Business Registration

A sole proprietorship (jednoosobowa działalność gospodarcza) is the most popular form of running a business in Poland. It can be set up by anyone with a Trusted Profile (Profil Zaufany), from the comfort of their home, via the biznes.gov.pl portal, and it is completely free of charge.

When setting up a business, you must choose one of three forms of income taxation: flat-rate tax (podatek liniowy), progressive tax scale (skala podatkowa), or lump-sum tax on recorded revenue (ryczałt). Choosing the optimal form must be preceded by an analysis of projected revenues and costs, as well as other factors. Applying the flat-rate tax or lump-sum tax is not always possible or beneficial. The form of taxation can be changed once a year, by 20 February.

When registering a business online, you also register with ZUS (Social Insurance Institution). Running a sole proprietorship entails the obligation to pay contributions regardless of the income earned. For the first 6 months, most entrepreneurs can take advantage of the start-up relief (ulga na start), and for the following 24 months — preferential ZUS contributions. These reliefs significantly reduce the contribution amounts compared to the standard "full" ZUS, whose minimum level reaches approximately PLN 2,000/month.

The last important issue when setting up a business is VAT taxation. You need to consider whether it is worthwhile to take advantage of the exemption and whether the law permits it. It may also turn out that the business activity will be "compulsorily" exempt from VAT. It is also essential to consider the structure of the company’s customers — whether they are mainly other businesses or consumers (retail clients) — as well as the scale of expected expenditure. Unless specific provisions state otherwise, opting out of or returning to the exemption may take place at any time during the financial year.