Foreign Board Members in Poland – Who Is Liable for Tax on Their Remuneration?

Posted on 01.04.202601.04.2026 by kancelaria

A guide for international groups delegating employees to management positions in Polish subsidiaries

A common structure, an uncommon tax trap

International corporate groups operating in Poland frequently second their own employees to serve on the management boards of Polish subsidiaries. The arrangement makes business sense: the parent company retains oversight, the seconded manager maintains employment continuity abroad, and the Polish entity benefits from experienced leadership aligned with the group’s strategy.

From a tax perspective, however, this structure is far from straightforward. The interplay between Polish domestic tax law, applicable double tax treaties, and the internal remuneration flow within the group creates a set of obligations that Polish subsidiaries cannot afford to overlook. A recent individual tax ruling issued by the Director of the National Tax Information Office (KIS) on 22 April 2025 (ref. 0115-KDIT1.4011.176.2025.1.MR) provides a useful framework for understanding these obligations.

Substance over form – how Poland classifies board remuneration

One might expect that a person employed under a foreign employment contract would be taxed in Poland under the rules applicable to employment income. Polish tax law takes a different approach. Under Article 13(7) of the Personal Income Tax Act (PIT Act), income received by members of the management boards of legal entities is classified as income from personally performed activities (działalność wykonywana osobiście), irrespective of the formal legal basis of appointment. However, in practice, where remuneration is split between board functions and other roles (e.g. employment or management services), different tax classifications may apply to each component.

This means that even where the secondment is formalised through an addendum to a foreign employment contract, the nature of the functions actually performed – not the label attached to the contractual relationship – determines the tax classification. If the individual serves on the management board of a Polish company and exercises management functions, Article 13(7) applies to the board-related portion of their remuneration.

Poland’s right to tax – limited tax liability of non-residents

A non-resident – that is, an individual who does not have their place of residence in Poland – is subject to Polish tax only on income sourced in Poland (Article 3(2a) of the PIT Act). The critical question is therefore whether remuneration for serving on the board of a Polish company constitutes Polish-source income, even if it is paid by a foreign entity.

The tax authorities have consistently confirmed that it does. In practice, primary importance is attached to the registered seat of the company whose board the individual serves on. The place where management functions are exercised may be relevant in specific cases, but is generally not decisive for directors’ fees under double tax treaties. The technical payment channel – including scenarios where the parent company pays the manager and subsequently recharges the cost to the Polish subsidiary – is irrelevant to this classification.

Double tax treaties – the directors’ fees article

Where a double tax treaty is in force between Poland and the board member’s country of residence, its provisions must be applied in conjunction with Polish domestic law (Article 4a of the PIT Act). Most treaties concluded by Poland include a “directors’ fees” clause (typically Article 16), which permits the country where the company is established to tax such remuneration, without excluding taxation in the country of residence (subject to double taxation relief mechanisms).

In the context of the April 2025 ruling, the relevant treaty was the Poland-Germany double tax convention of 14 May 2003. Article 16(1) of this treaty grants Poland the right to tax the remuneration of a German resident serving as a board member of a Polish company. This provision operates as a specific provision (lex specialis) in relation to the general employment income rules under Article 15 of the treaty, meaning that the directors’ fees article takes precedence where management board functions are at issue.

The OECD Model Tax Convention Commentary, while not legally binding, serves as an important interpretive tool in this area and is routinely referenced by Polish tax authorities to distinguish management board remuneration from ordinary employment income.

The method for eliminating double taxation – whether by exemption or by tax credit – depends on the relevant treaty and should be verified in each case.

Tax rate – flat 20% on gross income

Once Poland’s taxing right is established, the default rate is set out in Article 29(1)(1) of the PIT Act: a flat-rate withholding tax of 20% on gross income, unless a double tax treaty or specific circumstances justify a different treatment. Unlike the general rules applicable to Polish tax residents, this rate is applied to the gross amount of remuneration, with no deduction for income-earning costs.

The tax is generally final in nature in Poland, although the taxpayer may opt for taxation under general rules in certain cases, and may still have reporting obligations in their country of residence.

Who acts as the withholding agent – the parent or the subsidiary?

In group structures where remuneration is technically paid by the foreign parent and recharged to the Polish subsidiary, it is not immediately obvious which entity bears the withholding obligation. An earlier ruling by the Director of KIS, dated 19 December 2022 (ref. 0112-KDIL2-1.4011.754.2022.1.KF), addressed this question directly.

In the circumstances described in the ruling, the tax authority concluded that the Polish subsidiary – as the entity that ultimately bears the economic cost of the remuneration – acts as the withholding agent within the meaning of Article 41(4) of the PIT Act. The parent company may be treated as an intermediary in such structures, particularly where the costs are fully recharged to the Polish subsidiary. However, this assessment depends on the specific structure and allocation of economic burden within the group, and should not be treated as a universal rule.

Consequences of non-compliance

Failure to fulfil withholding obligations exposes the Polish subsidiary to liability under the Tax Ordinance Act. A withholding agent that fails to collect tax, or collects it in an incorrect amount, is liable with its entire assets for the shortfall, together with late payment interest. In parallel, the board member as taxpayer may also face liability, since the absence of withholding does not extinguish the underlying tax obligation.

For international groups, the practical takeaway is clear: the fact that the seconded individual formally remains employed abroad does not relieve the Polish subsidiary of its fiscal responsibilities. A systematic review of secondment arrangements is essential to identify cases where delegated employees are, in substance, performing management board functions.

Practical checklist for Polish subsidiaries

Based on the rulings discussed above and the applicable provisions, Polish subsidiaries should take the following steps when a foreign employee is seconded to a management board position. First, confirm whether the individual actually performs management functions within the meaning of Polish company law – registration in the National Court Register (KRS) is a strong indicator, although the actual scope of functions performed remains decisive. Second, verify whether a double tax treaty is in force between Poland and the board member’s country of tax residence, and identify the applicable directors’ fees provision. Third, determine whether the Polish entity bears the economic cost of the remuneration – if so, it is likely the entity responsible for withholding the 20% tax. Fourth, obtain a valid certificate of tax residence from the board member, which is a prerequisite for applying treaty provisions. Fifth, consider applying for an individual tax ruling, particularly where the remuneration structure is non-standard.

Separate social security considerations should also be reviewed, as different rules may apply depending on whether the remuneration is based on a formal appointment to the management board or on contractual arrangements such as an employment or service agreement.

Key takeaways

The taxation of foreign board members’ remuneration in Poland is an area where the employment structure and payment mechanics can easily distract from what truly matters: the nature of the functions performed and the seat of the company. The April 2025 ruling confirms that Polish tax authorities apply a substance-over-form approach, looking through contractual arrangements to the economic reality of the situation. Polish subsidiaries that engage foreign nationals in management roles should proactively ensure compliance with their withholding obligations to avoid exposure to tax liability and penalties.

At ATL Law, we regularly advise Polish subsidiaries of international groups on withholding obligations arising from the secondment of foreign employees to management board positions. We help determine whether remuneration is taxable in Poland, identify the applicable tax rate, and establish which entity within the group is responsible for tax collection. If your company uses secondment arrangements or plans to appoint a foreign resident to its management board, we invite you to get in touch.

R&D Tax Relief in Poland

Posted on 25.03.2026 by kancelaria

R&D Tax Relief in Poland: How Employee Costs During Leave and Sick Days Affect Your Deduction – and Why the Rules Just Changed

Poland’s R&D tax relief (ulga B+R) allows businesses to deduct qualified costs from their tax base – on top of recognising them as standard deductible expenses. For foreign investors running innovation-driven operations in Poland, getting employee cost allocation right can make a material difference to the effective tax rate. A landmark ruling by Poland’s Supreme Administrative Court in August 2025 reshaped how the key proportion is calculated, potentially lowering the deduction for some taxpayers. Here is what investors and their CFOs need to know.

Why R&D Tax Relief Matters for Foreign-Owned Operations in Poland

Poland’s R&D incentive is one of the most competitive in Central and Eastern Europe. It allows both CIT and PIT taxpayers to deduct up to 200% of qualifying R&D expenditure (100% as a standard tax-deductible cost plus an additional 100% deduction from the tax base – or 200% for entities holding R&D centre status). For a foreign investor operating through a Polish subsidiary or branch, the relief directly reduces the effective CIT burden, currently set at 19% (or 9% for small taxpayers). The practical impact is significant: every PLN 1 million of properly documented qualified costs generates up to PLN 190,000 in tax savings at the standard rate.

Among the largest categories of qualified costs are employee-related expenses – salaries, bonuses, overtime pay, employer-funded social security contributions, and other statutory entitlements of staff engaged in R&D activities. The legislation references a broad statutory definition of employment income (Article 12(1) of the PIT Act), which covers all monetary payments and in-kind benefits arising from the employment relationship. This inclusive scope is where the complexity begins – and where recent case law has introduced important clarifications.

The Settled Question: Are Salaries During Leave and Sickness Qualified Costs?

For years, the Polish tax authorities took the position that only remuneration for time actually spent on R&D work could qualify for the relief. Under this interpretation, holiday pay, sick pay, and similar statutory entitlements were excluded from the R&D deduction – even though the employee’s primary role was conducting research and development.

This restrictive approach was decisively overturned through a consistent line of Supreme Administrative Court (NSA) rulings between 2021 and 2024, culminating in a General Interpretation issued by the Minister of Finance on 13 February 2024 (ref. DD8.8203.1.2021). The Minister confirmed that remuneration paid during annual leave, sickness, and other justified absences constitutes a qualified cost under the R&D relief, provided the employee is engaged in R&D activities as part of their regular duties.

The legal reasoning is rooted in the statutory cross-reference: Article 18d(2)(1) of the CIT Act defines qualified costs by reference to Article 12(1) of the PIT Act, which encompasses all monetary payments arising from the employment relationship – not merely wages for hours worked. The NSA has consistently held that the concept of “entitlements” (należności) in the R&D provision is broader than “income” (przychody) and cannot be read restrictively to exclude statutory leave-related payments.

In its ruling of 11 April 2024 (case II FSK 1921/23), the NSA examined a company whose R&D employees received, among other things, quarterly and annual bonuses, seniority allowances, overtime supplements, sick pay, sickness benefits, holiday pay equivalents, and retirement severance. The tax authority had excluded holiday supplements, sick pay, and sickness benefits from qualified costs. The Court upheld the lower court’s decision in favour of the taxpayer, reaffirming that all components of employment income – including those paid for periods when the employee does not perform work – fall within the scope of the R&D deduction, subject to the time-based proportion.

A Practical Distinction: Employer-Funded Sick Pay vs. Social Insurance Benefits

While the principle is settled, foreign investors should note an important nuance. Polish labour law distinguishes between two types of sickness-related payments. Sick pay funded by the employer (wynagrodzenie chorobowe, under Article 92 of the Labour Code) covers the first 33 days of incapacity per calendar year (14 days for employees over 50). This is paid directly by the employer and its qualification as an R&D cost is well-established. After this period, the employee receives sickness benefits funded by the Social Insurance Institution (ZUS). Although some NSA rulings have accepted these benefits as part of qualified costs, ZUS-funded benefits are not employer remuneration in the strict sense. This element carries higher risk in a tax audit. The safest categories for the R&D deduction remain holiday pay and employer-funded sick pay.

The 2025 Game-Changer: How “Total Working Time” Is Now Defined

The more consequential development for investors concerns not what qualifies, but how much of it can be deducted. The CIT Act provides that employee-related qualified costs are recognised in proportion to the time the employee devotes to R&D activities relative to their “total working time” (ogólny czas pracy) in a given month. Neither the tax legislation nor the Labour Code defines this term.

Two competing interpretations have coexisted in NSA case law. Under the first – favoured by taxpayers and endorsed by several earlier rulings (e.g. II FSK 1038/19 of 5 February 2021) – “total working time” means the time the employee actually remained at the employer’s disposal, excluding leave and sick days. Under the second, it means the nominal (contractual) working hours for the month, irrespective of actual attendance.

In its ruling of 12 August 2025 (case II FSK 1515/22), the NSA came down firmly in favour of the nominal-hours approach. The Court reasoned that the legislature deliberately chose the phrase “total working time” (ogólny czas pracy) rather than the defined Labour Code term “working time” (czas pracy, Article 128 §1 of the Labour Code). The former echoes the heading of Chapter II of the Labour Code’s working-time division – “Norms and the general working-time dimension” – which refers to the number of hours an employee should work within a settlement period, i.e. the nominal dimension.

The practical consequence is that leave and sick days remain in the denominator of the R&D proportion. This produces a lower deduction than the alternative method, but eliminates irrational outcomes that depend on the calendar placement of an employee’s absence.

Impact on the Numbers: Two Scenarios for Investors

The NSA illustrated the difference with examples that are directly relevant for financial planning. Consider an R&D employee on a full-time contract who devotes half of each working day (4 out of 8 hours) to R&D. Monthly nominal hours: 160. Total monthly employee costs (salary plus employer social security): PLN 10,000.

Scenario A – minimal attendance. The employee works only one day in a month and is on leave for the remainder. Under the actual-hours method, the R&D proportion is 4/8 = 50%, yielding PLN 5,000 of qualified costs. Under the nominal method endorsed by the NSA, the proportion is 4/160 = 2.5%, yielding just PLN 250. The Court noted that the latter figure more accurately reflects the employee’s real R&D engagement that month.

Scenario B – split-month leave. An employee takes four weeks of leave. If the leave falls entirely in August (with July fully worked), both methods yield PLN 5,000 over two months. But if the same leave spans mid-July to mid-August, the actual-hours method doubles the result to PLN 10,000 – a 100% difference driven solely by calendar timing. The nominal method gives PLN 5,000 in both cases. The NSA found the actual-hours method irrational precisely because of this anomaly.

Current Status: Dominant but Not Yet Definitive

Foreign investors and their advisors should be aware that while the nominal-hours approach is the prevailing trend in recent case law (supported by rulings from February 2023 and 2024–2025), it is not yet an absolutely uniform standard. Earlier rulings endorsing the actual-hours method have not been formally overruled in a systemic sense, and the NSA has not issued a binding resolution (uchwała) on this point. Nor has the legislature amended the statute. Until one of these steps occurs, a degree of legal uncertainty persists.

That said, the direction of travel is clear. The August 2025 ruling explicitly disagreed with the earlier line of case law and tax authorities are already citing this newer approach in audit proceedings. Investors relying on the actual-hours method should factor in the risk that this position may be challenged.

Contractors and Freelancers: Similar Rules, Additional Caution

Many foreign-owned R&D operations in Poland engage specialists through civil-law contracts (umowa zlecenia, umowa o dzieło) rather than employment agreements. Article 18d(2)(1a) of the CIT Act extends the R&D relief to payments under such contracts, with the proportion calculated as R&D time relative to total time devoted to performing the contracted service.

