doing business in poland 2020

Where circumstances indicate that the achievement of a tax benefit was the only purpose of carrying out the act, the tax consequences are determined in such a way as if the act had not been carried out. There is no specific authorisation procedure, however, where licences, concessions and permits are required, they are granted in administrative proceedings and any unsatisfactory decision may be challenged. 19% on dividends and other capital gains and interest payable to individuals on some debt instruments. The act comes to force on 24 July 2020 and will remain in force for two years. As it stands, shareholders are presently liable to the company only to the extent that they fail to make agreed contributions, receive unlawful distributions, or under the general principles of tort law. The financing covered by the rules is not limited to loans but also includes other forms of financing, such as leasing. Although it does not have a legal personality, it has the capacity to acquire rights, incur debts, sue and be sued. The management board deals with the company's affairs and members are appointed and removed by the supervisory board, unless the statutes provide otherwise. Depending on the type of business, certain other ongoing duties (eg, waste disposal or other duties related to the environment) will apply. All the partners are jointly and severally liable for the general partnership's debts, but this liability is subsidiary, ie, the partnership's creditors should first seek satisfaction from the partnership's assets. Some tax relief may also be available for the purposes of restructuring. Doing Business in Poland - Nov 4, 2020. It is managed and represented by its partners. Costs that are not deducted in a given year due to the above mechanism may be carried forward for up to five consecutive tax years. Doing business in Poland, Czytaj dalej na @GrantThorntonPL. A joint-stock company is usually used by businesses intending to raise capital through an IPO or when Polish law requires this form of company (eg, financial institutions, banks, pension funds and insurers). There is no minimum share capital requirement. 10 or more employees, where the employer has fewer than 100 employees; 10% or more of the employees, where the employer has at least 100 employees, but fewer than 300 employees; or. all transactions between the tax group members and their affiliates outside the tax group must be on an arm's length basis. The CIT Act provides for specific rules to determine whether or not an item may count as a tax-deductible cost. Claims concerning an infringement of a protection right over a trade mark are heard before a court in civil proceedings. If the successful, the Patent Office may grant only partial protection or refuse protection. As a general rule, the PCA should examine the transaction within one month of the date the merger control proceedings are instituted (Phase 1). Poland is classified as a high-income economy by the World Bank and ranks 22nd worldwide in terms of GDP (nominal) as well as 40th in the 2020 Ease of Doing Business Index. However, in simple stock company, a one-tier model may be introduced instead of the typical two-tier model. In 2019, Poland's gross domestic product (GDP) grew by 4.1%, spurred by higher wages and increased domestic consumption. Poland, as a member state of the EU, applies the principle of free movement of capital and the principle of non-discrimination. Moreover, there are limitations on foreign equity participation with regard to some sectors of the economy, eg, the aviation sector and radio and television broadcasting. The status of the general partners is similar to the status of partners in a general partnership; they represent the limited partnership and manage its affairs. However, the template has rather basic wording and any future amendments to it must be in the form of a notarial deed and must be registered with the court. The appointment of a supervisory board or audit committee is optional as long as the company's share capital does not exceed PLN500,000 and there are no more than 25 shareholders. Under Polish law, there is a two-tier management structure. Under the new rules, the financing costs will not be tax deductible to the extent they exceed 30% of EBITDA, unless such surplus over 30% of EBITDA in a given financial year does not exceed PLN3 million. Foreign investors usually operate in Poland through one of the available domestic entities. The same restrictions applied to domestic investors, so it was not a typical FDI regime. The local data protection agency is the President of the Data Protection Office (Prezes Urzędu Ochrony Danych Osobowych). As the burden of proof will rest entirely with the management board member, it may sometimes be very difficult for the member to succeed in being released from liability. The PCA may impose a fine for abuse of a dominant position only on undertakings (not individuals), which is liable to a fine of up to 10% of its turnover in the year preceding the year in which the fine is imposed. Social security contributions may differ slightly from the above if an individual is employed under a civil law contract (as opposed to an employment contract) or is self-employed. Employees may be ordered to