Doing business-in-poland
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  • 1. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Doing Business in Poland in few steps www.consuldimo.com1>
  • 2. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com ©2012 Consuldimo Consuldimo ul. Torfowa 12/4 Cracow, Poland Author Julita Mortka Lawyer - M&A Specialist Phone: +39 (0564) 405991 Mobile: +39 (334) 9818178 Email: j.mortka@consuldimo.com Twitter: Consuldimo Skype: julitamortka www: www.consuldimo.com2>
  • 3. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Why Poland is the right choice for investors? (1/2) Poland is the only European country that does not give up recession Currently, the euro zone is in crisis, a large economy remains stagnant and the changing political situation in many of them does not improve the situation. This is an excellent opportunity to change the viewing direction and pay attention to Central Europe. Poland is the only European country that does not give up recession and on the contrary, gradually growing. Geographical Position Poland is an attractive country located in the heart of Europe. The geographical position is a huge advantage of Poland. As a result, Poland has become a naturally gateway to eastern markets. Poland’s economy combines both western and eastern. As a proof,there is still growing exports and imports. A large market Poland due to its surface is attractive market, bigger than the other Central European countries all together.3>
  • 4. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Why Poland is the right choice for investors? (2/2) Stable and growing economy EU Support Despite the world news on the economic It should be noted that through the support crisis, Polish economy remains stable. This is programms for new EU members in the years due to several factors, including competitive 2007 – 2013 in Poland has been allocated 67 products, the reference value for money, billion of euro. By drawing the appropriate favorable legislation and funding from the application, enterprenuers can get funds to European Union. The International Monetary run a business. Fund predicts that Polish GDP in 2012. 2.6%, and in 2013 3.2%. It is expected that Poland is now the fastest growing country in Europe.4>
  • 5. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Main legal facilities ◆ Grants from UE 2007- 2013 ◆ Special economic zones ◆ Duty-free zones ◆ Support for hiring unemployed ◆ Exemptions from local taxes5>
  • 6. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Principle legal regulations for enterpreneurs ◆ The legal concept of doing business in Poland is best defined under Polish law in the Act on Freedom of Economic Activity (2004); ◆ When you want to set up a company you should consider requirements under Polish Commercial Code (2004); ◆ Others: Banking Act Competition Law Bankruptcy and Tax regulations Reorganisation Law Civil Code Labour Law Insurance Act6>
  • 7. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Business regulations for EU citizens and others ◆ Regulations for EU citizens According to Polish legislation, foreign citizens of EU, EEA, EFTA and foreign persons from countries not party to the Agreement on the European Economic Area, which may benefit from the freedom of establishment of the contracts by these countries with the European Community and its Member States could carry out economic activities on the same terms as Polish citizens. Abovementioned means that they are free to choose the best suited form of activity either: - as an individual business, - partnership, - capital company.7>
  • 8. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Business regulations for EU citizens and others ◆ Regulations for citizens out of EU In the case of citizens of countries other than In other cases, citizens of other countries may those mentioned above who: pursue economic activity only in: 1) posses in Poland: a) the permit to settle, - limited partnership b) the permit long-term resident of the EU - limited joint stock company c) the permit for temporary residence - limited liability company d) the permit the temporary residence - joint stock company granted, staying on Polish territory or staying on that territory for the purpose of family reunification, family members e) the status of refugees, 2) enjoy the Polish Republic temporary protection, 3) posses a valid Card of the Pole, 4) are family members8>
  • 9. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Few steps to start your business Starting activity Notification of Obtaining license registration to public or permissions if entities necessary Registration as VAT Opening a bank “one window rule” remitter account moduls for KRS, ZUS, US, GUS Choice of a Drafting articles of Signing notary’s deed Signing contract for proper legal form association or statute registered office9>
  • 10. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com How much does it cost? ◆ Constant registration fees - 500 PLN despite of the legal form of company - 500 PLN for notification in MSiG - 17 PLN for VAT registration ◆ Notary’s fees depend on amount of share capital >10
  • 11. association info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Legal forms of business activity BUSINESS ACTIVITY Sole proprietator Taxes: 18%, 32% or Civil Law Partnership 19% Partnerships Capital Companies >11