The NSA’s August 2025 ruling confirmed that if a contractor’s fee includes compensation for periods of inactivity (e.g. holiday or sickness), those amounts may also qualify. However, there is a critical difference from employment contracts: Polish labour law does not grant statutory leave or sick-pay entitlements to contractors. Any such arrangements must be explicitly stipulated in the civil-law agreement itself. Without clear contractual provisions, tax authorities may challenge the inclusion of “inactivity” payments in the R&D deduction. Investors should ensure that contracts with R&D freelancers are structured with this requirement in mind.

Practical Takeaways for Foreign Investors

Maximise the base, document the proportion. Holiday pay and employer-funded sick pay for R&D staff are qualified costs – confirmed by both the Minister of Finance and consistent NSA case law. Ensure these amounts are captured in your R&D cost calculations. For ZUS-funded sickness benefits, seek an individual tax ruling before including them.

Adopt the nominal-hours proportion. In line with the prevailing judicial trend, calculate the R&D proportion using nominal (contractual) monthly hours as the denominator. This approach is more conservative but significantly reduces audit risk. Be aware that this is the dominant – though not yet definitive – interpretation, and monitor developments for a possible binding NSA resolution or legislative clarification.

Maintain rigorous time-tracking. The R&D relief stands or falls on documentation. Polish tax authorities routinely challenge claims where time records are incomplete or inconsistent. Implement a monthly time-tracking system that clearly distinguishes R&D activities from other work.

Structure contractor agreements carefully. If your Polish operations engage R&D specialists on civil-law contracts, ensure the agreements expressly address compensation during periods of inactivity. Without explicit contractual language, payments for non-working periods risk being excluded from the deduction.

Review your current position. If your Polish subsidiary has been calculating the R&D proportion using actual hours worked (excluding leave and sick days), the August 2025 NSA ruling may affect both past and future filings. Consider whether a voluntary correction or a protective individual tax ruling is appropriate.

Our firm advises foreign investors on the full spectrum of Polish R&D tax incentives – from structuring qualified costs and preparing time-tracking documentation to obtaining individual tax rulings and representing clients in disputes with the tax authorities. If you have questions about your R&D relief position in Poland, we are here to help.

Legal basis and case law

Article 18d(1)–(2) of the Corporate Income Tax Act of 15 February 1992; Article 26e(1)–(2) of the Personal Income Tax Act of 26 July 1991; Article 12(1) of the PIT Act; Articles 80, 92, 128 §1, 129 §1, 171 §1, 172, 188 of the Labour Code of 26 June 1974. General Interpretation of the Minister of Finance of 13 February 2024, ref. DD8.8203.1.2021. Supreme Administrative Court rulings: 12 August 2025 (II FSK 1515/22); 11 April 2024 (II FSK 1921/23); 28 June 2024 (II FSK 218/24); 4 April 2024 (II FSK 1789/23); 8 February 2023 (II FSK 1537/20); 14 February 2024 (II FSK 670/21); 5 February 2021 (II FSK 1038/19).

Legal Due Diligence In Acquisitions

Posted on 23.03.2026 by kancelaria

Key considerations when acquiring shares in a Polish company

A guide for foreign investors | ATL Law 2026

The role of due diligence in M&A transactions

Due diligence constitutes a fundamental stage of any transaction involving the acquisition of shares in a Polish limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o.) or a joint-stock company (spółka akcyjna, S.A.). Its purpose is to comprehensively identify legal, tax, financial and operational risks associated with the target entity, enabling the investor to make an informed investment decision and to appropriately structure the terms of the acquisition agreement.

Polish law does not impose a formal obligation on the parties to a transaction to carry out due diligence. The absence of such an investigation therefore does not constitute a legal obstacle to the valid conclusion of a share purchase agreement. Nevertheless, from the perspective of transaction risk management and the liability of members of the governing bodies of the acquiring company – who, pursuant to Articles 209 and 293 of the Code of Commercial Companies (Kodeks spółek handlowych, KSH), are required to exercise the diligence arising from the professional nature of their activities – the failure to conduct due diligence may be assessed as a breach of the duty of care. It should be noted, however, that the liability of management board members is assessed on a case-by-case basis having regard to the circumstances of the specific transaction – the mere absence of due diligence does not automatically give rise to liability, but may constitute a significant aggravating factor in the event of loss.

For foreign investors who do not possess direct familiarity with the Polish regulatory environment, due diligence additionally serves an educational function – it enables an understanding of the specificities of the Polish legal system, the identification of areas requiring particular attention, and the appropriate planning of the transaction structure and post-transaction integration. This article discusses the key areas of legal due diligence that should be covered when acquiring a Polish capital company, as at the legal status in force in 2026.

Corporate structure and legal standing of the company

Verification of entries in the National Court Register

The starting point for corporate due diligence is the analysis of the current extract from the National Court Register (Krajowy Rejestr Sądowy, KRS), which contains the basic identification data of the company, the composition of its governing bodies, its capital structure and the manner of representation. It should be borne in mind, however, that the KRS does not always reflect the current legal status of the company – this is influenced both by delays in making entries and by the fact that certain changes (e.g. the transfer of shares in a sp. z o.o.) are declaratory in nature, meaning that the legal effectiveness of the change is not conditional upon entry in the register.

The verification should include a comparison of the data disclosed in the KRS with the content of the articles of association (deed of incorporation), the minutes of shareholders’ meetings, the share register or shareholder register, and the documents confirming the appointment of the current members of the management board and supervisory board. Discrepancies between the status disclosed in the KRS and the actual status constitute a warning signal requiring detailed clarification.

Articles of association and internal regulations

The analysis of the articles of association (or the statute, in the case of joint-stock companies) is essential to assess whether the planned transaction can be carried out in the intended manner. In particular, the existence of clauses restricting the transfer of shares should be verified, such as rights of first refusal, pre-emption rights, the requirement to obtain the company’s consent for the transfer of shares (Article 182 KSH), as well as tag-along and drag-along clauses. Such clauses may significantly affect the timetable and mechanics of the transaction.

The investigation should also cover the rules of procedure of the management board and supervisory board, shareholders’ agreements, powers of attorney granted on behalf of the company, and any agreements on the exercise of rights attached to shares, which may create obligations or restrictions not apparent from the articles of association themselves.

Capital structure and history of share transactions

A complete review of the history of changes in the ownership structure of the company allows for the identification of potential defects in the legal title to shares. The analysis should cover the continuity and correctness of all historical share transfer transactions, with particular attention to compliance with the requirements as to the form of the legal act. In the case of a sp. z o.o., the transfer of shares requires written form with notarially certified signatures, under pain of nullity, in accordance with Article 180 KSH. Failure to observe this form results in the absolute nullity of the legal act, which may undermine the legal title of the current seller.

It should also be verified whether the shares are encumbered with a pledge, a registered pledge, usufruct or other third-party rights, and whether they are the subject of court proceedings or security measures.

Real estate and fixed assets

The examination of the legal status of real estate owned by the company or used by it under another legal title constitutes an important element of due diligence, particularly in transactions involving manufacturing, logistics or retail entities. The analysis should cover the land and mortgage registers of the relevant properties, including entries relating to ownership, mortgage encumbrances, easements, third-party claims and the right of perpetual usufruct.

In the context of foreign investors, particular attention should be paid to the provisions of the Act of 24 March 1920 on the Acquisition of Real Estate by Foreigners, which in certain cases requires the obtaining of a permit from the Minister of Internal Affairs for the acquisition of real estate. This obligation also applies to the indirect acquisition of real estate – the acquisition of shares in a company that is the owner or perpetual usufructuary of real estate may require the obtaining of a permit if the acquirer is an entity controlled by a foreigner within the meaning of the Act. Although the Act provides for a number of exemptions from the permit requirement – including, among others, for real estate located within city limits and for entities from the European Economic Area – the scope of these exemptions is limited and subject to significant qualifications, particularly with respect to agricultural and forestry land (additionally regulated by the provisions of the Act on the Shaping of the Agricultural System and the powers of the National Support Centre for Agriculture, KOWR) and companies controlled by foreigners from outside the EEA. In each case, an individual analysis of whether the conditions for the exemption are met is required in the context of the specific transaction and the nature of the property being acquired.

The investigation should also cover the compliance of the manner of use of the real estate with the local zoning plan, planning decisions, building and occupancy permits, as well as the environmental status of the property, including any potential soil contamination.

Contractual obligations and legal disputes

Material commercial agreements

The review of the company’s contractual portfolio focuses on agreements that are material from the perspective of operational continuity or that generate significant financial obligations. In particular, agreements containing change of control clauses should be identified, as these may grant the counterparty the right to terminate or renegotiate the agreement in the event of an acquisition of the company. Such clauses are commonly found in credit agreements, commercial lease agreements, distribution agreements and licence agreements.

The analysis of contracts should also take into account non-compete clauses, exclusivity clauses, most favoured nation obligations, and any guarantees and sureties granted by the company or in its favour.

Court, arbitration and administrative proceedings

The investigation covers the identification and assessment of risks associated with pending court, arbitration and administrative proceedings in which the company is a party or participant. Not only proceedings already commenced are relevant, but also potential claims of which the company is aware – in particular employee claims, consumer claims, claims for infringement of intellectual property rights and contractual damages claims.

For foreign investors, the analysis of proceedings before public administration authorities is also important, including proceedings in the area of construction law, environmental protection, competition law (UOKiK – the Polish Competition Authority) and tax proceedings. Tax liabilities of the company – including tax arrears together with interest – remain the obligations of the company regardless of changes in its ownership structure, which means that the acquirer of shares becomes the owner of an entity burdened with these liabilities. This makes the examination of the company’s tax history a key element of due diligence.

Employment matters and labour law

The examination of employment aspects covers the analysis of the employment structure, the legal forms of engagement (employment contracts, civil law contracts, B2B arrangements), the work regulations and remuneration regulations, collective bargaining agreements and arrangements with trade unions. Particular attention should be paid to obligations arising from post-termination non-compete agreements, confidentiality agreements and incentive programmes (including management options and ESOP share plans), which may generate significant financial liabilities on the part of the company.

In share deal transactions, the acquisition of shares does not constitute a transfer of an undertaking within the meaning of Article 23¹ of the Labour Code – the company remains the employer, and a change of shareholder does not, as a rule, directly affect the employment relationships. Nevertheless, it should be verified whether contracts with key employees contain clauses entitling them to terminate their employment or to receive additional benefits in the event of a change of control over the company (so-called golden parachute clauses).

The correctness of the company’s settlements with the Social Insurance Institution (ZUS) should also be verified, including the timeliness and completeness of insurance registrations and contributions. As the contribution payer, the company bears responsibility for the correct calculation and timely remittance of social security contributions, and arrears may generate significant financial liabilities together with late payment interest and potential penalties. This risk is particularly material for companies that rely on civil law contracts or engage self-employed individuals, as the legal characterisation of such arrangements may be challenged by ZUS.

Tax risks – a critical area of due diligence

Tax due diligence is one of the most important areas of investigation from the investor’s perspective, as the company’s tax liabilities – including tax arrears, late payment interest and potential penalties – remain with the company even after a change in its ownership structure. The analysis should cover at least five years back, taking into account the five-year limitation period for tax liabilities under Article 70 of the Tax Ordinance (Ordynacja podatkowa). It should be noted, however, that the running of the limitation period may be suspended or interrupted in the cases specified in Article 70 §§ 2–8 of the Tax Ordinance – including, among others, where criminal fiscal proceedings are initiated, an appeal is lodged with an administrative court, or security measures are imposed on the taxpayer’s assets – which in practice may significantly extend the period during which tax liabilities remain enforceable.

CIT, VAT and transfer pricing

The investigation covers the analysis of the correctness of corporate income tax (CIT) settlements, including in particular the proper qualification of tax-deductible costs, the application of tax exemptions and reliefs (including the R&D relief and the IP Box preference), foreign exchange differences and the correctness of depreciation and amortisation of fixed assets and intangible assets.

In the area of VAT, the key issues are the correct application of tax rates, the right to deduct input VAT, the timeliness of filing returns and the settlements under the split payment mechanism, which applies on a mandatory basis to transactions covered by Annex 15 to the VAT Act.

For companies operating within international groups, the analysis of transfer pricing documentation is of particular importance. It should be verified whether transactions with related parties have been priced in accordance with the arm’s length principle, whether the required local and group documentation has been prepared (Local File, Master File, TPR information), and whether the company is exposed to the risk of income adjustment by the tax authorities.

Withholding tax and payer obligations

Where the company makes payments to foreign entities in respect of dividends, interest, royalties or intangible services, the correctness of the withholding tax rates applied should be verified, including the proper application of reduced rates under double taxation treaties or EU directives. Particular attention should be paid to verifying compliance with the payer’s duty of care requirements, including the possession of current tax residency certificates. In the case of payments to a single taxpayer exceeding two million PLN in a tax year, the correctness of the application of the pay and refund mechanism should also be analysed. This mechanism requires the payer to withhold tax at the statutory rate on the excess above that threshold, with the possibility of subsequently applying for a refund of the difference – unless the company held a valid opinion on the application of preferences or submitted a payer’s declaration (WH-OSC). Irregularities in this area may give rise to tax arrears together with interest, burdening the company in its capacity as the withholding agent.

Compliance – regulatory conformity and registration obligations

AML/KYC and the Central Register of Beneficial Owners

In the context of M&A transactions, verifying the company’s compliance with anti-money laundering and counter-terrorism financing regulations is of significant importance. It should be verified whether the company has correctly registered its beneficial owners in the Central Register of Beneficial Owners (Centralny Rejestr Beneficjentów Rzeczywistych, CRBR) and whether the data is up to date. The penalty for failure to comply with CRBR obligations may amount to up to one million PLN, which constitutes a material financial risk.

Following the completion of the acquisition, an update of the CRBR entry will be required within fourteen business days from the date of the share acquisition, if the change in ownership affects the status of beneficial owners. It should be noted that a draft amendment to the AML Act remains at the legislative stage, providing for significant changes to the functioning of the CRBR – including restrictions on public access to the register’s data. According to the current version of the draft, these changes would enter into force on 1 July 2026; however, the final form and timing of the implementation depend on the outcome of the legislative process.

Personal data protection (GDPR)

The examination of GDPR compliance covers the analysis of the personal data processing procedures implemented by the company, including the register of processing activities, data processing agreements, privacy policies, mechanisms for the exercise of data subject rights, and any data protection breaches reported to the President of the Personal Data Protection Office (UODO). For companies processing personal data on a large scale or processing special categories of data, GDPR violations may result in administrative fines of up to twenty million euros or four per cent of annual worldwide turnover.

Permits, licences and administrative decisions

It should be verified whether the company holds all the required permits, concessions, licences and registry entries that are prerequisites for conducting business activity in its sector. Particular attention should be paid to decisions that are personal in nature or are linked to a specific location, as a change of ownership may in certain cases require a fresh application for the relevant permit. This applies in particular to decisions in the area of environmental law, pharmaceutical law, energy law and transport regulations.

Intellectual property protection

The review of the company’s intellectual property portfolio covers the analysis of patents, trademarks, industrial designs, copyrights to software and databases, and trade secrets. It is essential to establish whether the company is the actual owner of the rights to its key IP assets, whether those rights are not encumbered in favour of third parties, and whether agreements with employees and subcontractors properly regulate the transfer of copyrights and related rights to the company. For technology companies, this area of due diligence frequently determines the entire transaction value.

