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 (individual enterprise). 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.
Registering the Sole Proprietorship in Poland
The CEIDG-1 Form
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 from must be signed before submission.
The CEIDG form must be submitted when setting up a new company and in the event of a change in the register, suspension, resumption, or cessation of activity.
The application for registration in the Central Register and Information on Economic Activity must contain:
- the entrepreneur specification and the PESEL registration number (if applicable)
- date of birth
- the place of residence of the entrepreneur, or a business address (if the activity takes place at a specific address)
- entrepreneur's NIP number (if applicable)
- the object of business activity under the Polish Classification of Activities (PKD)
- the date of launching the business activity
- the income tax payment form
- contact details
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.
REGON and NIP Numbers in Poland
The REGON (Rejestr Gospodarki Narodowej) is the Polish National Business Registry 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.
Opening a Business Bank Account in Poland
In Poland, an entrepreneur is not required to open a bank account. However, if you are planning on doing any financial activity, you should have a bank account.
The requirements to open a bank account depends on the banks, but in general, you will need:
- ID card
- certificate of registration in CEIDG
- a copy of the certificate of the REGON number
- the company's stamp
Taxation for Independent Contractors in Poland
In Poland, there is a 19% flat tax rate, which applies to individuals engaged in small-scale business. There are no personal allowances and tax credits under the flat-rate tax system, except credits for compulsory health insurance contributions.
Employment Misclassification Risks in Poland
Cases of employment misclassification are increasing due to the gig economy expansion. If a working relationship between a client and a contractor proves to be an employment relationship, significant sanctions will be applied. Those sanctions are usually financial, as the employer will be held liable for up to five years of unpaid social insurance contributions. Independent contractors will then be reclassified to employees.
A claim can be filed to the labor court to ascertain the existence of the employment relationship. It is done when there is suspicion that the worker was employed on the basis of an actual employment contract.
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:
- The work performance of a specified type for the benefit of and under the supervision of an employer and
- At a place and time specified by the employer
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