Article
3 min read
Author
Anja Simic
Published
August 12, 2021
Last Update
July 01, 2024
Table of Contents
Registering the Sole Proprietorship in Poland
Opening a Business Bank Account in Poland
Taxation for Independent Contractors in Poland
Employment Misclassification Risks in Poland
Before you go
The trend of self-employment is emerging in many countries, and Poland is no different. One way to set up your independent trade in Poland is to create a jednoosobowa działalność gospodarcza (sole proprietorship). The individual conducts a business activity for their own account and has full liability over the activities.
This article will cover the basics of self-employment in Poland and guide you through the registration process.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
To register a sole proprietorship in Poland, you need to fill in the CEIDG-1 form. This form serves as registration in Poland's Central Register and Information on Economic Activity. There is no cost to register, and it can be done online, in person, or via registered mail. The CEIDG form must be signed before submission.
The CEIDG form must be submitted when starting a business activity and in the event of any changes in the register, suspension, resumption, or cessation of activity.
The application for registration in the Central Register and Information on Economic Activity must contain:
In addition to the CEIDG application form, one should submit a declaration about the absence of judgments with a prohibition on the operation of economic activity, a prohibition on practicing a specific profession, and a prohibition on the operation of an activity connected with upbringing, treatment, education or care of minors.
The REGON (Rejestr Gospodarki Narodowej) is the Polish National Business Registry Number (statistical number). Any entity, including an individual entrepreneur, that conducts business in Poland, needs to be registered in the REGON registry. The Central Statistical Office assigns the REGON number. For individual entrepreneurs, the REGON number is obtained when registering with CEIDG. REGON number groups the entity's information such as the company name, the owner's name, the owner's PESEL, etc.
NIP (Tax Identification Number) is a 10-digit number which identifies entities that pay taxes in Poland. It is assigned automatically upon business registration.
In Poland, an entrepreneur is required to open a bank account.
The requirements to open a bank account depend on the banks, but in general, you will need:
In Poland, there is a 19% flat tax rate for individual entrepreneurs. There are no personal allowances and tax credits under the flat-rate tax system, except credits for compulsory health insurance contributions.
Alternatively, individual entrepreneur may choose taxation under general rules. In such case, progressive taxation applies, with two tax rates, depending on the annual income:
A tax-free threshold of PLN 30,000 is applicable.
The self-employment is very popular in Poland, but in some cases it generates legal risks connected with a possible re-classification of individual business activity into an employment contract.
In practice, if a relationship between a client/company and a contractor proves to be an employment relationship, significant sanctions may be applied, including those of financial nature. Moreover, independent contractors may be reclassified to employees.
Provided the above, the nature of the working relationship will be the determining factor upon assessment. The Labor Code assesses the working relationship as employment based on two major factors:
Provided the above, it is important to define parties' intentions and, if they do not want to conclude a contract of employment, to carefully draft a contract between the individual entrepreneur and the company so that it is a service agreement which will not be qualified as employment relationship. In particular, such B2B contract shall ensure flexibility and independence of an individual.
We hope you found this article useful. If you're planning to hire independent contractors in Poland, find more information here. Or, if you are planning on working with clients outside of Poland, consider using Deel!
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