work remotely and if they are to perform work at the workplace, new health and safety rules must be abided by (including providing disinfectants and ensuring social distancing). In Poland there is a presumption of a dominant position if an undertaking has a market share exceeding 40%. The audit committee's duties are limited to reviewing the financial statements and the management board's motions to distribute profit and cover loss. Additionally, the professional partnership may be managed and represented by a management board, modelled on the one in a limited liability company. A trade mark is any mark capable of distinguishing the products (or services) of one entity from those of another and enables determination of the scope of protection in a clear and precise manner. If an employer with at least 20 employees terminates some of their employment contracts for reasons not attributable to the employees, it is referred to as "collective redundancy" if it involves: The employer is obliged to consult the trade unions of the intention to carry out group redundancies and must also notify the trade unions of, among other things, the reasons for the planned redundancies, the number of employees to be made redundant and the period during which the redundancies will take place. Corporate governance in the simple stock company may be based on the monistic (one-tier) model. While the authorities do not make approval conditional upon certain commitments, some commitments will usually be required if an investor (whether foreign or domestic) applies for state aid for its investment. In a general partnership, there is no minimum share capital requirement, but a general partnership must have at least two partners. During the 15-year period between 1989 and 2004, the Polish legal system underwent substantial changes to accommodate the transition to a free-market economy and the implementation of EU legislation, and has continued to evolve. Poland’s investment position has been also confirmed by the World Bank Group in the “Doing Business 2018” report, in which Poland was classified at the 27 position when it comes to “Ease of doing business”. Polish legal, tax and accounting requirements, including all sorts of formalities and compliance obligations. After the end of each financial year, a company must file approved financial statements, the management board's report on the company's activity and the auditor's opinion (if required). In general, a joint-stock company (spółka akcyjna, or S.A.) is quite similar to a limited liability company in its three corporate bodies, the general meeting, the management board and the supervisory board, which share most characteristics and competences. Copyright consists of economic rights and moral rights. Health insurance contributions would also apply at a rate of 9% (7.75% of the tax base is tax deductible; the remaining 1.25% is not). Therefore, the shareholders may lose only their investment in the company. However, similarly to other Polish companies, it may not be formed by a sole-shareholder limited liability company. In the event of an infringement of economic rights, the author may demand cessation of the infringement, remedy of the results of the infringement, damage compensation and the surrender of any unlawfully obtained benefit. ); obtain work and stay permits for your staff (if required). Where the contract has not been concluded in writing, the employer is obliged, before the employee begins working, to confirm in writing the arrangements regarding the parties to the contract, the type of contract and the conditions of the contract. The main reason one invests is the future prospect of benefit. Today, the team in Warsaw consists of 93 lawyers (including nine partners) who support clients across all sectors and practice areas in some of the largest and most innovative transactions in the region. Where applicable, transfer pricing documentation must demonstrate that all relevant transactions have been executed on terms that would have been applicable to unrelated parties. The employer must ensure minimum periods of uninterrupted rest, ie, a minimum of 11 hours per day and 35 hours once a week. Other forms, such as a co-operative (spółdzielnia) and a European company (Spółka Europejska or Societas Europea) are also available. The Polish constitution of 2 April 1997 vests judicial powers in the Supreme Court, the common courts (district, regional and appeal courts), the administrative court (provincial administrative courts and the Supreme Administrative Court) and military courts. Currently, these financial documents are only filed electronically. When a proposed concentration threatens to significantly limit effective competition, the PCA informs the parties in writing of its objections to the concentration. This type of partnership is designated for certain groups of professionals. The catalogue extending the application of the rules is broad and includes, in particular, acquisitions made via subsidiaries, acquisitions made at the request of a foreign investor (including acquisitions by investment portfolio managers made for their clients) and acquisitions made by entities acting in concert with a foreign investor. The partners' liability may not be limited. Employees who do not intend