Set up a Sole Proprietorship in Poland
JDG (Jednoosobowa Działalność Gospodarcza), or Sole Proprietorship, is the simplest form of business organization in Poland. Under this structure, the entrepreneur is an individual who conducts business independently and bears full responsibility for their obligations with all their assets. This form of entrepreneurship is one of the most common in Poland due to its simplicity and speed of registration.
Do you need to set up a company in Poland?
Legal support services start from EUR 330
Characteristics of JDG:
- JDG registration in Poland takes a maximum of 24 hours
- The entrepreneur bears full responsibility for all business obligations with their personal assets.
- Sole representation – the owner and manager of the business is one person
- 5. No share capital requirements – no initial capital is needed to open a JDG.
Who can open a Sole Proprietorship in Poland?
Until recently, only citizens of Poland and EU countries, as well as foreigners with permanent residency status in Poland, could register a JDG. Today, this list has significantly expanded. Currently, foreigners with the following can register a Sole Proprietorship in Poland:
- Karta Polaka (Polish Card). Possession of a Karta Polaka significantly simplifies the naturalization process – from obtaining a visa to registering a Sole Proprietorship even on the day of entry into Poland.
- Visa under the Poland.Business Harbour program for IT specialists
- Temporary Residence Permit based on marriage to a Polish citizen or EU Resident status
- Long-term EU resident permit issued in Poland. Essentially, this is an equivalent to a permanent residence card.
- Humanitarian status – refugee status or supplementary protection
IMPORTANT! Citizens of Ukraine who arrived in Poland after February 24, 2022, can open a Sole Proprietorship without additional conditions or requirements, under a simplified procedure. The only requirement is to obtain a PESEL number with UKR status. In practice, even Ukrainian citizens who entered the country before February 2022 and received a PESEL number without UKR status on general grounds can also register a Sole Proprietorship in Poland under a simplified procedure.
How much does it cost to open a Sole Proprietorship in Poland?
We offer a comprehensive remote company registration service for any form of ownership. The final cost depends on the range of services provided and your needs (whether you need a VAT number, registered address, support when opening a bank account, etc.).Sole Proprietorship (JDG) Registration
500 zł 400 zł
20% saveWhat's included:
- Registration in CEIDG (24 hours)
- Consultation on the tax system
- Selection of PKD codes
- Registration with the tax office and ZUS
Sole Proprietorship (JDG) Registration + Address + Bank Account
2000 zł 1500 zł
25% saveWhat's included:
- Registration in CEIDG (24 hours)
- Consultation on the tax system
- Selection of PKD codes
- Registration with the tax office and ZUS
What's included:
- local registered address paid for 1 year (Warsaw)
- receipt, scanning, and forwarding of correspondence.
- Assistance with opening a bank account
Recently in Poland, employment relationships between employers and employees (especially in the IT sector) are increasingly being formalized through JDG instead of a standard employment contract. In other words, a hired employee registers as a sole proprietorship and enters into a B2B contract with their employer instead of an employment contract. This arrangement is highly convenient for employers, as it relieves them of accounting costs and allows them to externalize their workforce. The responsibility for calculations and tax payments falls on the hired employee. For the employee, the main disadvantage is the absence of social benefits such as paid sick leave and vacation under a B2B contract. Financially, however, employees benefit from higher salaries during the first two years compared to employment under a standard employment contract.
Attention! If you were employed under a standard employment contract (umowa o pracę) and decide to switch to a B2B contract with the same employer, you can only use the general and linear forms of taxation; switching to a simplified tax scheme (ryczałt) is only possible after 5 years. However, if you were working under a civil law contract (umowa zlecenie), you can immediately switch to a simplified tax scheme when transitioning to a B2B contract.
How to Register a Sole Proprietorship in Poland — Step-by-Step Guide
Registering a Sole Proprietorship (JDG) in Poland is not a complicated process, and all steps can be completed online within one day. For registration, you will need a PESEL number and an electronic signature (if you intend to do everything online, without visiting government institutions). You also need a residential address in Poland (apartment rental agreement) where your Sole Proprietorship will be registered, or you can use a virtual office as your legal address. The registration process in Poland involves several key steps:
Step 1: Registration in CEIDG
- Filling out the CEIDG-1 form on the CEIDG website, or in person in paper form at the municipality (Urząd Gminy)
- Selection of Business Activities: Define the types of activities (PKD codes) according to the Polish Classification of Activities (Polska Klasyfikacja Działalności).