Environmental and regulatory aspects

Environmental due diligence is gaining in importance in the context of the growing regulatory requirements related to ESG and the tightening of provisions on liability for environmental contamination. The investigation should cover the analysis of environmental permits held by the company, including emission permits, water law permits, environmental conditions decisions, as well as the history of inspections conducted by the Regional Inspector of Environmental Protection.

With respect to industrial properties, the assessment of the risk of historical soil and groundwater contamination is of particular significance. Liability for the remediation of a contaminated site may rest with the property owner irrespective of who actually caused the contamination, which makes this aspect particularly important in transactions involving post-industrial sites.

The due diligence process and the use of its findings

Organisation of the process and access to information

Legal due diligence is typically carried out on the basis of documentation made available by the company (or the seller) in a virtual data room (VDR). The scope of the documentation to be provided is negotiated between the parties and usually includes corporate documents, commercial agreements, employment documentation, tax documentation, permits and administrative decisions, as well as documentation relating to real estate and intellectual property. Incomplete documentation or delays in its provision by the seller is itself a significant warning signal.

The due diligence report and its impact on the transaction

The findings of the due diligence investigation are presented in a report which identifies the risks detected, classifies them by degree of materiality and sets out recommendations on how to mitigate them. The findings of the report directly influence several key elements of the transaction: the price determination mechanism (including the adjustment of the valuation for identified contingent liabilities), the catalogue of the seller’s representations and warranties, the scope of indemnities, the conditions precedent to closing, and the structure of payment security arrangements (escrow, holdback).

Professionally conducted due diligence enables the informed allocation of transaction risks between the seller and the buyer and constitutes the foundation for the safe conclusion of the acquisition agreement.

Key due diligence areas – comparative overview

Area of investigation	Key issues	Typical risks
Corporate structure	KRS, articles of association, share transaction history, transfer restrictions	Defects in legal title, register discrepancies, non-compliance with form requirements
Real estate	Land registers, building permits, zoning plans, foreigners’ acquisition rules	Mortgage encumbrances, missing permits, soil contamination
Commercial contracts	Material agreements, change of control clauses, guarantees and sureties	Loss of key contracts, hidden liabilities, termination clauses
Legal disputes	Court, arbitration, administrative and tax proceedings	Contingent liabilities, administrative fines, damages claims
Labour law	Employment structure, collective agreements, incentive plans, ZUS	Contribution arrears, golden parachute clauses, employee claims
Tax	CIT, VAT, WHT, transfer pricing, tax reliefs	Tax arrears, income adjustment risk, improper exemptions
Compliance / GDPR	AML/KYC, CRBR, data protection, sector permits	Administrative fines, missing permits, GDPR breaches
Intellectual property	Patents, trademarks, copyrights, trade secrets	No title to key IP, encumbrances, infringement disputes
Environment	Environmental permits, emissions, soil contamination	Remediation liability, missing permits, ESG costs

Summary and practical recommendations

Legal due diligence is an indispensable element of a secure acquisition of a capital company on the Polish market. For foreign investors entering the Polish market – or expanding their presence through acquisition – a professional investigation enables the identification of risks which, under the Polish legal system, may be of a specific nature, different from the experience gained in other jurisdictions.

The scope of due diligence should be tailored in each case to the size, sector and risk profile of the target entity, although irrespective of the specifics of the transaction, the investigation should cover at a minimum the corporate structure and the validity of the title to shares, key contractual obligations and legal disputes, tax risks, employment relations and regulatory compliance in the critical areas of the business.

The proper coordination of legal due diligence with financial and tax due diligence is of particular importance, as many risks are interdisciplinary in nature – requiring simultaneous legal, tax and business analysis for a proper assessment of their impact on the value and security of the transaction. The findings of due diligence form the foundation for the negotiation of the terms of the share purchase agreement, including the system of the seller’s representations and warranties, indemnification mechanisms and conditions to closing. A diligently conducted due diligence investigation, supported by the experience of legal advisors familiar with the specificities of the Polish market, minimises the risk of unforeseen liabilities and enables an informed, secure investment decision.

ABOUT ATL LAW

ATL Law is a law firm specialising in the comprehensive legal services for foreign investors on the Polish market. We provide multilingual advisory services in the areas of corporate law, tax law, transfer pricing, labour law and real estate law. We have extensive experience in conducting legal due diligence for M&A transactions, including the identification of risks specific to the Polish legal system. We support our clients at every stage of the transaction – from the due diligence investigation, through the negotiation of the agreement terms, to closing and post-transaction integration.

CONTACT: office@atl-law.pl

Polish Monitor Sądowy i Gospodarczy: Mandatory Corporate Announcements

Posted on 20.03.202626.03.2026 by kancelaria

What foreign investors and company directors need to know about publication duties under Polish corporate law

Legal status: March 2026

Why This Topic Deserves Your Attention

Running a company in Poland – whether a limited liability company (sp. z o.o.) or a joint-stock company (S.A.) – comes with a set of procedural obligations that have no direct equivalent in many other European jurisdictions. One of the most frequently overlooked is the duty to publish formal announcements in the Monitor Sądowy i Gospodarczy (MSiG), Poland’s official Court and Commercial Gazette.

Missing a required publication does not merely result in an administrative fine. In many cases, it prevents the company from completing the underlying corporate procedure altogether. A liquidation cannot reach the stage of distributing assets to shareholders. A capital reduction cannot take effect. A refund of supplementary contributions to members remains legally blocked. The publication requirement, in other words, is not a formality – it is a gating mechanism built into the procedure itself.

Recent Regulatory Shift: November 2025

Until late November 2025, every entry made in the National Court Register (KRS) was automatically republished in the MSiG. This changed on 29 November 2025, when KRS entries were removed from the Gazette’s scope.

This reform narrowed the content of the MSiG but did not diminish the publication obligations imposed by the Commercial Companies Code (Kodeks spółek handlowych, or K.s.h.). The general rule under Article 5(3) of the K.s.h. remains unchanged: any announcement required by law from a company must be published in the MSiG, unless a specific statute provides otherwise. Additionally, the company’s articles of association may impose supplementary publication requirements through other channels.

Corporate Events That Trigger a Publication Duty

The obligation to publish in the Gazette arises in a number of distinct scenarios under the K.s.h. The following overview focuses on those most commonly encountered in practice.

Capital Reduction

Whenever a limited liability company or a joint-stock company resolves to reduce its share capital, the management board must promptly publish a notice in the MSiG. The purpose of this announcement is to protect creditors: it formally invites them to raise objections (in the case of a sp. z o.o., under Article 264(1) K.s.h.) or to file claims (in the case of an S.A., under Articles 456–457 K.s.h.) within three months of the publication date.

There are limited exceptions. Article 264(2) K.s.h. describes circumstances under which the creditor protection procedure – and therefore the publication requirement – does not apply to a sp. z o.o. These exceptions are narrowly defined and should not be assumed without careful legal analysis.

Liquidation Proceedings

The dissolution and winding-up of a company is arguably the area where MSiG announcements carry the greatest practical weight. The requirements vary significantly depending on the company type.

Company Type	Publication Requirements During Liquidation
Sp. z o.o. (LLC equivalent)	One announcement. Creditors have 3 months to submit claims. Asset distribution to members no earlier than 6 months after publication (Art. 279 and 286(1) K.s.h.).
S.A. (joint-stock company)	Two announcements, spaced no less than 2 weeks and no more than 1 month apart. Creditors have 6 months from the last announcement to submit claims. Asset distribution no earlier than 1 year after the last publication (Art. 465 and 474(1) K.s.h.).
S.K.A. (limited joint-stock partnership)	Same rules as for a joint-stock company, applied by reference (Art. 150 K.s.h.).
P.S.A. (simple joint-stock company)	Exempted from the dual-announcement and one-year waiting period rules. Art. 465 and 474 K.s.h. are explicitly excluded (Art. 300¹²⁰(5) K.s.h.).

The practical consequence of these rules is that a liquidation of a joint-stock company takes at least twelve months from the date of the second MSiG announcement before any surplus assets can be distributed to shareholders. Delays in filing the announcement directly extend the entire timeline.

Refund of Supplementary Contributions

This obligation is specific to limited liability companies whose articles of association provide for supplementary contributions (dopłaty). If the shareholders’ meeting resolves to return these contributions, the actual refund cannot take place until one month after the publication of a notice announcing the intended return (Article 179(2) K.s.h.). The mechanism serves as a buffer, giving creditors an opportunity to react before capital exits the company.

Mergers, Divisions, and Transformations

Any structural reorganisation of a Polish company – whether it involves a merger with another entity, a demerger, or a change of legal form – triggers its own set of announcement requirements under the K.s.h. The relevant provisions are spread across the Code (see, among others, Articles 500(2), 508, 524, 543, 570, and 584¹² K.s.h.) and tend to specify both the content and timing of the required notices.

Acquisition or Loss of a Dominant Position

A less commonly encountered but nonetheless mandatory publication arises when a commercial company acquires or loses a dominant position in a joint-stock company. Article 5(2) and (4) K.s.h. requires that this event be disclosed through an MSiG announcement.

Filing the Announcement: Two Available Channels

Option A: In-Person Submission

Poland maintains a network of 49 designated filing points, located at selected district courts throughout the country. A submission requires completing the MSiG-M1 form, attaching the text of the announcement in both paper and electronic format (USB drive, CD, or email to monitor@ms.gov.pl), and providing proof of payment. A directory of these offices can be found on the Ministry of Justice website.

Option B: Online Filing via the Court Registers Portal

The more efficient route is electronic submission through the Portal Rejestrów Sądowych (PRS). Any user with an existing PRS account – including one originally created for filing KRS applications – can access the MSiG module under the “National Court Register” tab. The announcement text must be uploaded as a file signed with a qualified electronic signature or a trusted profile (ePUAP), together with confirmation of payment.

Publication Costs at a Glance

The fee structure is straightforward and based on character count. Every letter, digit, punctuation mark, and space in the announcement text is counted as one character.

Standard rate: PLN 0.70 per character

Minimum fee: PLN 60 (regardless of announcement length)

Formatting surcharge: +30% if the applicant requests special fonts, underlining, or bold text

Fee cap: The total fee may not exceed 20% of the statutory minimum wage

Payment is made to the bank account of the Ministry of Justice, the details of which are printed on the MSiG-M1 form.

Practical Tips for Drafting the Announcement

Polish law does not prescribe a mandatory template for MSiG announcements. Companies are free to formulate the text in their own words, provided that all elements required by the underlying provision of the K.s.h. are included. Based on market practice, a well-drafted announcement typically contains the following:

the company’s full name (firma), registered office, and KRS number,
a reference to the corporate resolution or event triggering the publication duty,
the statutory deadline for creditor action (objections, claims, or other responses),
the correspondence address for creditor submissions.

Clarity and precision matter. An ambiguously worded announcement may invite disputes over whether the statutory requirements have been properly met – potentially undermining the validity of the entire procedure.

Final Observations

For companies with foreign shareholders or parent entities, the MSiG publication requirement is one of those procedural details that can easily fall through the cracks. It is not flagged by the court register, it does not generate automatic reminders, and its omission only becomes apparent when the company attempts to complete a step that depends on it – often months later.

Incorporating MSiG announcements into the project timeline from the outset – whether the task at hand is a liquidation, a capital reduction, or a corporate reorganisation – is therefore not a matter of regulatory perfectionism. It is a practical necessity that directly affects the speed and legal certainty of the transaction.

Commercial Lease In Poland – Key Contractual Clauses

Posted on 18.03.2026 by kancelaria

The Importance of a Commercial Lease Agreement

A lease agreement for commercial premises or real property is one of the most significant contracts entered into by businesses operating in Poland. For foreign investors entering the Polish market – whether setting up an office, production facility, warehouse or retail unit – the terms of a commercial lease have a direct bearing on operating costs, operational flexibility and the legal stability of their activities.

Polish law does not provide a separate, comprehensive regulatory framework for commercial leasing. The legal basis is found in the Civil Code, which in Articles 659–692 regulates lease relationships in general terms, primarily through default rules that may be modified by contractual agreement. The absence of the protective provisions characteristic of residential tenancy law means that the principle of freedom of contract plays a dominant role in commercial relationships – the parties enjoy broad discretion in shaping the content of their legal relationship.

As a result, the quality and precision of a commercial lease agreement determines the practical allocation of risks between landlord and tenant. Carelessness in negotiating clauses on rent indexation, the scope of fit-out works, termination mechanisms or liability can lead to serious financial consequences, particularly in the case of long-term leases covering substantial floor areas.

This article discusses the key contractual clauses that should feature in every professionally drafted commercial lease agreement governed by Polish law, with particular attention to the perspective of foreign investors and the specific characteristics of the office, retail and logistics and warehouse markets.

Subject Matter of the Lease – Precision of Description as the Foundation of the Agreement

An accurate description of the leased premises is one of the most important elements of any commercial agreement. While this may seem self-evident, it frequently gives rise to disputes in practice, particularly in the case of complex commercial properties where the tenant uses not only a defined area of floor space but also shared infrastructure, car parks, storage areas and external grounds.

Area Description and Measurement

The agreement should unambiguously specify the area being leased and the method used to measure it. The Polish commercial market uses various floor area measurement standards – most commonly the BOMA (Building Owners and Managers Association) standard or the Polish PKRE standard – and the choice of method directly affects the rentable area for which the tenant is charged. The difference between net and gross area, the latter including a share of common parts of the building, can range from a few to over ten percent, which for large premises translates into material differences in monthly rent.

It is advisable for the agreement to include an up-to-date architectural plan of the leased premises with the boundaries of the rented area clearly marked, as well as an explicit indication of which common infrastructure elements (entrance lobbies, lifts, staircases, shared restrooms, car parks) fall within the scope of the agreement and on what terms the tenant is entitled to use them.

Common Areas and Rights to Use Shared Infrastructure

In multi-occupancy properties and office buildings, it is important to define precisely the scope of the tenant’s right to use shared areas and facilities. A properly drafted agreement should specify whether use of car parks, conference rooms, recreational areas or other shared infrastructure is included in the rent or charged separately, and if separately – on what basis.

Lease Term and Termination Provisions

The choice of lease term model is of fundamental importance both for the tenant’s business stability and for the asset value from the landlord’s perspective. The Polish Civil Code distinguishes between fixed-term leases and open-ended leases, each carrying different legal consequences as regards the right to terminate.

Fixed-Term Lease

A fixed-term lease provides both parties with stability – as a rule, neither party may terminate the agreement before the expiry of the term unless the agreement expressly provides for such a right or grounds arise entitling a party to terminate for good cause. From the tenant’s perspective, a long-term agreement guarantees locational stability and allows for the amortisation of capital expenditure incurred in fitting out the premises. The landlord, in turn, obtains predictable rental income, which is particularly significant from the perspective of mortgage financing of the property.

