Doing Business in Poland

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Fast growing economy

Poland has pursued a policy of economic liberalization since 1990 and today stands out as a success story among transition economies. Poland is the 6th largest economy in the European Union, 23rd economy in the world and one of the fastest growing economies in Central Europe. At the end of 2021, Poland's GDP reached approximately $660 billion.

Fifth most populous EU member

The total area of Poland is 312,696 square kilometers, which makes it the ninth largest country in Europe and 69th in the world. With a population of over 38 million people, Poland is the fifth most populous member of the European Union and the 38th most populous country in the world.


Poland is a democratic state under the rule of law, with a tripartite division of power and the president as the head of state. The president is elected by popular vote every five years. The government structure and executive powers centre on the Council of Ministers, led by the President of the Council of Ministers, i.e. prime minister. The president appoints the cabinet based on the proposal from the prime minister, typically from the majority coalition formed in the Sejm. Legislative power lies with the bicameral parliament, consisiting of the Sejm and the Senate. Judicial power is exercised by independent and autonomous courts.

Abundant human capital

Poles are one of the best-educated societies in Europe. There are over 130 public universities and over 320 non-public universities. There are over 1.2 million students in Poland, of which about 800,000 are full-time students. A young, well educated and ambitious society is Poland’s strongest asset. Creative, highly motivated Polish workers are an excellent base for conducting any form of business. A large supply of human resources is an important factor in a long-term, since Polish wages are up to four times lower than those in Western Europe.

Financial and capital markets

Poland has well developed financial markets the banking system. Giełda Papierów Wartościowych w Warszawie (The Warsaw Stock Exchange) is the official capital market and there are a few alternative smaller markets as well. The most important stock indices of the main market are: WIG, WIG20, MWIG40 and SWIG80. The WSE lists shares of more than 400 companies (including about 50 foreign ones).

Business entities

Starting a business in Poland is relatively easy. In practice, the limited liability company (LLC) is the most common form of business organisation for foreign and domestic investors engaging in business in Poland. The minimum share capital required to establish an LCC is PLN 5 000. Contribution to the share capital of an LLC have to be made prior to its registration. In addition, readymade LLCs are available for purchasing off the shelf and can be ready for trading within days. Besides, business activity in Poland can be conducted in the form of: sole proprietorship, civil partnership, joint-stock company, general partnership, partnership, limited partnership and limited joint-stock partnership.

Financial reporting

The accounting standards in Poland have been undergoing significant changes to bring Polish accounting practices closer to the International Financial Reporting Standards (IFRS). However, due to the many changes in IFRS, differences continue to exist. Accounting records should be kept and financial statements drawn up in the Polish language and expressed in the Polish currency. A statutory audit is required for all joint stock companies, limited liability companies, general partnerships, partnerships, limited partnerships, civil partnerships and natural person enterprises if two of the following criteria are met: a) the average annual full-time employment was at least 50; b) balance sheet total as at the end of the financial year equalled at least EUR 2.5 million in the Polish currency; and c) net revenues from sales of goods and products and financial operations for the financial year equalled at least EUR 5 million in the Polish currency.


Labour costs in Poland are up to four times lower than those in the most developed economies in the EU. However, taxes and social security contributions are a heavy burden. Polish employers must pay approximately 0,60-0,70 Euros in taxes and social security for every euro paid to their employees. Employers are obliged to calculate and pay monthly withholding tax, social security and health insurance for their employees, taking into account the employee’s income, decisions on the joint taxation of spouses, and varying amounts of tax deductions. Employees are entitled to almost four week paid holiday per twelve months worked.

Corporate taxes

The flat rate of corporate income tax is 19%. Companies having their registered office or management in Poland are subject to CIT on all their income. Companies not having their registered office or management in Poland are subject to CIT only on income earned in Poland. Taxpayers are no longer obliged to submit tax returns monthly; however, they are still obliged to pay advances on a monthly basis. Taxpayers are obliged to submit CIT-8 tax returns on an annual basis.

The rate of withholding tax (WHT) applicable under Polish law is 20%, but a lower rate or tax exemption may be claimed under a double taxation treaty (DTT). Dividends disbursed from Poland are subject to 19% withholding tax. Again, a DTT to which Poland is a party may provide for a reduced rate of WHT. Poland has double taxation treaties with approximately 90 countries.


The basic VAT rate in Poland is 23% and applies to most goods and services. Reduced VAT rates are also available which are - 0%, 5% and 8% respectively. A preferential rate of 8% applies to most foodstuffs, pharmaceuticals and medical products, restaurants and hotel services, transportation services as well as residential housing, magazines and newspapers. A reduced rate of 5% applies to unprocessed foodstuffs and books. The tax paid on purchases can be offset against the tax collected on sales, which is payable through monthly VAT returns.

From February 1 to July 31, 2022, the legislature reduced the VAT rate on certain food goods from 5% to 0%, including meat and fish, dairy products or vegetables and fruits. Additionally, VAT on fuel has dropped from 23% to 8%, on fertilizers to 0% and on electricity and heat to 5%. All this is part of the so-called Anti-Inflation Shield 2.0.


Last update : 22.07.2022

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