The Republic of Poland is a parliamentary republic in Central Europe. It is situated between the Baltic Sea in the north and two mountain ranges (the Sudetes and the Carpathian Mountains) in the south. Bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine and Belarus to the east; and the Baltic Sea, and Lithuania to the north. Its strategic geographical position has played a major role in Poland’s development. Located on the crossroads between Eastern and Western Europe, the country is a link between West and East and offers the large market of Central Europe for trade and transport.
Poland is one of the most populous countries in Central Europe, its consumer market potential is more than 38 million people. Joining NATO in 1999 and the European Union in May 2004 have opened the Polish market to foreign investors and development opportunities.
The Polish joint-stock company (Spolkaakcyjna) is ideal for large businesses and can be found by one or more entity (natural or legal persons), in addition, it can also be listed on the Warsaw Stock Exchange or other stock exchanges. One of its main features is that when it comes to liability, this type of company is liable for its debts and obligations without limitations. However, the shareholders of the company are not liable for the company’s obligations.
This type of company in Poland requires a minimum share capital of 100,000 PLN (approximately €24,000) The capital must be divided into shares with a minimum nominal value of at least 0,01 PLN and the contributions can be made in cash and/or in kind.
The management bodies of a Polish joint stock company is a two-tier system comprising the management board and the supervisory board.
What are the main features of a Polish S.A. joint stock company?
- a popular format for larger companies that wish to raise public capital
- minimum share capital 100,000 zlotys (€24,000), at least 25% needs to be paid up
- minimum 8% of annual profits to reserve fund ( up to maximum one-third of share capital)
- annual accounts and independent audit required
Although tax rates in Poland are not the lowest in the European Union, they are still much lower when compared to other EU countries, such as France, Germany, Spain, Scandinavian states. The Corporate Income Tax rate is 15% for the first tax year of the company existence. In next years, the 15% rate is applicable only to those companies, that have a total revenue for the last tax year less than 1 200 000 EUR. For the remaining companies, the tax rate is 19%.
Poland’s VAT regime was updated in 2004 upon Poland’s full accession into the EU. The standard VAT rate in Poland is 23%. However, there are reduced rates of 8% and 5% that apply to certain certain food, books, newspapers and the supply of a limited number of other services. A number of services are exempt from VAT in Poland, such as financial and postal services.
Poland has signed approximately 80 double tax treaties with countries around the world such as Australia, Canada, Germany, France, UK or the United States of America.
The Polish government is in favor of foreign investments and has introduced business-friendly reforms to lower taxes.