  • 12. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Partnership There is no share capital required, no legal personality, partners represent a company, unlimited joint and several liability of the partners’ personal assets for the liabilities of the company ◆ Registered partnership - model company for partnerships, unlimited responsability of partners for company’s debts ◆ Professional partnership - reserved for professionals ◆ Limited partnership - based on at least two subjects: general partner with unlimited responsability, limited partner who finance the company ◆ Limited join stock partnership - combination of partnership and joint stock company >12
  • 13. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Capital company Capital company is obliged to establish share capital according to legal limits, has a legal personality. There is division between assets which belong to shareholders and to company. Also management is separated from the owners rights. One of the main advantage is limited liability of shareholders with unnlimited responsability of company in the same time. ◆ Limited liability company - min. share capital, 5.000 zl, one share at least 50 zl, subject to corporate income tax 19%, exists after signing articles of association (in organization) ◆ Joint stock company - min. share capital 100.000 zl, one stock 1 gr, supervisory board obliged, shares may be subject to public trading, subject to corporate income tax 19% ◆ European Company >13
  • 14. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Accounting obligations Documents for AGM All companies that are obliged to prepare and the decision on profit distribution in the annual audits where they must publish their: “Monitor Polski B”. - balance sheet, - profit and loss account, Audit - statement of changes in the share capital and the cash flow statement; Annual consolidated financial statements - as well as an introduction to the financial of capital groups and annual financial statements, statements of joint-stock companies, banks, - the auditor’s opinion (if required), insurers and investment and pension funds - the statement of discharge granted by the must be audited by licensed auditor. Annual General Meeting of Shareholders (which must take place max. before 6 months after finishing financial year) >14
  • 15. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Taxation ◆ corporate income tax (CIT), ◆ tax on goods and services (VAT), ◆ personal income tax (PIT), ◆ excise duty, ◆ tax on civil law transactions, ◆ game tax ◆ real estate tax, ◆ tax on means of transport, ◆ inheritance and donations tax, ◆ agricultural tax, ◆ forestry tax, ◆ tax on dogs, >15
  • 16. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com CIT Corporate Income Tax ◆ 19 % tax rate in 2012. Tax year could be different from the calendar year, but always 12 months; ◆ A branch of a non-resident company is generally taxed under the same rules as Polish company. Only its Polish source income is subject to taxation; ◆ Corporate income tax is paid annually, advance monthly payments have to be made; ◆ Tax losses suffered by the company may be carried forward and set off against over the five years; ◆ The standard withholding tax is 19% on dividends and 20% on interests and royalties. If paid abroad the rate may be reduced under the double tax treaties. >16
  • 17. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com PIT Personal Income Tax ◆ Domiciled individuals in Poland (over 183 days in Poland or if they they have “life center” in Poland) are subject to tax on their world-wide income ◆ In most cases, natural persons in Poland are subject to the income tax calculated in compliance with the progressive tax scale, differentiating following income thresholds, 18% and 32% ◆ There is also a 19% lump sum rate tax applicable to natural persons conducting business ◆ Capital revenues from sale of shares are subject to 19% tax >17
  • 18. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com VAT Value Added Tax Polish tax law provides for 4 VAT rates. ◆ The basic rate is 23% which is applied to majority of goods and services. ◆ Other rates: 8% - applies to a few groups of goods and services, e.g. goods related to health protection, groceries, 5% - applies to supply of some farm produce and foodstuffs; ◆ The rate of special significance is a 0% rate. It is applicable, in particular, to exports and intra-Community supply of goods, international transport services. >18
  • 19. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com VAT Value Added Tax Objective scope of taxation, determines chargeable events. Each person who professionally carries out the below stated activities: ◆ supply of goods (meant as transfer of the right to dispose of tangible property as owner) effected for consideration, ◆ supply of services for consideration; supply of goods is meant as any transaction which does not constitute a supply of goods, ◆ export of goods, ◆ import of goods, ◆ intra-Community supply of goods, ◆ intra-Community acquisition of goods …is subject to taxation. >19
  • 20. info@consuldimo.com | j.mortka@consuldimo.com | www.consuldimo.com Contacts Phone: +39 (0564) 405991 General: info@consuldimo.com Facebook: Consudimo Twitter: Consuldimo Blog: www.forbusinessinpoland.com Poland 12 Torfowa Street, Cracow, Poland j.mortka@consuldimo.com Skype: julitamortka Cell: +48 (607) 97 99 80 Cell: +39 (334) 98 18178