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.

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