It is worth noting that under Article 661 § 1 of the Civil Code, a lease of real property concluded for a period exceeding ten years is deemed, upon expiry of that period, to have been concluded for an indefinite term. For agreements concluded between entrepreneurs – which is the rule in commercial leasing – this limit is thirty years, creating scope for long-term lease structures in the logistics and industrial sector.

Break Option Clauses

A break option clause, enabling one or both parties to terminate the agreement early, is an important negotiating tool, particularly from the perspective of tenants planning dynamic growth or business restructuring. Such clauses should precisely specify the date on which the right to terminate may be exercised, the required notice period (typically six to twelve months), any financial conditions attaching to the exercise of the break option (an early exit fee – break penalty) and the scope of obligations to restore the premises to their original condition.

Market practice has produced various models for structuring break options – from unilateral clauses (in favour of the tenant or the landlord alone) to mutual clauses, and from unconditional clauses to clauses conditional upon the satisfaction of specified requirements. Each model carries different negotiating and financial consequences requiring careful analysis in the context of each individual transaction.

Automatic Renewal Clauses

Many commercial agreements include an automatic renewal clause providing that, in the absence of notice given within a specified period before the expiry of the agreement, the lease automatically renews for a further fixed or indefinite period. Such clauses require particular attention from the tenant, as failure to give timely notice may result in an unintended commitment to a further multi-year lease obligation.

Rent, Indexation and Service Charges

The financial structure of a commercial lease agreement extends well beyond setting a base rent. In practice, tenants bear a range of additional financial obligations which, depending on how they are structured in the agreement, may materially increase the total cost of occupation relative to the nominally agreed rate.

Currency and Rent Rate

Rent for commercial premises in Poland may be denominated in Polish zloty or, particularly in the Class A office segment and the warehouse market, in euro. Denominating rent in a foreign currency while generating revenues in zloty creates currency risk for the tenant, which should be consciously factored into financial projections. Conversion of rent to zloty for payment purposes is typically made at the NBP exchange rate on the due date or at a rate agreed in the agreement.

Indexation Mechanism – HICP or CPI

Indexation clauses are one of the key elements of long-term commercial lease agreements. Their normative basis is provided by Article 358¹ § 2 of the Civil Code, which expressly permits a contractual stipulation that the amount of a monetary obligation is to be determined by reference to a measure of value other than money. The most commonly used mechanism is the indexation of rent to the HICP (Harmonised Index of Consumer Prices) published by Eurostat for the eurozone, or to the CPI published by the Central Statistical Office (GUS). In euro-denominated agreements, indexation to HICP is the market standard, while CPI is typically used in zloty-denominated agreements.

When negotiating indexation clauses, it is important to agree on several parameters: the base period to which the change in the index is referenced, the minimum threshold of change that justifies a rent adjustment, any cap on the increase in rent in a single cycle and the rounding method for the calculated amount. In conditions of elevated inflation, which the Polish economy has experienced in recent years, indexation clauses that contain no limiting mechanisms can lead to very substantial rent increases, which should be reflected in long-term financial projections.

Service Charges

Service charges – often referred to as service charge or operational costs – are a separate category of costs, customarily levied in addition to base rent. They cover costs associated with the maintenance and management of common areas, including energy costs in shared parts, cleaning, security, building management, building insurance, real property tax and a maintenance fund. The structure and level of these charges can vary significantly depending on the property and the standard of management.

A professionally drafted lease should contain a detailed schedule of the costs comprising the service charge, a mechanism for calculating and verifying their amount, and the tenant’s right to audit the underlying cost documentation. Clauses that allow the landlord unilaterally to expand the catalogue of costs rechargeable to the tenant should be treated with considerable caution.

Rent-Free Period and Tenant Incentives

During the commercialisation of new properties or in the course of negotiations with key tenants, the market has developed a range of financial instruments collectively referred to as tenant incentives. These include a rent-free period, being a period following handover of the premises during which the tenant is released from the obligation to pay rent or pays it at a reduced rate, a fit-out contribution by the landlord and reimbursement of relocation costs from the previous premises. The terms and scope of incentives are confidential and subject to individual negotiation, the outcome of which depends on market conditions, the tenant’s financial standing and its strategic importance to the property owner.

Fit-Out Works and Adaptation of the Premises

Fit-out works – the adaptation of the leased premises to the tenant’s individual requirements – represent one of the more complex aspects of commercial lease agreements, particularly in the case of large office and retail premises. Precise contractual regulation of this matter protects the interests of both parties and prevents costly disputes at the stage of handover or return of the premises.

Scope and Financing of Works

The agreement should unambiguously determine the technical condition in which the landlord delivers the premises to the tenant, and which party is responsible for the works necessary to bring the premises to a state ready for occupation. In the office market, several delivery standards are recognised: shell and core, developer finish, turnkey and plug and play.

Where the tenant carries out the fit-out works, the agreement should specify the requirements for obtaining the landlord’s consent to the design and contractor, the technical standards to which the works must conform, insurance obligations during construction, the method of financing and the terms for accounting for any financial contribution by the landlord. All works should be preceded by the preparation of detailed technical designs approved by both parties, which form an integral part of the agreement.

Condition of the Premises upon Return

One of the most frequent sources of disputes at the end of a commercial lease is the divergent expectations of the parties as to the condition in which the premises should be returned. The agreement should expressly determine whether the tenant is obliged to restore the premises to their original condition (stripping out the fit-out and removing all alterations), or whether the landlord accepts the premises together with the improvements made by the tenant – and if so, whether compensation is payable. In practice, clauses giving the landlord the right to choose between requiring reinstatement and retaining the improvements without any obligation to compensate the tenant are increasingly common.

Financial Security

Securing the landlord’s claims under a lease agreement is a matter requiring particular attention during contract negotiations. The security package should be balanced – on the one hand proportionate to the credit risk borne by the landlord, on the other sufficiently moderate so as not to impair the tenant’s liquidity.

Cash Deposit

The simplest form of security is a cash deposit, typically equivalent to one to three months’ gross rent. The deposit is paid by the tenant to the landlord at the time the agreement is concluded or the premises are handed over, and is held by the landlord throughout the lease term. The agreement should precisely specify the grounds and procedure for applying the deposit against the tenant’s arrears, as well as the deadline for its return after the lease ends (standardly within thirty or sixty days of the return of the premises and completion of its handover protocol).

Bank or Insurance Guarantee

An alternative to a cash deposit – or a supplement to it, used where the tenant’s credit risk is higher – is a bank or insurance guarantee. A demand guarantee (autonomous guarantee) entitles the landlord to receive payment on the basis of a demand alone, without the need to establish the merits of the claim in legal proceedings, making it a particularly effective security instrument from the landlord’s perspective. When negotiating this instrument, the tenant should ensure that the substantive conditions entitling the landlord to make a demand are defined precisely, and that a protective mechanism against abuse of the guarantee is in place.

Declaration of Submission to Enforcement

A widely used mechanism in Polish market practice is the tenant’s declaration of voluntary submission to enforcement, given by notarial deed under Article 777 § 1 points 4 or 5 of the Code of Civil Procedure. This instrument enables the landlord to conduct enforcement proceedings through a bailiff without the need for court proceedings, materially shortening the time and reducing the cost of recovering amounts due. The scope of obligations covered by the declaration and the maximum enforcement amount should be subject to negotiation, as an excessively broad declaration may create unacceptable risk for the tenant.

Subletting, Assignment and Change of Use

Restrictions on Subletting

The Civil Code provides in Article 668 that the tenant may sublet the premises or make them available for use by third parties free of charge only with the landlord’s consent, unless the agreement provides otherwise. In a typical commercial agreement, the subletting clause usually contains a prohibition on subletting without prior written consent of the landlord, or permits subletting only to entities affiliated with the tenant (companies within the same corporate group). For foreign investors planning flexible management of premises within their group, it is important to negotiate the right to sublet to affiliated entities without the need to obtain the landlord’s consent on each occasion.

Assignment of the Agreement

The assignment of rights and transfer of obligations under a lease to another entity (for example as a result of a group reorganisation, an M&A transaction or a change in location strategy) requires the landlord’s consent as a general rule. The agreement should specify the conditions on which such consent may be granted and any creditworthiness requirements applicable to the entity assuming the lease. Clauses providing for an absolute prohibition on assignment or an unlimited right of refusal by the landlord should be assessed critically from the perspective of future operational flexibility.

Change of Use

The agreement should clearly define the permissible scope of the tenant’s activities in the premises, as conducting activities inconsistent with the permitted use may constitute grounds for termination by the landlord. Precise specification of the permitted use is particularly important in the case of retail premises in shopping centres, where the tenant mix is managed by the property owner and a change in the tenant’s business profile may breach the landlord’s obligations to other tenants.

Liability, Insurance and Risk Management

Landlord’s Liability for Technical Condition

The landlord is obliged to deliver the premises to the tenant in a condition fit for the agreed use and to maintain them in that condition for the entire duration of the lease, as provided directly by Article 662 of the Civil Code. Commercial lease agreements typically define in detail the division of maintenance obligations between the parties, distinguishing between repairs to building infrastructure and main installations (falling on the landlord) and day-to-day maintenance and minor repairs within the premises (falling on the tenant).

An important issue is liability for failures of shared building installations affecting the tenant’s ability to use the premises. The statutory basis for claims to a reduction in rent is Article 664 of the Civil Code, which entitles the tenant to demand an appropriate reduction in rent for the period during which defects limit the suitability of the premises for their agreed use. In the event of a complete inability to use the premises for reasons attributable to the landlord, the tenant may additionally claim suspension of the rent payment obligation. A carefully drafted agreement should specify the procedure for reporting such events and provide for compensatory mechanisms going beyond the statutory minimum.

Insurance Obligations

The division of insurance obligations between landlord and tenant requires precise contractual regulation. As a rule, the landlord insures the building against construction and fire risks, while the tenant is required to insure its fit-out, its own capital expenditure on adaptation works and, frequently, third-party liability in connection with its business activities. The agreement should specify the minimum scope of insurance cover required of the tenant, the obligation to notify the landlord of the conclusion and renewal of insurance policies, and the consequences of the expiry of insurance cover.

Force Majeure

The force majeure clause should define the events recognised as force majeure, their impact on each party’s obligations, and the notification and damage-mitigation procedure. The COVID-19 pandemic underscored the importance of precise force majeure clauses in commercial lease agreements, particularly in the context of the mandatory restriction of business activities under administrative regulations. It must be emphasised, however, that the case law developed after 2020 took a restrictive approach in this area: the pandemic itself, and the administrative restrictions on business activities resulting from it, do not automatically release the tenant from the obligation to pay rent. Courts consistently held that the premises remained delivered and physically accessible, and that the commercial risk arising from the inability to conduct business falls, as a general rule, on the tenant. This makes it all the more important to negotiate an express contractual clause governing the allocation of risk in the event of an administrative prohibition or material restriction on the use of the premises.

Perspective of Foreign Investors

Foreign investors entering into commercial lease agreements in Poland encounter a number of specific issues, awareness of which is essential for effective management of transactional risk.

Form of Agreement and Notarial Requirements

Lease agreements for real property concluded for a fixed term exceeding one year should be made in writing, failing which the agreement is deemed to have been concluded for an indefinite term. Written form is therefore mandatory for all long-term commercial agreements. Registration of a lease agreement in the land and mortgage register is possible and desirable from the tenant’s perspective – a lease registered in the land and mortgage register is effective against a purchaser of the property, protecting the tenant in the event of a change of ownership of the building.

Real Property Tax and VAT

Commercial lease rent is, as a general rule, subject to value added tax at the standard rate of twenty-three percent. Tenants who are VAT taxpayers may deduct input tax on rent to the extent that the premises are used for taxable activities. Service charges are subject to the same tax treatment. Real property tax varies depending on the type of premises and the municipality – it is typically included in the service charge or recharged by the landlord to the tenant.

Dispute Resolution and Jurisdiction

The standard in agreements involving foreign entities is a clause choosing Polish law as the governing law and designating a Polish court as the competent forum for dispute resolution. An alternative is arbitration – whether before Polish arbitration courts (the Court of Arbitration at the Polish Chamber of Commerce) or before foreign arbitration courts or internationally recognised arbitration institutions. Arbitration may be appropriate in the case of complex, high-value transactions where the parties value the confidentiality of proceedings and procedural flexibility.

Real Property Due Diligence

Before entering into a long-term lease, particularly one covering large areas or strategic locations, foreign investors should carry out legal due diligence of the property, covering an examination of the legal title as disclosed in the land and mortgage register, verification of the landlord’s right to dispose of the property (freehold or perpetual usufruct), analysis of mortgage encumbrances and easements, verification of administrative decisions governing the permitted use of the building and analysis of any existing lease agreements covering the same premises.

Conclusions and Practical Recommendations

Negotiating and entering into commercial lease agreements in Poland requires a comprehensive legal approach that takes into account both the provisions of the Civil Code and the specific characteristics of the commercial real estate market and the individual risk profile of the tenant. The most important recommendations for foreign investors may be summarised in a few key principles.

Precision in describing the subject matter of the lease and all obligations of the parties is a prerequisite for the safe performance of the agreement – interpretative ambiguities are invariably more costly than the time spent on clarification during the negotiation stage. Indexation clauses and service charges should be negotiated with reference to long-term financial projections, since it is precisely these elements – rather than the base rent rate – that most frequently generate unforeseen costs. The scope of security must be proportionate to the actual credit risk and should not unduly burden the tenant’s liquidity.

From a risk management perspective, it is particularly important to regulate precisely the issues of fit-out works and the condition of the premises upon return, clauses on subletting and assignment, and compensatory mechanisms in the event of the inability to use the premises. For entities within corporate groups, ensuring operational flexibility in the context of internal reorganisations without requiring the landlord’s consent for each transaction is critical.

Effective legal protection of the tenant requires the support of a legal adviser with specialist knowledge of Polish commercial real estate law and transactional experience in the local market. Experience in working with foreign investors translates into the ability to identify risks specific to the Polish legal order which standard contractual templates used by foreign clients may not address.

ABOUT ATL LAW

ATL Law is a law firm specialising in comprehensive legal services for foreign investors on the Polish market. We provide multilingual advisory services in the areas of real estate law, tax law, corporate law and employment law. We have extensive experience in negotiating and reviewing commercial lease agreements, real property due diligence and structuring transactions in the office, retail and logistics markets. We support our clients at every stage of the leasing process – from reviewing offer terms and negotiating agreements through to resolving disputes arising during the lease relationship.

Contact: office@atl-law.pl

Central Register Of Beneficial Owners (CRBR)

Posted on 13.03.202613.03.2026 by kancelaria

Purpose and Significance of the CRBR

The Central Register of Beneficial Owners, commonly referred to by its Polish acronym CRBR, is a public register maintained by the Minister of Finance with the aim of enhancing transparency in ownership structures of entities operating in Poland. The register collects information on the natural persons exercising direct or indirect control over entities required to register, enabling law enforcement authorities, financial institutions and the general public to identify the true beneficial owners of corporate structures.

