If you have a company based in the US, chances are that you have already thought about the benefits of carving a place for yourself on Polish markets. I have written about Polish companies at length in the previous part (you can read it here) so I’m just going to add to that information and focus on US companies and the crucial differences between business entities in US and Poland.
This article is organised to present companies in the US and then compare them to Polish business formats, I have also provided a short diagram illustrating the distinctions between Polish companies for clarity. If something is not mentioned in the descriptions, it was definitely mentioned the previous post of the series.
We’re omitting sole proprietorship (Polish indywidualna działalność gospodarcza) again, since it’s of little interest here and we have already described it in some detail. However, it’s worth mentioning that the beginnings of Polish spółka partnerska can be traced to professional corporations in USA (limited liability partnerships) and their ability to incorporate and benefit professionals as architects, lawyers, translators etc.
Limited Liability Companies (LLCs) are similar to spółka z ograniczoną odpowiedzialnością, due to its legal and business independence from its owners and where personal assets of partners are not included in the company debts. There are significant differences in tax calculations and it’s also worth mentioning that where sole proprietorship belongs to LLCs, Polish indywidualna działalność gospodarcza markedly does not (its owner is responsible with own monies for company debts). Failing to recognise these differences could also land you in trouble with Polish social insurance institution, ZUS.
C Corporations are closest to spółka akcyjna, which also offers limited liability and no shareholder limit. Both types are good for bigger endeavours with the perspective of entering the stock market. Again, since the US and Polish tax systems are vastly different, proceeding without caution (which I know you won’t do) can bring about a huge world of hurt as Polish tax office is famously very strict.
S Corporations are closest to spółka akcyjna again, mainly due to the differences in tax systems (Poland has no federal tax per se). The main differences here are: the restricted number of shareholders and only one class of stock for S-corp.
Partnerships I have briefly mentioned the LLPs above, but limited partnerships as a whole are similar to Polish spółka komandytowa, where the responsibilities of partners for company debts aren’t equal. General partnership is similar to spółka jawna, and again, the main difference here is that in Poland, spółka jawna absolutely needs to be registered to exist.
There is no ready equivalent for spółka komandytowo-akcyjna (sometimes called limited joint-stock partnership), which merges the partnership rules of spółka komandytowa with all the benefits of spółka akcyjna. This unique company format can be utilised to great potential on Polish markets.
Since I’d like this article to be readable I have discounted the differences in the state legislature as the state-specific rules can provide for even more differences and similarities (and fill at least 5 more pages!). You are more than welcome to ask me questions in the comments or contact me for a no-obligation consultation.