- Identity Verification: If you register online, it is sufficient to sign the application using an electronic signature.
Step 2: Obtaining NIP and REGON numbers
After registration in CEIDG, NIP (Tax Identification Number) and REGON (Statistical Business Number) are automatically assigned. This may take 1 to 2 days. If you plan to open a company that will operate in the export-import sector, you must additionally register as a VAT payer.
Step 3: Registration with ZUS (Zakład Ubezpieczeń Społecznych)
You are required to register with the social insurance system (ZUS) within 7 days from the start of your activity. This can be done by submitting a ZUS ZUA or ZUS ZZA application, depending on whether you are obliged to pay social insurance contributions or only health insurance contributions.
Step 4: Opening a Bank Account
It is recommended to open a separate bank account for your business activities. This will simplify accounting and tax obligations. A benefit is that for entrepreneurial activity as a Sole Proprietorship in Poland, it is not mandatory to open a corporate account; a personal account can also be used.
Step 5: Choosing a Tax System
You need to choose a form of taxation. The following options are available:
- General principles (skala podatkowa): 17% and 32% tax rates.
- Flat tax (podatek liniowy): 19% tax rate.
- Lump sum tax (ryczałt od przychodów ewidencjonowanych): income tax without considering expenses.
- Tax card (karta podatkowa): fixed tax depending on the type of activity and location.
Step 6: Accounting
Depending on the chosen tax system, you can manage your accounting yourself or hire a professional accountant.
Step 7: Additional Permits and Licenses
Some types of activities may require additional permits or licenses (e.g., transport, taxi services, cryptocurrency trading). Check the requirements for your specific field.
What is more profitable: Sole Proprietorship (JDG) or Company (Sp. z o.o.)?
The choice between opening a Sole Proprietorship (JDG) and a company (e.g., Spółka z o.o. — limited liability company) in Poland depends on your business goals, scale of operations, and personal preferences. Here is a comparative analysis of these two forms of business:
| JDG | Sp. z o.o. |
|---|---|
| Ease of Registration | |
| Fast - up to 24 hours. Free. | 3 to 5 days. Paid. Quite difficult to manage independently. |
| Who is eligible? | |
| Not available to all categories of citizens. Opening a Sole Proprietorship requires a basis — PBH visa, Karta Polaka, permanent residency, UKR status. | Any foreigner over 18 years old with a valid passport. Registration can even be done from outside Poland. |
| Share Capital Amount | |
| No share capital required. | Minimum share capital - 5,000 zł |
| Cost of Accounting Services | |
| Starts from 150 zł/month. However, with a simplified tax system, accounting can be managed independently. | From 400 zł per month |
| Taxation Options | |
| The following options are available: General principles (skala podatkowa): 17% and 32% tax rates. Flat tax (podatek liniowy): 19% tax rate. Lump sum tax (ryczałt): - simplified tax Tax card (karta podatkowa): fixed tax depending on the type of activity and location. | Only general taxation system |
| Do you need to pay social contributions (ZUS)? | |
| YES. However, there is a 2-year grace period, after which you will transition to the full ZUS rate. | Only if there are employed staff, the company pays ZUS for them. |
| Liability | |
| The entrepreneur is liable for all obligations with all their assets. | Only within the limits of the company's share capital |
| Possibility of obtaining a Temporary Residence Permit | |
| YES. An application can be submitted almost immediately after JDG registration. | Yes. However, the application can only be submitted after 1 year of the company's operation, after the reporting period closes. |
Summary:
When to choose JDG:
- If you are a budding entrepreneur and want to start operations quickly.
- If you are an IT specialist, freelancer
- If your business involves low risks
- If you plan to run a small business without the need for external investment.
- If you are unsure whether your startup will be successful and the ability to quickly and smoothly close operations is important.
When to choose Spółka z o.o.:
- If you plan to conduct business with a high level of responsibility and risks.
- If you plan to attract investors or partners.
- If you want to create a more stable and prestigious structure for doing business. Spółka z o.o. is perceived as a more serious structure, which can be important for partners and clients.
Any questions?
If you have any questions, you can ask them via e-mail info@izibiz.pl
WhatsApp +48 720 740 429 Viber +38 095 772 8540 Telegram @Izibizzz
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