Foreigners can operate many different types of businesses in Poland. One of them is the joint-stock company. Establishing such a company by a foreigner is more complicated than setting up a sole proprietorship, but it offers many benefits. See what the advantages and disadvantages are of establishing a joint-stock company by a person who is not a Polish citizen.
What businesses can foreigners operate in Poland?
Starting a business in Poland is very fast and intuitive. This applies particularly to citizens of European Union or European Economic Area member states, the United States of America, the Swiss Confederation, as well as citizens of Ukraine who legally reside in Poland and have a PESEL number. These individuals can choose any form of conducting business in Poland, which means they can become shareholders of a joint-stock company.
What is a joint-stock company in Poland?
A joint-stock company is a type of capital company intended for larger businesses. Its operation is based on the circulation of shares owned by the shareholders. These shares constitute the company’s share capital, thus making the shareholders co-owners of the business. Managing the company is the responsibility of its governing bodies, not the shareholders. Considering that a joint-stock company is also a capital company, it can be formed by one or more individuals. An exception is one type of shareholder – a sole-member limited liability company. In this case, it is not possible to establish a joint-stock company.
A joint-stock company has legal capacity and full capacity to perform legal actions. It can, among other things, enter into contracts, manage assets, have a defined organizational structure, and appoint the appropriate governing bodies of the joint-stock company. Shareholders are not personally liable for the company’s debts, but this is conditional on the payment of the minimum required share capital in the joint-stock company.
What are the advantages of running a joint-stock company in Poland?
Running a joint-stock company in Poland can be a beneficial solution for entrepreneurs planning large-scale growth, looking for ways to raise capital, or wishing to take their company public. It is one of the most advanced organizational forms in the Polish legal system, offering a range of advantages that attract both domestic and foreign investors. See what the key benefits are of running a joint-stock company in Poland, as well as the challenges to consider before deciding to set one up.
Advantages of a joint-stock company in Poland – is it a good choice for foreign entrepreneurs?
One of the main reasons that convinces foreign entrepreneurs to establish a joint-stock company in Poland is the ability to raise large-scale capital. Through the issuance of shares, the company gains access to a wide range of investors – both domestic and international. Listing shares for public trading on the stock exchange facilitates rapid capital growth, which in turn allows for large investment projects and the development of new technologies. It also presents an opportunity for expansion into international markets.
A major benefit of running a joint-stock company in Poland is the limited liability of shareholders. They are not personally liable for the company’s debts. This liability is limited solely to the amount of their contributed capital, significantly reducing the financial risk associated with running the business. A joint-stock company also offers considerable flexibility in managing the company. The ability to freely sell shares and smoothly change the ownership structure is a notable advantage of this business form. All of this makes joint-stock companies attractive to both individual investors and investment funds.
Disadvantages of a joint-stock company in Poland
Despite its undeniable advantages, a joint-stock company also has certain drawbacks that may influence the decisions of entrepreneurs. Running a joint-stock company involves the obligation to maintain full accounting, which means a more complicated and detailed financial record-keeping than in other forms of business activity. It is also important to note that establishing a joint-stock company requires gathering significant initial capital, which can pose a barrier for smaller businesses. Additionally, the process of issuing shares and introducing them to the public market is complex and time-consuming, which may delay the company’s development plans.
Joint-stock company in Poland – challenges for entrepreneurs
Joint-stock companies are required to comply with strict legal requirements, including regulations regarding the organization of general meetings, publication of financial reports, and adherence to rules regarding share trading. They must undergo regular audits to verify compliance with the law and ensure financial transparency. These obligations require the hiring of specialists. Although these requirements may seem burdensome, they also guarantee greater transparency and credibility in the eyes of investors and other stakeholders. By employing specialists experienced in managing companies established by foreigners, you can ensure that even complex procedures will not burden your business.
Another significant aspect is the dispersion of power in a joint-stock company. Key decisions are made by the general meeting of shareholders, which means that minority owners have limited influence over the company’s operations. This may lead to situations where the interests of the management or majority shareholders conflict with the interests of smaller investors.
Summary
In summary, setting up a joint-stock company in Poland by a foreigner can be profitable, especially if the company plans significant growth, raising capital through the stock exchange, and has the resources to cover the associated costs. However, it is important to consider the administrative, legal, and financial challenges, which may require hiring the appropriate specialists.
Joint-stock company – key information at a glance
- A joint-stock company is a legal form of business in which the share capital is divided into shares. Shareholders are only liable for the company’s obligations up to the amount of their contribution, significantly minimizing the financial risk associated with running the business.
- The minimum share capital is 100,000 PLN, which can be a significant barrier for smaller companies. The company must also maintain full accounting and submit financial reports, so it is necessary to collaborate with a firm specializing in legal and tax matters – a traditional accounting office may not provide sufficient support.
- It is an attractive solution for businesses planning expansion, as it allows for quick capital raising through the stock exchange.
- A joint-stock company must have several fixed bodies – the board of directors, supervisory board, and the general meeting of shareholders. Unfortunately, this structure tends to disperse power, which may cause decision-making difficulties.
- The main benefits of running a business are limited liability and flexibility in raising capital. On the other hand, operating a joint-stock company in Poland generates relatively high administrative costs and involves complex procedures, which necessitates hiring legal and accounting specialists.
If you need help setting up a joint-stock company in Poland or have questions about other forms of business activity, such as limited liability companies, we offer professional support. We provide tax advisory services and assist with the business registration process. Our team will guide you through every step, ensuring full compliance with Polish law.
Our law firm will assist with matters related to negotiations, disputes, and international transactions, which is especially important for companies planning expansion into foreign markets. Our experience working with international clients ensures that we are well-versed in the specifics of such activities and can offer appropriate legal solutions.