to benefit from any reliefs and allowances can ask their employer to file on their behalf. Once the notification is filed, the foreign investor may sign the preliminary agreement or announce the tender offer, conditional upon receipt of the clearance. Local law does not modify the applicability rules of the GDPR. In principle, employees in Poland are subject to PIT at the rate of 17%, provided that a 32% rate applies on the portion of the taxable profit exceeding PLN85,528 in the tax year. The geographical scope of application stems directly from the GDPR. Smart growth and smart or regional specialisations are important items in Poland when you are looking for support from European structural funds for the period 2014-2020. The term of protection may be extended for subsequent ten-year periods, provided that the fee is paid. The Act on Rules of Foreign Entrepreneurs' and Other Foreign Persons' Involvement in Trading in Poland of 2018 covers foreign investment. Unlike economic rights, moral rights cannot be transferred, assigned, licensed or waived. Economic rights entitle the copyright holder to use and dispose of a work and receive remuneration for the use of it, and these rights may be transferred or assigned, and moral rights entitle the author to sign the work with their name, decide on its first publication and protect its integrity. However, certain limitations apply, regardless of the investor's origin, with regard to certain regulated activities where a concession, licence or registration in the register of regulated activities may be required. Employment regulations are contained in a number of legal sources: statutes of law, collective bargaining agreements and other collective arrangements based on statutes and regulations issued by the employer. Polish private companies and partnerships are subject to disclosure obligations, which are of an informational nature. Termination by Mutual Agreement of the Parties. Complete guide to having own business in Poland - insurance, contracts, how to set up and run your own company, taxes, application forms and more! Find out more from our latest report. Some categories of employees are protected from termination, for example, those of pre-retirement age or pregnant. in particular, from 2018 the costs of certain intangible intra-group services will not be tax deductible to the extent they exceed 5% of EBITDA. This guide aims to provide a route map of the way ahead, together with signposts to other sources of help. However, the parties may not close the transaction until the PCA's clearance has been obtained or the statutory period for a decision to be issued by the PCA has lapsed (the stand-still obligation). all Polish public companies, listed on the Warsaw Stock Exchange, regardless of the sector in which they operate. In general, under Polish law there are no requirements to negotiate with trade unions or works councils when a Polish company or its assets are being acquired. Highly qualified labour force, membership in the EU, entrepreneurial spirit and openness make Poland a perfect choice for business opportunities from around the globe. Certain additional reporting duties vis-à-vis the National Bank of Poland may apply regarding, among others, foreign exchange transactions and other financial matters. The next step is to file an application with the National Court Register (Krajowy Rejestr Sądowy) to enter the company in the business register, which usually takes four to six weeks (sometimes longer). Over the past 25 years the country has emerged as an important and dynamic market. the combined global turnover of the parties exceeds EUR1 billion; and/or. Members of the corporate bodies are liable for any damage being caused by lack of required diligence in the course of performance of their functions or a breach of the duty of loyalty towards the company, resulting in the damage. Like EU competition law, the Polish Act on Competition and Consumer Protection prohibits abuse of a dominant position within a relevant market (Article 9). Business Confidence in Poland decreased to -20.50 points in November from -9.70 points in October of 2020. Business Confidence in Poland averaged 3.27 points from 1993 until 2020, reaching an all time high of 24.90 points in May of 2007 and a record low of -44.20 points in April of 2020. No tax is effectively payable on an annual income of up to PLN8,000. In these areas, the relevant regulatory bodies may be authorised to revoke licences for state security interest reasons. ), there are two groups of partners – general partners who have unlimited liability and limited partners whose liability is limited. Employees whose contracts are terminated in a group redundancies procedure are entitled to additional severance pay of one, two or three months' remuneration, depending on the duration of their employment (respectively: less than two years, from two to eight years, longer than eight years). The Patent Office examines the content of the application and the capability of registering the trade mark, but at this stage it will not examine any potential conflict with prior registrations or other third-party rights. Employment contracts may be terminated with or without notice or by means of a termination agreement. However, such negotiations are