The legal basis for the CRBR is the Act of 1 March 2018 on Counteracting Money Laundering and the Financing of Terrorism (the AML Act), implementing EU anti-money laundering directives – in particular the Fourth and Fifth AML Directives. The registration obligations are contained primarily in Chapter 6 of the AML Act (Articles 55–72), and their violation is subject to severe administrative sanctions. It is worth noting that the CRBR obligations have been amended on several occasions – most significantly in connection with the implementation of Directive 2018/843 (Fifth AML) and subsequent changes concerning family foundations – and that interpretative practice has been shaped not only by the literal wording of the AML Act but also by communications issued by the Ministry of Finance and the General Inspector of Financial Information (GIIF).

From the perspective of foreign investors entering the Polish market, the question of CRBR registration has immediate practical importance at the stage of incorporating a company. Unfamiliarity with the applicable rules or their misapplication can result in financial penalties as well as complications in dealings with obliged entities – banks, trust service providers and notaries – which are legally required to verify the beneficial ownership status of their clients before establishing a business relationship.

Entities Required to Register

The AML Act provides a precise and exhaustive list of entities required to report information on their beneficial owners to the CRBR. While the list is closed in nature, it covers a wide range of legal forms used to conduct business in Poland.

Commercial Law Companies

The largest category of obliged entities comprises commercial law companies. The registration obligation applies to: general partnerships (spółka jawna), limited partnerships (spółka komandytowa), limited joint-stock partnerships (spółka komandytowo-akcyjna), limited liability companies (spółka z ograniczoną odpowiedzialnością), simple joint-stock companies (prosta spółka akcyjna) and joint-stock companies (spółka akcyjna) – with the exception of joint-stock companies and limited joint-stock partnerships whose shares are admitted to trading on a regulated market subject to disclosure requirements under EU law or equivalent provisions of third-country law. The exclusion of listed companies is justified by the fact that they are already subject to separate and extensive disclosure obligations under capital market regulations. The registration obligation also applies to professional partnerships (spółka partnerska), European economic interest groupings and European companies (Societas Europaea).

Other Entities Subject to Registration

Beyond commercial companies, the obligation to register in the CRBR also applies to: cooperatives (with the exception of European cooperatives), associations required to be entered in the National Court Register (KRS), foundations, investment funds, alternative investment companies, and trusts whose trustees or persons holding equivalent positions are resident or domiciled in Poland or enter into business relationships or acquire real estate in Poland. The applicability of CRBR obligations to trusts should be assessed on a case-by-case basis, as the relevant statutory conditions require careful analysis – not every trust with a connection to Poland will automatically fall within the scope of the obligation.

In the context of corporate activities, it is worth highlighting that the obligation also covers family foundations operating under the Act of 26 January 2023 on Family Foundations. Family foundations, as a relatively new instrument for succession planning and wealth management in Poland, are subject to specific beneficial ownership disclosure requirements that warrant separate analysis in each individual case.

Definition of Beneficial Owner

Correctly identifying the beneficial owner is the most critical – and most frequently problematic – element of complying with the obligations under the AML Act. The definition set out in Article 2(2)(1) of the AML Act describes a beneficial owner as the natural person or persons who exercise direct or indirect control over the client through powers resulting from legal or factual circumstances that enable decisive influence over the activities or actions undertaken by the client, or the natural person or persons on whose behalf a business relationship is established or an occasional transaction is carried out.

Identification Criteria for Legal Entities and Companies

In relation to legal persons and unincorporated organisational units, the AML Act identifies the following criteria for determining beneficial ownership. A beneficial owner is primarily a natural person holding, directly or indirectly, more than 25% of the total number of shares or voting rights in a company, or exercising control through the exclusive right to appoint or remove the majority of members of the management or supervisory bodies, or holding other rights enabling decisive influence over the entity’s activities.

Calculating ownership thresholds in multi-tier structures (parent – subsidiary – sub-subsidiary) requires analysis of both direct and indirect ownership links. If Company A holds 60% of the shares in Company B, and Company B holds 50% of the shares in Company C, Company A indirectly holds 30% of the shares in Company C – which exceeds the 25% threshold and will, as a rule, result in Company A being regarded as the beneficial owner of Company C, unless circumstances excluding such qualification are present. Assessing ownership structures in complex corporate groups invariably requires individual analysis taking into account the full range of ownership links and corporate rights.

The Fall-Back Rule – Senior Managing Official

The AML Act provides for a so-called fall-back rule: where, after exhausting all available means and provided there are no grounds for suspicion, it is not possible to identify any natural person as a beneficial owner under the criteria above, or where there is doubt as to the identity of such a person, a natural person holding a senior managing position is deemed to be the beneficial owner. In practice, this means that where beneficial ownership cannot be established on the basis of the ownership structure, the data of a management board member or other person exercising effective operational control over the entity is disclosed in the CRBR.

The fall-back rule should be treated as a measure of last resort, requiring careful documentation of the identification process and a reasoned explanation of why it was impossible to identify a beneficial owner under the primary criteria. Supervisory and tax authorities may verify the appropriateness of its application, and its misuse to conceal the actual ownership structure may give rise to criminal liability under general criminal law provisions.

Filing Deadlines and Registration Procedure

Initial Registration Deadline

Newly established entities are required to make their first entry in the CRBR within 7 days of registration in the National Court Register (KRS). This deadline applies both to newly incorporated companies and to entities acquiring the status of an obliged entity through transformation, merger or demerger. For foreign investors establishing special purpose vehicles or holding companies in Poland, this means that the beneficial owners must be identified and disclosed immediately upon the company’s entry in the KRS, making it necessary to prepare the relevant ownership structure analysis at the planning stage of the investment.

Filings are made exclusively in electronic form through the IT system available at crbr.podatki.gov.pl. Registration is free of charge. The technical prerequisite for a valid filing is that the person making the entry holds a qualified electronic signature or a signature confirmed by a trusted profile (ePUAP). Only persons authorised to represent the entity in accordance with the representation rules set out in the articles of association and disclosed in the KRS are entitled to submit a filing. The ability to grant a power of attorney for CRBR filings is limited in practice – law firms and tax advisers therefore typically act in a supporting capacity only, assisting with the preparation of documentation rather than filing directly.

Scope of Information to be Disclosed

The filing to the CRBR must include the following information about the beneficial owner: first and last name, nationality, country of residence, PESEL number (if the beneficial owner is registered in the Polish population records system) or date of birth (for persons without a PESEL number), as well as information on the size and nature of the interest or rights held by the beneficial owner. These data are publicly accessible in the CRBR system without the need for registration or payment of any fees.

It is worth noting in this context that the judgment of the Court of Justice of the EU of 22 November 2022 in Cases C-37/20 and C-601/20 called into question the unrestricted public accessibility of beneficial ownership registers as a disproportionate interference with fundamental rights, prompting a number of EU member states to restrict access to their registers. Poland has maintained its broad public access model for the CRBR; however, this issue may generate questions from foreign investors accustomed to the more restrictive approaches adopted in other member states. The disclosure of the PESEL number raises certain data protection concerns in practice; however, this obligation follows directly from statute and the processing of personal data contained in the CRBR is carried out on the basis of Article 6(1)(c) GDPR (compliance with a legal obligation), which precludes reliance on the right to object to processing under Article 21 GDPR.

Obligation to Update Information

The CRBR registration obligation is ongoing in nature – obliged entities must continuously update information on their beneficial owners whenever there is any change to the data subject to disclosure. The deadline for making an update is 14 days from the date on which the change occurs. This deadline runs from the date of the actual change, not from the date on which it is reflected in the KRS or any other public register.

The update obligation applies both to changes in the ownership structure that result in a change of the beneficial owner’s identity, and to changes in the personal data of the beneficial owner already disclosed, including in particular: acquisition or disposal of shares exceeding the ownership thresholds that determine beneficial owner status, change of the beneficial owner’s country of residence, and change of the entity’s name or business activity. In corporate groups where share transactions or restructurings occur frequently, it is essential to implement internal procedures for monitoring changes that affect the beneficial ownership structure across all entities within the group that are subject to the Polish registration obligation.

It bears emphasis that failure to meet the update deadline constitutes an independent violation of the AML Act – even where the change of beneficial owner is legally effective and reflected in the KRS – and may result in the imposition of an administrative penalty. Monitoring of ownership changes should therefore be integrated with the compliance procedures applied by the entity’s legal department or external advisers.

Sanctions for Non-Compliance

Administrative Fines Imposed on the Entity

The AML Act provides for severe sanctions for failure to comply with CRBR registration obligations. An entity that fails to submit or update the required information within the prescribed deadline may be subject to an administrative fine of up to PLN 1,000,000. This fine is imposed by the Minister of Finance under administrative procedure rules. Administrative liability is, as a rule, objective in character; however, the authority takes into account the specific circumstances of each case – including the duration and cause of the violation, the entity’s cooperation with the authority and any remedial action taken – and case law consistently emphasises the principle of proportionality and the individualisation of sanctions.

In practice, fines at the maximum level are imposed primarily in cases of prolonged failure to act or deliberate obstruction of the identification of the beneficial owner. Nevertheless, the risk of a sanction is real even in cases of unintentional violations arising from a lack of awareness of the obligation or from changes in the ownership structure that have not been reflected in the register.

Beneficial Owner’s Liability for Providing False Information

Independently of the sanctions imposed on the obliged entity, the AML Act provides for the beneficial owner’s own liability for submitting false or inaccurate information in the filing. A beneficial owner who prevents or obstructs the identification of his or her person or provides information inconsistent with the facts is subject to criminal liability under general criminal law provisions, including provisions on making false statements or obstructing proceedings. It is worth noting that the AML Act imposes on the beneficial owner an obligation to provide the obliged entity with all information necessary for making a correct entry or update, and that refusal to cooperate or the provision of false data may itself give rise to liability under the applicable criminal law.

Perspective of Foreign Investors

Polish Companies with Foreign Shareholders

Foreign investors establishing companies in Poland or acquiring shares in Polish entities become obliged entities subject to CRBR registration as soon as the registration obligation arises. In holding structures where a Polish company is controlled by a foreign parent, it is necessary to trace the full ownership chain down to the level of the natural person exercising control. The fact that the direct shareholder of a Polish company is a foreign entity – such as a holding company incorporated in the Netherlands, Luxembourg or Cyprus – does not exempt the group from the obligation to identify and disclose the ultimate beneficial owner who is a natural person.

In due diligence and registration processes for multi-tier groups, it is necessary to gather documentation confirming the ownership structure at each level, including: extracts from foreign commercial registers, lists of shareholders or members, excerpts from shareholder agreements, constitutional documents or trust deeds, and – where necessary – declarations from intermediate entities confirming the absence of further controlling persons. This documentation should be drawn up or translated into Polish or English and retained by the entity as evidence of the identification process carried out.

Branches of Foreign Entrepreneurs

Foreign entrepreneurs conducting business in Poland through a branch (within the meaning of the Act of 6 March 2018 on the Principles of Participation of Foreign Entrepreneurs and Other Foreign Persons in Economic Turnover in the Territory of the Republic of Poland) are not, as a rule, separate legal entities under Polish law and do not bear the registration obligation in the CRBR as independent obliged entities. A branch constitutes an organisationally and financially separate form of business activity but lacks legal personality; accordingly, the registration obligation rests on the foreign parent company – provided that the parent falls within the scope of the applicable provisions. Nevertheless, each specific case should be assessed individually to verify whether the branch or its activities trigger any obligations under separate provisions, for example those relating to trusts.

Verification of the CRBR by Obliged Institutions

From an operational perspective, it is important for foreign investors to be aware that Polish obliged institutions – banks, notaries, law firms and tax advisers – are legally required to verify the data contained in the CRBR as part of their Customer Due Diligence (CDD) procedures. Any inconsistency between the data disclosed in the CRBR and the information provided to the obliged institution may result in refusal to establish a business relationship or require the application of Enhanced Due Diligence (EDD) measures. In extreme cases – particularly where an entity is not registered in the CRBR despite meeting the conditions for the registration obligation – the obliged institution has the right to refuse to enter into an agreement or execute a transaction and to report its suspicions to the General Inspector of Financial Information (GIIF).

For entities in the banking and financial sector that themselves hold the status of obliged institutions, verification of the CRBR constitutes a mandatory element of AML/KYC procedures. Foreign companies entering the Polish market as shareholders or counterparties of regulated entities should therefore ensure that their beneficial owners are correctly and timely disclosed in the CRBR, treating this as an essential prerequisite for the smooth conduct of business in Poland.

Summary and Practical Recommendations

The obligation to register beneficial owners in the CRBR is one of the key compliance requirements for entities conducting business in Poland. Failure to comply exposes the entity to substantial financial penalties and disruptions in its dealings with financial institutions and regulatory authorities. Effective fulfilment of the registration obligation requires three fundamental actions.

First, a proper and documented process of identifying the beneficial owner, encompassing an analysis of the entire ownership structure down to the level of natural persons, taking into account both ownership thresholds and corporate rights. In the case of complex holding structures, it is necessary to collect documentation from foreign entities in the ownership chain.

Second, timely registration in the CRBR within 7 days of the entity’s registration in the KRS, together with ongoing monitoring of ownership changes and prompt updating of the data within 7 days of each change. The implementation of internal change-monitoring procedures is particularly important in rapidly evolving corporate groups.

Third, integration of the obligations arising from the AML Act with the entity’s other compliance procedures – in particular its AML/KYC policy, due diligence procedures in M&A transactions and transfer pricing documentation for controlled transactions. The consistency and completeness of internal documentation is the cornerstone of an effective defence in audit proceedings.

ATL Law provides comprehensive legal and advisory support in identifying beneficial owners, making filings and updates in the CRBR, and implementing compliance procedures tailored to the specific needs of foreign investors operating on the Polish market.

ABOUT ATL LAW

ATL Law is a law firm specialising in comprehensive legal services for foreign investors in the Polish market. We offer multilingual advisory services in the areas of tax law, corporate law, transfer pricing, employment law, and AML/KYC and compliance regulations. We have extensive experience in implementing beneficial owner identification procedures, CRBR registrations and AML compliance audits. We support our clients at every stage of entering the Polish market – from selecting the optimal legal structure, through ongoing compliance services, to representation in administrative and court proceedings.

office@atl-law.pl

Posting Workers to Poland – Employer Obligations in 2026

Posted on 11.03.2026 by kancelaria

Posted Workers as Part of an Internationalisation Strategy

The posting of workers to Poland by foreign employers has become an increasingly significant aspect of the integrated European labour market. The applicable Polish legal framework, rooted in Directive 96/71/EC on the posting of workers in the framework of the provision of services and its successor Directive 2018/957/EU on equal remuneration, establishes a comprehensive set of obligations incumbent upon both foreign employers posting workers to Poland and Polish entities sending employees abroad.

For any foreign employer providing services on Polish territory or carrying out specific contracts here, familiarity with Poland’s posting-of-workers regulations is not merely a matter of compliance best practice — it is a prerequisite for avoiding serious financial and legal consequences. Poland’s National Labour Inspectorate (Panstwowa Inspekcja Pracy, PIP) actively enforces these rules and imposes financial penalties for breaches of notification, documentation, and remuneration obligations.

