Proximity, economic growth, favorable migration policy and cultural resemblance makes Poland one of the top destinations for Belarusian and Ukrainian citizens to migrate. Poland is also a rapidly developing gaming and IT hub. The Polish government also introduced a special incentive plan to facilitate relocation of IT business and skilled IT workers.
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As a member of the EU, Poland has stable institutions and predictable tax and regulatory regimes. Poland has also a multilingual workforce skilled in IT. In recent years, the international business community recognized the attractiveness of moving IT operations to Poland. Major financial institutions (e.g. Goldman Sachs, Credit Suisse and JP Morgan Chase) decided to move a significant part of their back office IT operations to Poland. Moreover, major tech companies, including most notably Google, Microsoft and Samsung, also expanded their Polish operations.
In addition to foreign investment, the domestic IT market is also booming, especially the gaming sector. The Warsaw listed CD Project Red is currently one of the hottest up-and-coming tech stocks thanks to a global success of ‘The Witcher’ franchise.
At Maruta, our team of experts has experience in supporting foreign individuals and business in starting and developing business in Poland, including setting up corporate vehicles and providing advice on the best legal mechanisms for the protection of IP, know-how and trade secrets. Our unique expertise in IT also ensures compliance with data protection laws and allows to properly structure employment relations and IP transfers.
We can help you navigate through this transition. We offer a comprehensive starting package for new and relocating IT companies and professionals.
Furthermore, the Polish government also announced ‘Poland. Business Harbour’ plan. Under the plan, Belarus and Ukraine IT specialists can benefit from a fast-track to obtain a visa and residency permit for them and their families. According to government officials, visa applications will be processed swiftly.
Start-ups and developer teams can also receive a one-off financial relocation aid of PLN 5 100 (around USD 1 360). After the relocation, a start-up can obtain further financing from the Polish Industrial Development Agency, if a Polish industrial partner is found.
Poland is open for migration, especially form its eastern neighbors. According to the Polish migration authorities, 21 thousand Belarusians have currently a valid residence permit and live in Poland. The total number of Belarusians in Poland is said to number around 40 thousand, making it the second largest ethnical minority.
In order to work in Poland, Belarusian or Ukrainian citizens have to obtain a residence permit and a work permit. Polish migration authorities seldomly reject applications for those permits, especially for specialized IT workers. However, the migration offices are clogged with applications, so it takes up to a few months to obtain the proper permit. During that time, a Belarusian citizen can stay in Poland legally. Poland. Business Harbour program should expedite the permit procedures for skilled IT workers and entrepreneurs.
Once a Belarusian or Ukrainian citizen obtained a residency in Poland, he can register as a sole trader and work as a freelance contractor. Additionally, a sole trader has to have a bank account in a Polish bank and register with the Social Insurance Institution (‘ZUS’). A sole trader has to pay social security contributions (around USD 160 monthly for the first 2 years) and (generally) a 19% personal income tax (‘PIT’).
Incorporation allows for cooperation and facilitates growth of the business.
Four kinds of partnerships can be distinguished in the Polish corporate system: 1. registered partnership; 2. professional partnership; 3. limited partnership and 4. partnership limited by shares. Furthermore, two types of corporations are available: a limited liability company (‘LLC’) and a joint-stock company.
The main difference between those two types is the tax regime. Partnerships are generally tax transparent pass-through vehicles (except for the partnership limited by shares) – PIT is due from the partner after receiving dividends. Whilst corporations are liable to corporate income tax (‘CIT’), the shareholder also has to pay PIT after receiving the dividend form the corporation.
In practice, two vehicles are suitable for IT entrepreneurs: registered partnership and an LLC. To our clients, we recommend an LLC as a preferred corporate vehicle. Although this vehicle is not entirely tax efficient, a properly structured LLC allows for a quick scale-up of operations. Most notably, an LLC is also a preferred corporate form for any potential investors.
Incorporating an LLC in Poland is easy and can be done on-line in a few days. A contribution of PLN 5 000 (around USD 1 300) is required for the share capital. The documents can be filed online via the S-24 platform. Generally, a share purchase agreement with signatures certified by a notary public is required and the sale is effective from the execution of the agreement. In case of a sale, a stamp duty of 0,5% of the sale price is due.
After an LLC is incorporated via S-24, other institutions (most notably ZUS) are notified automatically. However, the LLC still has to be registered with the tax authorities (a NIP-8 form). A separate notification(VAT-R form) is required for the value added tax (‘VAT’) purposes.
Beneficial owners of the LLC have to be registered with the Central Register of Beneficial Owners. Persons holding shares are beneficial owners. If the LLC is owned by another corporation, the person controlling the shareholder is a beneficial owner.
If the LLC employs or pays contributions for any individuals, each employee has to be registered with ZUS. This can be done on-line. Contributions are payable until 10th of every month. Some of the contributions are deducted from the salary of the employee, but around 19% of the salary has to be payed directly by the employers.
It should be noted, though, that IT business in Poland is mainly based on B2B cooperation, where any cooperating specialist provides their services based on a civil law contract, not subject to the Labour Code. In this model the LLC does not pay any social security contributions, but issues an invoice and pays VAT.
We will help with preparing and filing relevant applications, provide information about the application procedure for you, your family and your employees and contractors.
We can advise on choosing the most tech-friendly, online focused bank and inform about favorable currency swap options.
We will navigate you through the process of company establishment, in a way that is time-efficient and safe from the legal perspective. In particular, we can simplify the process by setting up a company in our name (name of the LLC chosen by the Client, also Management Board provided by the Client). As soon as it is registered, we transfer all the shares to the Client).
We will assist in filings with tax and social security authorities. When required, we will recommend an accounting firm and negotiate terms of cooperation on your behalf.
We will provide a bundle of template contracts (B2B, labor agreements and others) with proper IP transfer clauses and non-competition clauses. A Polish labor law guide will also be provided. When necessary, we will advise on how to structure employment relations, which type of contract to choose and how to manage matters related to employees’ social security or similar public obligations.
Our team of corporate lawyers recognized in international rankings offers comprehensive advice on structuring corporate relations in order to facilitate growth and potential, namely future investments by PE/VC actors. We offer advice on drafting internal documents (minutes of shareholders meeting, appointment of board member, internal rule books and so on). We can also draft and negotiate agreements and structure the relationships between owners of the business (shareholder agreements) and the relation between the CEO and the LLC (proper managerial contract).
Maruta has the best TMT and GDPR practice in Poland. Our experts will advise on compliance with data protection laws, internal policies and records as well as other required documents. Template data processing agreements are included in the starting package. When required, we provide services of dedicated Data Protection Officer, responsible for managing data protection matters.
We will also gladly assist in any other day-to-day affairs such as choosing an office, negotiating rent agreement and others.
In case of any questions you can also contact Bartosz, a law firm partner.
Bartosz Romanowski bromanowski@maruta.pl
(contact available in English and Polish)