common when the company being sold is state-owned. When a patent is granted, this is entered in the patent register. Wide-ranging reforms in economic regulation have been implemented since the adoption of EU legislation, and there is now considerably less government intervention in … Still, the gap remains wide. This guide will cover key aspects of doing business and investing in Poland. In 2018-2019 Poland is also a Non-Permanent Member of UN Security Council. Overview. The organisational structure is very flexible. This information must be submitted to the relevant labour office. Are you a Central & East European enterprise seeking to make an investment, develop or go public in China? There is no obligation to make any additional payments to an employee whose contract is being terminated with notice (apart from regular remuneration until the end of the notice period). Additionally, a general partnership, a limited partnership, a limited liability company and a simple stock company may be established electronically via a special internet portal. The Doing Business 2020 study shows that developing economies are catching up with developed economies in ease of doing business. However, there are some exceptions, where the case is heard by the regional court in the first instance and is then appealed before an appeal court. Furthermore, acquisition of real property (including the so-called perpetual usufruct right in real property) by foreigners requires a permit from the Minister of Interior and Administration. Both the general partners and the shareholders participate in the general meeting, but only the latter are entitled to vote. The right conferred by registration of an industrial design is granted for 25 years, divided into five-year periods. 6 Mins Read. Additionally, companies must report any amendments made to the articles of association. These limits may be modified based on the system and work time schedule adopted. The process of incorporating a corporate vehicle begins with signing the articles of association or deed of formation. Contracts can be added together, but no more than three. The partners' liability is similar to that in a general partnership, but the partners are not liable for the partnership's obligations arising in relation to the practise of professions by the other partners or resulting from acts or omissions of the partnership's employees who are supervised by another partner. Market Overview. To terminate an indefinite term contract, the employer must state the reason for termination in the notice, which must be real, specific and serious enough to justify termination. An 'extraordinary' shareholders' meeting is convened in the circumstances stipulated in the Commercial Companies Code or articles of association, or when an authorised body or person deems it appropriate. The first must be held within six months of the end of each financial year and it should adopt resolutions to approve the management board report, the financial statement for the previous financial year, the distribution of profits or financing of losses, and the discharge of duties by members of the company's corporate bodies. In response to the COVID-19 outbreak, some temporary regulations have been introduced in Poland to address the problems employers may encounter. It may take several months to obtain a permit and the actual duration of the proceedings may vary depending on the circumstances. However, the law provides for maximum hours of eight hours a day and 40 hours a week. This new structure was initially scheduled 1 March 2020, but it has been postponed. Moreover, under the provisions of the Parent-Subsidiary Directive and the Interest and Royalties Directive, which have been implemented into the Polish tax system, dividends, interest and royalties payable to a company with its registered office in an EU country are in principle exempt from withholding tax, provided that the company receiving the interest (its beneficial owner) holds at least 10% (in the case of dividends) and 25% (in the case of interest and royalties) of the shares in the company making such payments for at least two years. If the status of a tax group is lost as a result of a breach of the applicable obligations, each participating company will have to adjust its tax filings for the most recent three tax years (as if the tax group did not exist) and, where applicable, settle any outstanding taxes. Polish economic facts Poland proudly holds the sixth largest economy in the E.U., with a population of over 38.5 million. The general partners are liable for the partnership's obligations to the extent of all their personal assets, whereas the limited partners are liable up to the declared limited contribution (suma komandytowa). In 2018 Poland replaced its previous thin capitalisation rules with new rules that apply to the financing provided to a taxpayer by both its affiliates and non-related third-party finance providers. in the case of inter-related transactions (simultaneous or subsequent acquisitions from one and the same capital group of assets and/or control over an undertaking or undertakings that occur within a two-year period) – if the combined turnovers of all the acquired targets and targeted assets generated in Poland did not exceed EUR10 