This article offers a comprehensive overview of the legal framework governing the posting of workers to Poland, focusing on the obligations of the posting employer, the employment conditions guaranteed to posted workers, the minimum wage requirements, working time record-keeping obligations, and the consequences of non-compliance — with particular emphasis on the perspective of foreign investors.

Legal Basis and Personal Scope of the Regulations

National Implementation of EU Directives

The Polish rules governing the posting of workers are set out primarily in the Act of 10 June 2016 on the Posting of Workers in the Framework of the Provision of Services (Journal of Laws 2023, item 1523, as amended). This Act implements both the original Directive 96/71/EC and the amending Directive 2018/957/EU, with the changes resulting from the latter entering into force in Poland on 30 July 2020. In addition to the Posting Act, the Labour Code, the Act on Employment Promotion and Labour Market Institutions, and social insurance legislation are all relevant to the practical operation of any posting arrangement.

The Act covers three principal forms of posting. The first is the secondment of a worker to Poland by a foreign employer in order to perform a contract concluded between that employer and a service recipient established or carrying on business in Poland. The second form involves the posting of a worker by a temporary employment agency or personnel agency established abroad to an entrepreneur or user employer carrying on business in Poland. The third form — of growing practical importance within corporate groups — consists of the posting of a worker by a foreign employer to an affiliated entity or branch located in Poland.

Definition of a Posted Worker and Exclusions

A posted worker within the meaning of the Act is an employee employed by an employer established or carrying on business abroad who is directed to carry out work on Polish territory for a limited period of time. The temporary nature of the work is a key condition — the posted worker’s work in Poland must be transient in character and must not amount to a permanent transfer of the worker’s centre of professional activity to Poland. Assessment of this condition requires an analysis of all the circumstances, including the anticipated duration of the posting, its nature, and the actual place where work is performed.

The regulations provide for a material change in the applicable rules once the threshold of 12 months of posting has been reached (extendable to 18 months upon submission of a reasoned notification). Beyond this period, posted workers become entitled to virtually all employment conditions under Polish labour law, not merely minimum conditions. The employer is therefore required to provide a fuller package of employment entitlements, which significantly increases the cost of long-term posting arrangements.

The Act excludes certain categories from its scope. Seafaring personnel employed by merchant fleet enterprises, workers of enterprises belonging to groups of companies under the provisions on the protection of employees’ claims in the event of the employer’s insolvency, as well as situations where posting is connected exclusively with the movement of goods or the assembly of technical equipment in specific defined circumstances, are subject to separate rules or are excluded from the full scope of the Act.

Employment Conditions Guaranteed to Posted Workers

Catalogue of Minimum Employment Conditions

The fundamental principle of the posting-of-workers system is the obligation to ensure that workers posted to Poland receive employment conditions no less favourable than those resulting from Polish statutory provisions, collective agreements, and other acts of law governing employment conditions in Poland. The guaranteed minimum employment conditions cover several key areas.

Minimum wage is an absolutely mandatory standard from which the posting employer may not derogate to the detriment of the worker. In 2026, the minimum wage is PLN 4,806 gross per month (an increase of PLN 140 compared to the PLN 4,666 applicable in 2025), corresponding to a minimum hourly rate of PLN 31.40 gross — pursuant to the Regulation of the Council of Ministers of 11 September 2025 (Journal of Laws 2025, item 1242). The posting employer is required to ensure that workers receive remuneration at least equal to these rates; the classification of pay components and allowances that count towards the minimum is governed by detailed provisions discussed below.

Working time — posted workers are subject to Polish working-time rules, including the daily and weekly working-time norms, overtime provisions, breaks and daily and weekly rest requirements. Working-time arrangements, including accounting systems and reference periods, must comply with the Labour Code, although where the worker’s home-country law is more favourable the employer must apply the more favourable provisions.

Annual leave — posted workers are entitled to annual leave on the terms set out in Polish law, meaning at least 20 days for workers employed for fewer than 10 years and 26 days for those with longer service. The posting employer may offset leave granted to the worker under the law of the home country against the Polish leave entitlement. It is worth noting that the amendment to the Labour Code (Act of 26 September 2025) has extended the range of periods counted towards the length of service to include periods of work under civil-law contracts (e.g. mandates) and periods of self-employment. These new rules apply from 1 January 2026 in the public finance sector and from 1 May 2026 for all other employers. This change may affect the leave entitlement and other service-linked rights of a posted worker who holds documented evidence of such prior professional activity.

Occupational health and safety — the posting employer bears full responsibility for ensuring that health and safety conditions at the workplace comply with Polish law. This requires adapting work processes, safety training, and equipment to the requirements of the Polish Occupational Health and Safety Act and its implementing regulations, even where the standards of the home country differ from those of Poland.

Equal treatment — posted workers benefit from the anti-discrimination protection set out in the Polish Labour Code, including provisions on equal pay and the prohibition of discrimination on grounds of sex, age, disability, race, religion, nationality, political beliefs, trade union membership, ethnic origin, religious denomination, and sexual orientation.

Pay Transparency — New Obligations in Force from 2025/2026

A significant change in Polish labour law that directly affects entities posting workers to Poland is the entry into force on 24 December 2025 of an amendment to the Labour Code (Act of 4 June 2025 amending the Labour Code, Journal of Laws 2025, item 807). This amendment introduced domestic recruitment obligations increasing pay transparency, representing a step towards the implementation of Directive (EU) 2023/970 on pay transparency. Full transposition of that Directive remained, at the beginning of 2026, a separate ongoing legislative process, with a completion deadline of 7 June 2026.

The new provisions require employers, including posting employers, to inform job candidates of the offered remuneration or its range. Article 183ca of the Labour Code allows flexibility as to the timing of that information: it may be provided in the job advertisement, before the job interview, or — at the latest — before the employment relationship is entered into, if not provided earlier. This means the information does not have to be made public in an advertisement accessible to all candidates; it may instead be communicated only to candidates shortlisted for further stages of recruitment, or even exclusively to the selected candidate. The information must be given in writing (paper or electronic form) and must cover not just the basic salary but all significant pay components, including bonuses, allowances, and monetary benefits. Simultaneously, as of 24 December 2025, employers are prohibited from asking candidates about their remuneration in previous employment. Failure to comply constitutes a petty offence punishable by a fine of between PLN 1,000 and PLN 30,000. Full transposition of Directive 2023/970 — encompassing, inter alia, employees’ right to information on average pay broken down by gender, the pay-gap reporting obligation for employers with at least 100 employees, and a ban on pay-confidentiality clauses — must be completed by 7 June 2026. In practice, employers posting workers to Polish entities should already be reviewing their remuneration policies and HR documentation for compliance with the forthcoming requirements.

Minimum Wage and the Prohibition on Including Travel Allowances

One of the most frequently contested issues in posting practice is whether, and to what extent, the posting employer may count various travel-related and accommodation-related benefits towards the posted worker’s minimum wage. Directive 2018/957/EU and its Polish transposition have resolved this question definitively: reimbursements of travel, accommodation, and meal costs, or daily allowances paid to posted workers, may not be counted towards the minimum wage and must be paid separately on top of it.

Where, under the law or practice of the sending country, the employer pays the posted worker daily allowances as an element of remuneration (rather than as expense reimbursements), those allowances count towards the minimum wage only to the extent that the law or practice of the sending country expressly so provides. In case of doubt, allowances are treated as expense reimbursements and are not counted towards the minimum wage. The practical consequence is that employers offering posted workers attractive posting packages with high daily allowances must nonetheless ensure that the basic salary itself meets the Polish minimum.

Administrative Obligations of the Posting Employer

Obligation to Notify the National Labour Inspectorate

An employer posting workers to Poland is required to submit a declaration of posting to the National Labour Inspectorate (PIP) no later than on the first day of the posting. The declaration is submitted in Polish or English, in paper or electronic form. The electronic channel indicated by PIP is the wizard available at the Biznes.gov.pl portal, which allows submission using a qualified electronic signature or a Trusted Profile (Profil Zaufany) — declarations must not be sent by email, as PIP does not accept submissions in that form. The declaration must contain a complete set of information identifying the posting employer, the posted workers, and the parameters of the posting.

The content of the declaration includes in particular the identifying details of the posting employer (business name, address, legal form, registration number or equivalent of the REGON number), contact details of the person designated as representative of the posting employer in Poland and authorised to liaise with PIP and the competent authority of the sending state, and a list of posted workers together with their identifying details and information on their positions, planned place of work, anticipated duration of posting, and nature of services. Any change in the data covered by the declaration requires submission to PIP of a notification of change within 7 working days of the date on which the change occurs.

The obligation to submit a declaration to PIP applies to every posting, regardless of its duration — a short stay in Poland alone does not exempt the posting employer from this obligation. The Act does, however, provide for a separate, narrow exception concerning the obligation to ensure remuneration and annual leave in relation to the initial assembly or first installation of goods supplied, where the posting does not exceed 8 days in a year and does not concern construction work — this is, however, an exception relating to the scope of guaranteed employment conditions, not an exemption from the notification obligation to PIP.

Designation of a Contact Person and Document Retention

The posting employer is required to designate a natural or legal person authorised to liaise with PIP and to send and receive documents on its behalf throughout the posting period. This person must be available on Polish territory or at least be in a position to respond promptly to correspondence and requests from a labour inspector — designating a contact person in a purely formal manner, without ensuring their actual availability, is unacceptable and may result in a finding that the obligation has not been duly fulfilled.

Employment documentation must be retained throughout the posting period in a form that permits immediate provision upon a control request from a labour inspector or other competent authority. The mandatory documentation includes the employment contract or other document confirming the employment relationship and terms of work, payroll records for the posting period, working-time records in Poland, and the A1 certificate confirming the social security legislation applicable to the posted worker. These documents may be retained in electronic form provided that immediate printing is possible.

Working-Time Records for Posted Workers

The posting employer is required to maintain working-time records for posted workers, covering the actual hours worked on Polish territory. The records should reflect the start and end times of work on each day, the total daily and weekly working hours, overtime hours, and the use of daily and weekly rest periods. A Polish labour inspector is entitled to request working-time records for the entire posting period, and their absence or inaccuracy constitutes an independent ground for the imposition of a fine.

Social Security for Posted Workers

The Single-Legislation Principle and the A1 Certificate

EU regulations (Regulations No 883/2004 and 987/2009) establish the principle that a posted worker is subject to the social security legislation of only one Member State. In the case of a worker posted to Poland by an employer established in another EU or EEA Member State, the legislation of the sending state applies throughout the posting, provided the posting does not exceed 24 months and the worker is not being posted to replace another worker.

The A1 certificate, issued by the competent social security authority of the sending state, constitutes proof that the posted worker remains covered by the social insurance system of the home country and is not required to pay contributions in Poland. The A1 certificate should be obtained before the posting begins and must be retained by the worker or by the employer throughout the posting period.

For workers posted by employers established outside the EU and EEA — for example, companies based in the United Kingdom post-Brexit, the United States, Japan, or India — the applicable rules are those of the social security agreements concluded by Poland with the relevant country, or, where no such agreement exists, Polish social insurance law. In many cases this means that contributions to ZUS (the Polish Social Insurance Institution) are payable on the remuneration of posted workers, and this must be factored into the calculation of posting costs.

Intra-Group Posting and the Permanent Establishment Risk

Employers posting workers within cross-border corporate groups must pay particular attention to the risk of creating a permanent establishment in Poland. If posted workers carry out activities on Polish territory that go beyond the provision of services to a Polish group company and instead act as permanent representatives of the parent company — concluding contracts on its behalf, negotiating commercial terms, or holding inventories — the tax authorities may challenge the transactional nature of the posting and find that the foreign company has a permanent establishment in Poland within the meaning of Polish tax law and the relevant double taxation treaty.

The consequences of a permanent establishment finding are far-reaching — they entail an obligation to register for tax purposes in Poland, taxation of a portion of the foreign company’s income under Polish corporate income tax, and the need to prepare transfer pricing documentation for transactions between the permanent establishment and the head office. For this reason, where employees performing managerial or commercial functions are to be posted, a prior legal analysis from both an employment law and a tax law perspective is strongly recommended.

Subcontracting and Joint and Several Liability

Subcontracting Chains and Extended Liability

The Polish Posting Act introduces a mechanism of joint and several liability of the principal contractor for the minimum wage obligations of subcontractors towards posted workers. This mechanism means that the general contractor or direct service principal may be held liable for the payment of outstanding minimum wages owed to workers posted by a subcontractor that has failed to meet its remuneration obligations.

The joint and several liability of the principal is subsidiary in nature — it arises only when the posted worker is unable to recover the outstanding wages directly from the employer. The principal may escape this liability by demonstrating that due diligence was exercised in the selection of the subcontractor, and in particular that prior to the conclusion of the contract it verified that the subcontractor was in compliance with its employment obligations and was providing employees with conditions conforming to Polish law. In practice, this necessitates the implementation of supply chain due diligence procedures, including verification of subcontractors’ labour law compliance history.

Practical Implications for Service Clients

Domestic entities commissioning services from foreign subcontractors whose own employees are posted to their premises should ensure that the service agreements they enter into contain appropriate guarantee clauses. Such clauses should require the subcontractor to comply with Polish posting rules, provide documentation confirming compliance with statutory obligations upon request, notify the principal without delay of any changes to data covered by the PIP notification, and indemnify the principal for any costs and penalties incurred as a result of the subcontractor’s breaches of posting obligations. Incorporating such clauses does not eliminate the risk of joint and several liability, but provides a basis for recourse claims.

Sanctions for Breaches of Posting Rules

Financial Penalties Imposed by the National Labour Inspectorate

Breaches of the Posting Act attract severe financial penalties, which may be imposed by the National Labour Inspectorate through fine proceedings or referred to a court. A fine for an offence under the Posting Act may amount to up to PLN 30,000 per breach identified. In the event of flagrant or repeated violations, cumulative fines may be imposed, the aggregate amount of which may materially affect the viability of projects carried out by posted workers.

Particularly serious consequences arise from a failure to pay the minimum wage — labour inspectors are entitled to order the employer to pay outstanding amounts together with interest, and information about the violation may be transmitted to the competent authorities of the sending employer’s home country, which may have implications for the right to continue providing services on the EU market.

The IMI Information Exchange System

In the event of repeated or particularly serious violations, Polish authorities may use the Internal Market Information System (IMI), which facilitates cooperation between labour inspection authorities across the European Union. The IMI system primarily serves the exchange of information about violations and the conduct of cross-border enforcement proceedings, which means that information about irregularities identified by Polish PIP may be accessible to the authorities of other Member States and may affect the overall reputation of the posting employer throughout the EU.

Posted Workers and Labour Immigration Regulations

EU/EEA Nationals and Free Movement Rights

Workers who are nationals of EU or EEA Member States do not require a work permit or visa to work in Poland. The principle of free movement of persons guarantees them the right to enter, reside, and work in Poland, although the posting employer must nonetheless fulfil all the administrative requirements under labour law described above. EU/EEA nationals staying in Poland for a period exceeding three months are required to register their residence with the relevant municipal office.

