Limited Liability Company (LLC) – the most popular legal form for investors in Poland.

A limited liability company  is the most popular type of company in Poland. Its popularity is due to several reasons:

1. the share capital is low - only 1.200 Eur,
2. the company may exercise any kind of activity.
3. the shareholders are not liable for the company's debts,
4. the shareholders have direct control of the company's activity (they may examine the company's books and other documents),
5. the shareholders may manage the company themselves if they wish (as members of the Management Board) or nominate third parties,
6. the shareholders are not subject to the social security contributions (just for the mere fact that they hold the shares),
7. even though it is not the most tax efficient structure, there still exist ways to optimise taxwise the transfer of money from the company to the shareholders or management board members.
8. The LLC is subject to Corporate Income Tax according to a rate of 19%. 
9. Subsequently, the dividend paid to the shareholders is subject to the income tax of 19%. This tax is payable by the company to the tax office and is deducted from the sum transferred to the shareholders.

In one of my next articles I will present other legal forms in which you can run business in Poland – some of them more tax efficient.

What are the formalities you need to fulfil if you want to create an LLC in Poland – read here: 

Who may establish an LLC and be the Management Board Member – read here:

Employment, remuneration and taxes of Management Board Members – read here:

Good luck in your future endeavours in Poland!

Author

Agata Adamczyk LL.M

Legal Counsel

Limited Liability Company (LLC) – the most popular legal form for investors in Poland.