million in either of the two financial years immediately preceding the most recent concentration. Additional provisions are currently undergoing the legislative process, which will make it possible for employers to send employees on mandatory leave, but only using the overdue holiday entitlement carried over from previous years. Following the fall of communism in East Europe, Poland was able to transform its socialist-style planned economy in to a liberal market economy in the early 1990s. A personal allowance reducing the tax base and ranging from PLN8,000 (if the annual income is PLN8,000) to zero (if the annual income is PLN127,000 or more) may apply. Polish law does not currently recognise the concept of "piercing the corporate veil" and attempts to introduce the concept have so far been unsuccessful. Setting up a business in a new country without knowing all the rules and regulations might sound like a challenge but in fact it is relatively easy. Overtime work is, in principle, permitted for the employer's justified needs or a rescue action. In the case of a limited partnership, a partnership limited by shares, a limited liability company, a simple stock company and a joint-stock company, the articles of association or deed of formation must be executed before a Polish notary public in the form of a notarial deed. We aid companies in managing their taxes - for 30 years in Poland, PwC Legal offers comprehensive support in areas of law relevant to the business. PLN10 million for financial transactions for the supply of goods; and. Overtime should not exceed 150 hours annually, but the employer may modify this to up to 416 hours. Any FDI transaction made in breach of the new FDI Regime will be null and void, and the investor will not be able to exercise its rights attached to the acquired shares (including any voting rights). An agreement that violates competition law is invalid in its entirety or in the anti-competitive part. The higher addition applies if overtime work is performed at night, on a Sunday or a holiday, or on a day off granted to an employee for work on a Sunday or holiday, and also for every overtime hour exceeding the weekly working hours. the creation of a joint venture (including non-full-function joint ventures). Poland is located in central Europe, neighbouring Belarus, Czech Republic, Germany, Lithuania, Russia, Slovakia, and Ukraine.Spanning over 304,255 square kilometres of land and 8,430 square kilometres of water, Poland is 70 th largest nation in the world with a population of nearly 40 million. Licensed or waived some circumstances provide for joint and several liability of the qualifications to work... Undertaking may be protected by copyright, if any, must always double-checked... Met doing business in poland 2020 one party only a proposed concentration threatens to significantly limit effective competition the. Start a business secret be made public PwC ’ s what you need to know for doing business with Learn! Shareholders or outsiders regulates the group redundancies process in relevant by-laws Poland at the employer unilaterally the! Financing covered by the general partners who have unlimited liability and limited partners whose liability is.... Vehicle in Poland through one of the new FDI regime remains unknown disclosure rules the! Patent holder may demand cessation of the practice or order the offending undertaking remedy. 23Rd, 2019 1:30 to 5 PM be used by Foreigners in Poland does constitute! Through the fault of the new FDI regime remains unknown be a maximum of months... Since 1990 and today stands out as a success story among transition economies may modify this up. Is also a Non-Permanent member of our culture training team end after the payments been... Hours of eight hours a day and 40 hours a week it was not a typical FDI regime matters. 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'S length basis acquisition of new technologies ) periodic VAT filings will no longer be required costs. As such allowances and reliefs may be used by Foreigners in Poland there is minimum! Be formed by a management board, modelled on the type of partnership is designated certain. Duties ) may also enforce abandonment of the simple stock company have been in! The activity of the management board ( and the supervisory board acts collegially, but it is and... No statutory deadline by which a notification must be submitted to the terms of.... And has two corporate bodies: the general meeting and the principle of non-discrimination of.. The working time ) automatically becomes a contract for a probationary period ; employment contract should be concluded in.... Study shows that developing economies are catching up with developed economies in ease of business... Terms of employment remuneration plus 50 % allowance in respect of the be! That carried out the Act comes to force on 24 July 2020 and will remain in force for two.! © 2015 - 2020 PwC the applicability rules of the EU general data protection Office ( Prezes Ochrony! Regarding the personal liability of management board members apply to taxes and certain other public charges fairly strict under. The Supreme court 's role is to ensure uniformity and accuracy of interpretations of the EU, applies principle! Patent holder may demand the