Third-Country National Posted Workers — New Act in Force from 1 June 2025

The legal situation of workers posted to Poland by employers established outside the EU, or of workers who are not EU/EEA nationals, is considerably more complex and requires compliance with additional immigration law requirements. From 1 June 2025, the Act of 20 March 2025 on the Conditions for Entrusting Work to Foreigners on the Territory of the Republic of Poland (Journal of Laws 2025, item 621) has been in force, fundamentally restructuring the previous regime in this area.

The key change with regard to the posting of foreign nationals by entities established abroad is the requirement that the foreign national must be employed by the posting employer before the posting to Poland commences — it is therefore not permissible to post a person with whom an employment contract has been concluded solely for the purpose of directing them to work in Poland. Furthermore, in the case of intra-group postings, the new provisions require vertical capital links between the foreign entity and the receiving entity in Poland — posting between so-called ‘sister companies’ (linked only through a common parent without direct vertical links) is not permitted. Where posting is for the purpose of providing services in Poland, the entity entrusting work to the foreign national must be providing an export service within the meaning of the new legislation.

In terms of work permits for foreign nationals posted by employers established outside the EU, Type C, D, or E work permits apply, depending on the nature and duration of the posting. The new legislation has also tightened the grounds for refusal of a permit — refusal may be made, inter alia, where the company was established for the purpose of facilitating the entry of foreign nationals into Poland, where the employer has obstructed inspections of the legality of employment, or where it has previously breached its obligations in respect of the employment of foreign nationals. Immigration procedures can significantly extend the timetable for a posting, and planning the full range of formalities should therefore commence at least three to four months before the intended start date of work in Poland.

Perspective of Foreign Investors — Key Strategic Considerations

Choosing Between Posting and Local Employment

Before deciding to post workers to Poland, foreign employers should conduct a comprehensive comparative analysis of the costs and risks of posting against the alternative of recruiting employees locally through a Polish company or branch. Posting retains its economic rationale primarily for short-term projects requiring specialist expertise unavailable on the Polish labour market, for the performance of key stages of construction and assembly contracts, and where a full local employment structure is not justified by the scale of activity in Poland.

Conversely, local employment through a Polish company becomes more advantageous when activity in Poland is permanent and long-term, when Polish-speaking staff need to be recruited, and when the employer wishes to avoid complex posting formalities and the risk of joint and several liability. In practice, the optimal solution for many foreign investors is a combination of both models — posting key specialists during the market-entry phase while simultaneously building a local employment structure.

Transfer Pricing and Intra-Group Posting

The posting of workers within cross-border corporate groups generates transfer pricing obligations that have been subject to increasingly intensive scrutiny by the Polish tax authorities in recent years. The costs of remuneration and employment charges incurred in connection with the posting of workers to a Polish group company must be settled in accordance with the arm’s length principle, which requires the preparation of appropriate transfer pricing documentation for transactions exceeding the statutory thresholds.

The methodology for allocating posting costs within the group — whether by way of cost recharge, a mark-up charged by the sending company, or under comprehensive intra-group service agreements — should be discussed in advance with a tax adviser and governed by the group’s transfer pricing policy. Incorrect classification of a posting transaction or the absence of appropriate transfer pricing documentation may result in both a challenge to the tax deductibility of costs and the imposition of penalties under the transfer pricing rules.

Summary and Practical Recommendations

Posting workers to Poland is a legal instrument with considerable operational potential, but one that requires careful preparation and ongoing compliance management. The complexity of the obligations incumbent upon the posting employer — spanning administrative notifications, the provision of appropriate pay and documentation conditions, the management of social security matters, and tax considerations — means that the risk of inadvertent non-compliance is relatively high, particularly for entities posting workers to Poland for the first time.

The most fundamental prerequisite for a compliant posting is the timely submission of a notification to the National Labour Inspectorate and the designation of a contact person before the commencement of the posting. Equally important are the timely procurement of the A1 certificate confirming the applicable social security legislation, the payment of remuneration meeting the Polish minimum without setting travel-related allowances against it, the maintenance of accurate working-time records, and the compilation of complete employment documentation throughout the entire period of the posting.

From a strategic perspective, foreign investors should in each case consider whether the posting model is optimal for their business model in Poland, taking into account not only direct costs but also the tax risk associated with the possible creation of a permanent establishment, transfer pricing documentation obligations, and potential joint and several liability in the subcontracting chain. A comprehensive approach to employment model planning — encompassing employment law, tax law, and immigration law perspectives — is a prerequisite for effective and lawful entry into the Polish labour market.

ABOUT ATL LAW

ATL Law is a law firm specialising in comprehensive legal services for foreign investors on the Polish market. We offer multilingual advisory services in the areas of tax law, corporate law, transfer pricing, and employment law. We support our clients at every stage of entering the Polish market — from selecting the optimal legal structure, through ongoing compliance services, to representation in tax and court proceedings. We have extensive experience in the implementation of labour law compliance programmes for posting arrangements, including the preparation of documentation packages and contacts with the National Labour Inspectorate.

Joint Venture in Poland

Posted on 09.03.2026 by kancelaria

Forms of Cooperation with a Polish Partner

A Guide for Entrepreneurs and Foreign Investors | ATL Law 2026

Joint Venture as a Market Entry Strategy for Poland

Entering the Polish market through a joint venture with a local partner is one of the most effective expansion strategies available to foreign investors. A joint venture combines the Polish partner’s market knowledge and business network with the foreign party’s capital, technology or know-how, creating a synergy that is difficult to achieve through solo market entry. Poland, as the sixth largest economy in the European Union with a dynamically growing private sector, offers investors a broad range of legal structures enabling flexible arrangements with a local partner.

The concept of a joint venture is not defined directly under Polish law. The legislator has not introduced a separate legal institution by that name, meaning that a joint venture may take the form of a commercial company, a contractual arrangement based on an unnamed agreement, a consortium, or another corporate structure tailored to the specific project. The choice of the optimal form requires consideration of many factors: the scope of the planned activity, the allocation of risk and profit, the governance structure, the financing approach, the exit policy, and the tax consequences both for the Polish and foreign parties.

This article provides a comprehensive overview of the joint venture structures available under Polish law, with particular focus on the characteristics of each form, key negotiation issues when entering into joint venture agreements, and practical aspects of operating joint structures from the perspective of foreign investors.

Legal Forms of Joint Venture in Poland – An Overview

Limited Liability Company as the Dominant Joint Venture Vehicle

By far the most commonly chosen legal form for joint ventures in Poland is the limited liability company (spolka z ograniczona odpowiedzialnoscia, sp. z o.o.), governed by the Commercial Companies Code. Its popularity stems from combining key features: limited liability of shareholders up to the amount of their contribution, a relatively low minimum share capital (the statutory threshold is PLN 5,000), flexibility in shaping the governance structure and decision-making rules, and clear legal personality enabling the company to independently enter into contracts, acquire rights and assume obligations.

In a joint venture model based on an sp. z o.o., each party acquires shares proportional to the agreed ownership split and planned profit participation. The Commercial Companies Code allows considerable freedom in shaping shareholders’ rights in the articles of association, making it possible to introduce shares with preferential voting or dividend rights, liquidation preferences, rights to appoint specific members of the management or supervisory board, pre-emption rights over shares, and mechanisms protecting a minority shareholder against unfavourable decisions of the majority.

A key legal instrument supplementing the articles of association is the shareholders’ agreement, concluded in parallel between the joint venture parties. This document governs matters not included or unsuitable for inclusion in the articles of association, including detailed decision-making procedures, financing commitments, exit mechanisms, non-compete clauses, and obligations to make in-kind contributions. Properly constructing both documents and ensuring their mutual consistency is of fundamental importance for the smooth operation of the joint venture and for the effective resolution of potential conflicts.

Simple Joint-Stock Company – A Modern Alternative for Start-Up Joint Ventures

Introduced into the Polish legal order in 2021, the simple joint-stock company (prosta spolka akcyjna, PSA) is an attractive alternative to the sp. z o.o. for innovative or technology-oriented joint ventures, particularly where one shareholder contributes primarily work or know-how rather than financial capital. The defining feature of the PSA is the possibility of acquiring shares in exchange for a contribution in the form of labour or services – an option not available in an sp. z o.o., where the Code provides exclusively for cash and in-kind contributions in the form of property rights.

The PSA is also distinguished by the absence of a minimum share capital requirement (PLN 1 is sufficient), simplified corporate procedures, the ability to incorporate and register either electronically or by notarial deed – the latter being required in particular where in-kind contributions of a form demanding notarial form are involved (e.g. real estate) – and a flexible governance model, including the option to choose a monistic structure with a board of directors in place of the traditional management board and supervisory board. For technology joint ventures, the PSA also offers native support for employee stock option plans, making it a useful structure for implementing incentive schemes for key employees.

General Partnership and Limited Partnership – Structures for Specific Business Models

A general partnership (spolka jawna), the simplest form of partnership under Polish law, may be considered as a joint venture vehicle where the number of partners is limited, their status is comparable, and they accept unlimited joint and several liability for the company’s obligations. The absence of separate legal personality, tax transparency at the level of the partners, and the lack of capital requirements make it attractive for simple forms of cooperation; however, unlimited personal liability effectively limits its use in higher-risk transactions. It is also important to note that, following the 2021 amendments, a general partnership may itself become a CIT taxpayer where its partners are not exclusively natural persons or where it fails to meet its information obligations towards the National Revenue Administration.

A limited partnership (spolka komandytowa) offers an interesting compromise: one or more partners (general partners) bear unlimited liability for the company’s obligations, while the remaining partners (limited partners) are liable only up to the amount of their registered contribution. This structure is sometimes used in joint ventures where the foreign party acts as a passive capital investor and the Polish party actively manages operations as the general partner. It should be noted, however, that limited partnerships have been CIT taxpayers since 2021, which eliminates their previous tax advantage arising from transparency. Where a limited partner is a legal person, its share of profits will be subject to CIT rather than PIT.

Consortium and Contractual Joint Venture

Where a joint venture has a limited time frame or subject matter – typically for the execution of a specific construction project, a public procurement tender or a technology implementation – the parties may opt for a consortium or a contractual joint venture without creating a separate legal entity. A consortium is based on a civil-law agreement in which the parties define the purpose of their cooperation, the allocation of tasks, risks and profits, designate a consortium leader authorised to represent the parties vis-a-vis external parties, and establish the principles for mutual settlements.

A contractual joint venture is characterised by flexibility and the absence of registration requirements, which shortens the implementation time. The drawback of this arrangement is the absence of separate legal personality, meaning that each party is liable to counterparties in accordance with the terms of the consortium agreement or on a joint and several basis, and any disputes between the parties are resolved exclusively on the basis of the agreement concluded. A consortium is not a corporate income tax payer; revenues and costs are settled directly by its participants.

Key Issues in Structuring a Joint Venture Agreement

Ownership Structure and Shareholder Contributions

The primary negotiation issue in any joint venture is determining the ownership structure – the percentage stake of each party in the share capital or founding fund of the company. The ownership split should reflect not only the cash contributions but also the value of non-cash contributions: know-how, patents, licences, distribution networks, brand equity or customer databases. The valuation of these elements is one of the most challenging aspects of the negotiation, and its outcome directly affects each party’s position in the joint venture.

Polish statutory provisions set out detailed formal requirements for making in-kind contributions (apports) to a capital company, including the obligation to describe and value the subject matter of the apport in the articles of association. For contributions consisting of intellectual property, real estate or an enterprise, an independent valuation by a statutory auditor or certified valuer is required. Tax consequences of the apport must also be taken into account – both for the contributing party (potential income arising from the acquisition of shares in exchange for a non-cash contribution) and for the receiving company (the question of deductible costs with respect to the transferred assets).

Decision-Making Mechanisms and Corporate Governance

Properly structuring decision-making mechanisms is critical for preventing deadlock situations that can paralyse joint venture operations, particularly in a 50/50 structure. The Commercial Companies Code grants shareholders broad latitude in shaping the rules for adopting resolutions, including the possibility of introducing absolute majority voting, unanimity requirements or special quorum thresholds for strategic decisions.

In practice, it is essential to clearly distinguish between operational decisions taken by the management board independently or by simple majority, and strategic decisions requiring the consent of all shareholders or a qualified majority. The latter category typically includes: amendments to the articles of association, increases or reductions in share capital, incurring obligations above a defined monetary threshold, mergers and acquisitions, the transfer of shares to a third party, changes to the business profile, and dividend distributions.

Joint venture structures also commonly employ drag-along clauses, obligating a minority shareholder to join a share sale transaction initiated by the majority shareholder, and tag-along clauses, guaranteeing the minority shareholder the right to sell its shares on the same terms as the majority shareholder. These provisions effectively balance the interests of the parties in the event of a change in ownership.

Profit Distribution and Dividend Policy

The joint venture agreement should precisely define the profit distribution rules, as the default statutory provisions – providing for distribution proportional to shareholding – do not always reflect the parties’ intentions. Shareholders may agree on different dividend ratios, preferences for a specific class of shares, or may link dividend payment to the company achieving defined financial results or operational KPIs (dividend ratchet).

Dividend policy should take into account the company’s financing needs – in particular the need to reinvest profits during a period of rapid growth – and the tax consequences of dividend payments for shareholders. A dividend paid by a Polish company to a foreign shareholder is in principle subject to withholding tax at the rate of 19%, although a reduced rate under a double tax treaty or an exemption under Council Directive 2011/96/EU (the Parent-Subsidiary Directive) may apply, provided the required conditions as to shareholding level and holding period are met.

Exit Mechanisms – Put and Call Options and Deadlock Resolution Clauses

Precisely regulating the exit routes from the joint venture is one of the most important elements of joint venture documentation, even though in practice it tends to be neglected amid the enthusiasm surrounding the initiation of the cooperation. The fundamental instruments are the put option – entitling one shareholder to require the other to buy back its shares – and the call option – entitling one shareholder to acquire the other’s shares at a pre-agreed price or valuation methodology.

In the event of a decision-making deadlock, several alternative mechanisms are used: the Russian Roulette procedure, under which one shareholder proposes a price and the other must either sell its shares or buy out the initiating party; the Texas Shoot-out (sealed bid auction); or mediation and arbitration as a dispute resolution path. The choice of the appropriate mechanism depends on the nature of the joint venture, the relationship between the parties and their negotiating positions.

A key practical issue is determining the share valuation method for the purposes of exercising options or activating the deadlock resolution procedure. Parties may agree on valuation by book value, fair market value determined by an independent expert, an EBITDA multiple or another agreed metric. Regardless of the chosen method, it is important to precisely define the rules for its application in order to avoid interpretive disputes at a time when the relationship between the shareholders is already strained.

