Poland, but who are not subject to the same principles as the polish citizens regarding the commencement of economic activity may start and conduct economic activity exclusively in the form of:
- limited partnership;
- limited joint stock partnership;
- limited liability company;
- joint stock company.
The National Court Register is a centralized, computerized database comprising of three distinct registers:
- The register of entrepreneurs;
- The register of associations, other social and professional organizations, foundations and public healthcare institutions;
- The register of insolvent debtors.
For each entity a separate register file is being kept in the KRS by the registration court and any interested party can view the register file without limitations unless the law states otherwise.
As it was already stated before starting the registration procedure it is mandatory to open a company’s bank account. The company registration by itself can be performed by a legal representative so a travel to Poland by the company founder may not be required. In such case a power of attorney should be delivered to the appointed representative so that he can file at KRS for a company registration.
The company in Poland is registered in the registration court with jurisdiction over the legal seat of the entity that is being established. Filing the motion for registration of the company in KRS can be done via mail, in person or electronically via the Internet. The registration via the Internet is subjected to some restriction and may not be suitable in many cases eg. not all of the forms of companies can be created in electronic registration, and the contribution to the company’s capital is limited to cash contributions.
The newly established companies should be assigned the tax identification number (NIP) and statistical number (REGON) automatically by the registration court. For that purpose submitting additional forms is not mandatory but the applicant while filling out the appropriate registration form should indicate that he has not applied for NIP and/or REGON yet.
After registration of the company, the registry court will send the registration data to appropriate authorities, but it should be noted that additional required information should be submitted to the tax authorities after the registration- namely the NIP-8 form, containing contains supplementary information to those disclosed during the KRS registration, shall be submitted to tax authorities within 21 days after the registration of the company in the National Court Register.
8 kwietnia 2016