To guarantee easier market access and gain trust in Poland, it is recommended to establish a legal entity. The critical step is to choose which type of the entity to form.
The most common legal form among entities with foreign capital is a Limited Liability company (Sp. z o.o.) – there are also some other forms, but they’re rarely used.
Setting up a company is easiest done with help of local lawyers.
As a standard, companies in Poland pay 19% corporate tax on earnings.
9% reduced CIT rate is applicable to
- small taxpayers earning revenues equivalent to EUR 2M Eur or less including VAT,
- for taxpayers starting a new business for their first tax year in operation,
- in the case of companies that continue their activity – sales revenue including VAT, for the previous tax year did not exceed 2M Eur
VAT rates in Poland: basic: 23%, reduced 8%
Average salary in Poland: 5331 PLN gross
Minimum wage in Poland: 2.800 PLN gross
Personal progressive income tax in Poland: 17% and 32% after exceeding income 85.528 PLN
Social security system in Poland has has three main categories where the payments are made, summing-up to ca. 20,48% for the employer and 13,71% for the employee.
- The Social Insurance Institution ZUS
- Obligatory Pension funds (OFE)
- Voluntary pension funds
Special Economic Zones are widely used, and companies can be granted various tax benefits when investing in certain regions.
The regulation of employment in Poland is governed by the Labor Code, which applies equally and must be complied with by both the employer and the employee. Employment contracts cannot be less advantageous to the employee than the Labour Code.
Expats are liable to pay Polish taxes and social charges if they stay in the country at least 183 days during a calendar year. Both wages and prices are higher in Warsaw and other big cities compared to the other parts of the country. The minimum monthly salary in Poland is PLN 2800 in 2021.
There are 3 methods of terminating employment agreement in Poland: termination by mutual consent, termination with notice and termination without notice. There has to be a valid reason for terminating the employment, unless the employee is still on a probation period.
BEING AN EXPAT
Poland is growing in popularity as a destination for Expats. As part of the EU, Polish labor market is open to all EU-citizens. Many foreigners working in Poland are fully under Polish social system, but also other solutions are possible – depending on the country of origin.
If an expat can prove being under social security of another EU-country, payment of certain social costs (ZUS) can be avoided.