Tax Aspects of Joint Ventures in Poland

Taxation of the Joint Venture and Its Participants

The tax consequences of the chosen legal form should be analysed at two levels: the joint venture vehicle itself and its participants. In the case of a joint venture structured as a capital company (sp. z o.o., PSA, S.A.), the company is a separate CIT taxpayer, subject to tax at the rate of 9% or 19%. The 9% rate applies to small taxpayers whose gross sales revenues including VAT in the preceding tax year did not exceed the equivalent of EUR 2 million, and to taxpayers commencing business activity in their first tax year, provided no statutory exclusions apply – in particular those relating to entities established as a result of restructuring or division. Shareholders are taxed only upon the distribution of a dividend or disposal of their shares. A significant element of tax settlements on cross-border payments is the pay-and-refund mechanism in force since 2019: where payments to a single taxpayer (including dividends, interest, royalties and certain intangible services) exceed PLN 2 million per year in aggregate, the remitter is required to withhold tax at the domestic rate, after which the taxpayer or remitter may apply for a refund of the overpayment arising from the application of a double tax treaty or a directive-based exemption.

Consortia and contractual joint ventures are tax transparent – each participant reports its share of revenues and costs directly in its own tax return. While this eliminates the double taxation typical of capital companies, it requires careful tracking of settlements between participants and may generate complications where the parties apply different accounting methods.

Transfer Pricing in Joint Venture Structures

Where the joint venture operates within a group of related parties – which is typical for foreign investors holding stakes in a joint venture company – transactions between the joint venture company and other group entities are subject to transfer pricing rules. The documentation obligation arises when the statutory thresholds for controlled transactions are exceeded: currently PLN 10 million for commodity and financial transactions, and PLN 2 million for service transactions and those involving intangible assets.

Establishing a correct transfer pricing policy is particularly important for transactions such as: licences for technologies or trademarks contributed by one shareholder to the joint venture; management or technical support services provided by a related entity to the joint venture company; intra-group loans and financing; and the distribution of the joint venture’s products or services through one shareholder’s sales network. Each of these transactions requires the application of an arm’s length price and documentation of its market character in a local transfer pricing file.

Tax Optimisation of a Joint Venture Structure

Foreign investors considering a joint venture structure in Poland have access to several tax optimisation mechanisms. The R&D relief discussed in a separate ATL Law publication is available to a joint venture company conducting qualifying research and development activities at its own economic risk. Similarly, the IP Box preference with a 5% CIT rate on income from qualifying intellectual property rights may be applied by a joint venture company that holds qualifying IP rights.

It is also worth considering structuring the joint venture with reference to the Polish Investment Zone, which offers a CIT exemption on income from a new investment for a period of ten to fifteen years. Combining the investment zone exemption with other tax preferences requires careful analysis of the cumulation rules, as costs covered from income exempt from taxation cannot simultaneously serve as the basis for an R&D deduction.

Specific Considerations for Foreign Investors

Due Diligence of the Polish Partner

Before commencing joint venture negotiations, a foreign investor should carry out comprehensive due diligence on the prospective Polish partner. This should encompass a legal review (corporate status, ownership structure, litigation history, mortgage encumbrances and registered pledges), a financial review (financial condition, credit history, tax and employment liabilities) and a reputational review (verification of managers and beneficial owners in domestic and international registers, including in the context of AML/KYC regulations).

Polish anti-money laundering legislation imposes on joint venture companies obligations to identify beneficial owners and report them to the Central Register of Beneficial Owners. In multi-tier structures typical of foreign corporate groups, establishing and registering all beneficial owners requires careful analysis of the ownership chain and may be a time-consuming process.

Governing Law and Dispute Resolution Forum

Joint venture agreements involving foreign investors often include clauses selecting a governing law other than Polish law, or provide for the resolution of disputes before foreign courts or in international arbitration. With regard to the articles of association and corporate relations, Polish statutory provisions are of a mandatory nature and cannot be displaced by a choice of foreign law. However, shareholders’ agreements, drag-along and tag-along clauses, and put and call options may be subject to a choice of foreign law or the jurisdiction of an arbitral tribunal.

Poland is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which guarantees the enforceability of arbitral awards in more than 160 states. An arbitration clause designating the Court of Arbitration at the Polish Chamber of Commerce, the Vienna International Arbitral Centre or the ICC as the competent forum provides effective protection against jurisdictional risk in the event of a conflict between shareholders.

Permits and Restrictions for Foreign Investors

Foreign entities may in principle freely acquire shares in Polish companies and incorporate new companies; investors from outside the European Economic Area and Switzerland have access on the basis of reciprocity or pursuant to investment protection treaties. Certain sectors are, however, subject to specific restrictions or permit requirements. The Act on the Control of Certain Investments of 2015, amended on several occasions, provides for an obligation to notify the intention to acquire shares in entities operating in strategic sectors such as energy, telecommunications, banking, arms manufacturing and critical infrastructure.

Investments in regulated sectors may require prior sector-specific licences – for example an energy concession, a KNF authorisation for banking or insurance activities, or a decision of the President of UKE in telecommunications. The acquisition of control over a Polish company by a foreign entity may be subject to notification to the Office of Competition and Consumer Protection where the turnover thresholds of the transaction parties exceed the statutory values.

Practical Recommendations for Implementing a Joint Venture in Poland

Sequencing and Timeline

ATL Law’s experience in advising on joint venture transactions indicates that effective implementation of a joint venture proceeds through several successive stages. The preparatory stage involves conducting due diligence on both sides, agreeing a term sheet setting out the key parameters of the cooperation (ownership structure, contribution valuations, governance mechanisms, profit allocation and exit principles), and deciding on the legal form. Only after the term sheet has been finalised does the preparation of the full transaction documentation begin.

Incorporating an sp. z o.o. through the S24 electronic system typically takes one to three business days, while the classical route via a notary and the registration court takes one to four weeks. Incorporation of a PSA – which may proceed either electronically or by notarial deed – generally follows a similar timeline, with the electronic route being faster. Obtaining sector-specific permits or notifying the competition authority may significantly extend this timeline and should be factored in at the planning stage.

Key Issues to Address in the Documentation

Comprehensive joint venture documentation should include: the articles of association containing detailed provisions on the ownership structure and rights attaching to individual classes of shares; the shareholders’ agreement governing governance, financial and exit matters; agreements relating to in-kind contributions or technology licences brought into the company by one of the shareholders; any non-compete agreements binding the shareholders and key managers; and any service or management agreements where one shareholder provides support services to the company.

An often underestimated but critically important element of the documentation is the precise definition of circumstances triggering the dissolution of the joint venture or the obligation of one shareholder to exit, such as insolvency, a change in the shareholder’s ownership structure, a material breach of the agreement, or a prolonged period of the company performing below agreed thresholds. This provision serves as a legal safety net that becomes crucial when the relationship between the parties deteriorates.

Conclusion

A joint venture with a Polish partner is an effective model for foreign investors entering the Polish market, combining local competence and resources with foreign capital, technology and know-how. The range of available legal forms – from the sp. z o.o. through the PSA to contractual structures – allows the structure to be precisely tailored to the specific characteristics of the project, the parties’ risk profiles and their business objectives.

The success of a joint venture in Poland depends not only on the quality of the business relationship between the shareholders, but also on the legal quality of the documentation governing the cooperation. ATL Law’s experience demonstrates that investment in the precise construction of the articles of association and the shareholders’ agreement at the outset of the cooperation pays for itself many times over through efficient conflict management and smooth execution of any exit processes in the future.

Foreign investors should engage professional legal and tax advisors when structuring joint ventures, particularly in view of the specific requirements of Polish corporate law, transfer pricing regulations applicable in multinational structures, sector-specific investment restrictions, and tax optimisation opportunities whose full utilisation requires knowledge of both Polish regulations and the law of the investor’s home jurisdiction.

ABOUT ATL LAW

ATL Law is a law firm specialising in comprehensive legal services for foreign investors in the Polish market. We provide multilingual advisory services (Polish, English, German) in the areas of tax law, corporate law, transfer pricing and employment law. We support our clients at every stage of their entry into the Polish market – from selecting the optimal legal structure and advising on joint venture transactions, through ongoing compliance services, to representation in tax and court proceedings.

www.atl-law.pl | office@atl-law.pl

[SUCCESS] Effective enforcement against a foreign contractor (EPO)

Posted on 05.03.2026 by kancelaria

How a European Payment Order and a precisely executed enforcement procedure in Poland helped our Client recover the full outstanding amount.

Result:

Receivables recovered: 100%

Foreign enforcement costs: €0

Instrument used: European Payment Order

Client’s Situation

Our Client — a Polish company providing services to entities across the European Union — faced a situation familiar to many entrepreneurs operating in cross-border markets: a foreign contractor stopped making payments, ignoring payment demands and all attempts at an amicable resolution.

The prospect of conducting enforcement proceedings abroad — in an unfamiliar legal system, in a foreign language, with the support of a foreign law firm — seemed not only costly, but outright discouraging. The Client needed an effective, controlled solution.

EU law provides businesses with powerful tools to recover cross-border receivables. The key is knowing how and when to use them.

Our Approach

After analyzing the debtor’s financial position and the available legal instruments, we decided to pursue a European Payment Order — a simplified cross-border procedure governed by Regulation (EC) No 1896/2006 of the European Parliament and of the Council. This mechanism allows for the fast and cost-effective obtaining of an enforceable title in cases involving undisputed monetary claims of a cross-border nature.

Stages of the Procedure

Analysis & Strategy — Verifying the validity of the claim, selecting the appropriate legal instrument, and assessing the debtor’s assets available in Poland.
Filing the EPO Application — Preparing and submitting the European Payment Order application using the standard Form A in accordance with EU regulations.
Obtaining the Title — Securing the issuance of the EPO, which is enforceable in all EU Member States without any separate recognition procedure.
Enforcement in Poland — Successfully conducting enforcement proceedings on Polish territory — without the costs of engaging foreign counsel.

What is a European Payment Order?

The European Payment Order (EPO) is an EU legal instrument designed to simplify the recovery of undisputed monetary claims in cross-border disputes between EU Member States. Its key advantages include reduced formalities and procedural costs, as well as automatic enforceability throughout the entire European Union — with no separate recognition procedure required.

When is an EPO the Right Solution?

The claim is monetary in nature and due for payment
The case is cross-border (parties in different EU Member States)
You need to obtain an enforceable title quickly and cost-effectively
The debtor holds assets or receivables in Poland or another EU country
You wish to avoid the costs of conducting enforcement proceedings abroad

Outcome

The proceedings concluded with complete success. Through a precisely executed European Payment Order procedure and effective enforcement conducted in Poland, our Client recovered the full amount owed. The enforcement proceedings were carried out entirely on Polish territory, eliminating the need to engage foreign law firms and the costs associated with doing so.

The Client regained full control over the process, and the matter was resolved efficiently — free from the unnecessary complications that arise from differences between national legal systems.

Facing issues with a foreign contractor?

Cross-border receivables don’t have to mean costly and uncertain proceedings abroad. EU law provides effective tools — you just need to know how to use them. Contact us to discuss your options for recovering what you are owed.

IP Box 5% – Preferential Taxation of Income from IP

Posted on 03.03.2026 by kancelaria

The IP Box regime, introduced into the Polish tax system in 2019, forms part of a broader policy aimed at supporting innovation-driven businesses. Its core feature is the possibility to tax qualifying income derived from intellectual property rights at a reduced 5% rate, both under personal income tax (PIT) and corporate income tax (CIT). Structurally, the regime does not reward the mere ownership of IP rights, but rather the results of genuine research and development (R&D) activity conducted by the taxpayer.

The mechanism is not a simple rate reduction. Its application depends on meeting specific substantive and formal requirements, and their interpretation continues to generate practical challenges and disputes with tax authorities.

IP Box as an R&D-Based Preference

The key condition for applying the 5% rate is that the taxpayer conducts R&D activity and creates, develops or improves a qualifying intellectual property right within that activity. Consequently, the regime promotes creative and systematic development processes rather than passive holding of rights.

In practice, taxpayers must demonstrate that their work was not purely routine or repetitive. Tax authorities and administrative courts consistently emphasize the need for a creative element and problem-solving character, even if the novelty is assessed at the level of the enterprise rather than the entire market. The prevailing interpretation allows the inclusion of software development and enhancement projects, provided they go beyond mere maintenance or bug-fixing.

Scope of Qualifying IP Rights

The statutory catalogue of qualifying intellectual property rights is closed and includes, among others, patents, utility models, industrial designs, topographies of integrated circuits, supplementary protection certificates and – most importantly in practice – copyrights to computer programs.

In business practice, software is the most common asset benefiting from the IP Box regime. Proper contractual structuring is crucial, particularly in B2B models. The income eligible for the 5% rate must be linked to the transfer of economic copyrights or the granting of a licence. Where remuneration covers additional services (e.g. consulting, maintenance, implementation), these components must be clearly separated. Failure to allocate income appropriately may result in partial or full denial of the preference.

Qualifying Income and the Nexus Ratio

A distinctive feature of the Polish IP Box regime is the nexus ratio, which limits the portion of income eligible for the 5% rate to that corresponding to the taxpayer’s own R&D involvement. This mechanism stems from OECD BEPS guidelines and aims to prevent artificial profit shifting without genuine R&D substance.

As a result, not all income derived from qualifying IP is automatically taxed at 5%. The proportion between in-house R&D costs and costs of acquiring R&D results or IP (especially from related parties) must be calculated. In group structures where R&D is partially outsourced to related entities, the nexus ratio may significantly reduce the effective benefit of the regime. Careful tax modelling is therefore essential prior to implementation.

Accounting and Documentation Requirements

The application of the IP Box regime requires maintaining separate, detailed accounting records enabling the allocation of revenues, costs and income to each qualifying IP right. For PIT taxpayers, this involves keeping additional records alongside standard bookkeeping.

In practice, documentation and record-keeping constitute one of the most sensitive risk areas. Tax authorities adopt a strict approach to the requirement of allocating income per individual IP right. Records prepared retrospectively, solely for the purpose of a tax audit, may be challenged if they do not reflect actual business processes.

Interaction with the R&D Relief

The IP Box regime may be combined with the R&D tax relief. First, eligible R&D costs may be additionally deducted under the R&D relief; subsequently, income generated from the resulting IP may be taxed at 5%. When properly structured, this combination can substantially reduce the effective tax burden, particularly in technology-driven and high-margin sectors.

However, consistency between tax documentation, contractual arrangements and the actual conduct of business operations remains essential. Inconsistencies in these areas are a frequent source of disputes with tax authorities.

Our Legal Support

Implementing the IP Box regime requires not only an understanding of tax provisions, but also a comprehensive review of contractual frameworks, business models, cost structures and internal processes. Proper identification of qualifying IP, preparation of compliant documentation and assessment of whether the activity meets statutory R&D criteria are critical steps.

Our law firm provides comprehensive advisory services in relation to the IP Box regime – from preliminary feasibility analysis, through structuring and documentation design, to assistance in obtaining individual tax rulings and representing clients in tax audits or proceedings. We support both individual entrepreneurs and corporate entities in implementing and maintaining the regime in a secure and risk-aware manner.