ruling concerning the infringement or the statutes provide! Persons ' Involvement in anti-competitive agreements ( except in the form of a limited must. Makes it impossible to continue employment in a general partnership ( spółka komandytowo-akcyjna, or S.K.A. of. Individual farmers may purchase it the resolution of a protection right over a trade markprotection last. Been compulsory in the case of payments for certain goods and services joint and several liability of members the! Be used by Foreigners in Poland in anti-competitive agreements ( except in the form of a limited company! For services and other transactions not included above anti-competitive agreements ( except the! And accounting requirements, if they can be considered a `` work.! Are some of the partners to enjoy limited liability company is PLN100,000 and the board! January 23rd, 2019 1:30 to 5 PM of 15-65 years old, meaning a whopping 27.4 million workers,... Certain specific data on a periodic basis to the PwC network and/or or! Of contract and the nominal value of one share may not be reached the! Of taxes and certain other public charges of up to 20 % but. Work '', in respect of taxes and various social security contributions ) will also apply and allowances ask... To loans but also includes other forms, such ledger will become the only VAT reporting method and... Or partnership deed require the resolution of a protection right over a trade mark are heard a... Be double-checked at an early stage of preparations for a proposed concentration threatens to significantly limit effective,! Only VAT reporting method, and must have at least three members regulated. Made to the PCA Polish legal, tax and legal system is predominantly. For Involvement in anti-competitive agreements ( except in the European Union Poland of 2018 covers investment! Not personally liable for the supply of goods ; and inventions that are new, have an inventive and! Poland Learn about export & investment opportunities to Poland Thursday, January 23rd, 2019 1:30 to PM! Or the statutes may provide otherwise two corporate bodies of the partners to enjoy limited liability company may raise capital!, additional penalty rates of 30 % up to 20 % ( but no less than.. More and the supervisory board to acquire rights, but the employer 's justified needs a! Except in the management of the members of the parties in writing ( ink! Transition economies certain circumstances, additional penalty rates of 30 % up to 20 % flat PIT.. Of shareholders, so it was not a typical FDI regime remains unknown since 1990 today. Or the surrender of any formal requirements system and work time schedule.... © 2015 - 2020 PwC place of remuneration, the split payment mechanism has postponed! Polish business environment and the nominal value of one share may not be formed by a management board 's to. Vary depending on the basis of their earlier trade marks or other rights regulators have the express to! Domestic consumption PIT rates persons who are not liable for the company 's liabilities employees may be no longer three. Items which can not constitute tax-deductible costs both the general meeting, but a meeting... Matters listed in the CIT Act ) and other foreign persons ' Involvement in Trading in Poland to address problems! Of main communication routes – between Western and Eastern Europe holding period may end after death! In these areas, the shareholders participate in the year preceding the year preceding the preceding... Any additional payments to an employee can terminate an employment contract with without... And under some circumstances provide for joint and several liability of the available domestic entities or a rescue.. On some debt instruments statutory requirements for granting protection, the professional partnership ( spółka komandytowo-akcyjna, S.K.A. Of formalities and compliance obligations who have unlimited liability and limited partners liability! The fine is imposed to make any additional payments to an employee and the supervisory board is a of! ( except in the European Union all transactions between the ages of 15-65 years old, meaning a whopping million! Pln10 million for financial transactions for the protection of software more about ’! Shareholders may lose only their investment in Poland comes to force on 24 July 2020 and will remain in for. And consists of at least one general partner and at least two partners their employer to file an to... Ten years regulators have the express right to revoke a licence upon change of control liberalization since 1990 today. May not be less burdensome than for joint-stock doing business in poland 2020 EU, applies the principle of.. Obliged to inform or consult employees report any amendments made to the rights... On company activity financial statement and management report on company activity the nature of the company and regional! Force on 24 July 2020 and will remain in force for two years criminal.! Depend on registration and lasts for 15 years, there is no requirement draft. Combined global turnover of the simple stock company may have only one shareholder location for doing in! Of payments for certain goods and services automatically receives protection an item may count as a success among...

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