Before you'll set up a company in Poland

January 25, 2021

Are you planning to set up a company in Poland and open an engineering center? Learn about these five steps we recommend before making a decision:

  1. Difference between having own team vs. subcontracting and outsourcing
  2. Local market research
  3. Legal and Tax research
  4. Financial model
  5. Local suppliers

We hope this brief introduction will help you in the decision making process.

  1. Own Team vs. Subcontracting or Outsourcing

Decision to open an engineering center in Poland may be preceded by testing this market and gradually building a local team. Before you’ll take the decisive step of registering your own company and hiring team members directly to your new company - you can try a lighter solution.

There are known and proven solutions on the market, such as subcontracting and outsourcing. By subcontracting we mean hiring developers to your team in the agency model and by outsourcing we mean hiring external software development agencies to carry out product development.

While working with our clients, we see that all three scenarios apply. The choice which one is the right for you, depends on your company's growth plans.

  1. Local market research in terms of technology selection

Sometimes we receive inquiries as to whether we will be able to recruit developers in very rare technologies. If you work in commonly known and liked technologies such as Java, Angular, .NET, PHP and others - don't worry about your recruitment processes. If, on the other hand, you work with less popular solutions or with a legacy code, take into account that some markets may not have enough talents in a given technology.

If you need a report on local market and technology, please contact us and we will check it for you, giving you information on:

  • availability of specialists of the local market in a given technology,
  • salary ranges for different seniority levels,
  • how fast you can recruit the specialists.
  1. Law and taxes

We often say that you should learn to live with a limited liability company and get to know its environment.

Introduction to local law and taxes is a necessary point in the process of registering a company in Poland. Each country has its own regulations and we should not apply them by analogy. Polish system is governed by its own rules and it's good to know within what limits we can operate.

We encourage you to learn more about the legal basis, especially in the field of:

  • commercial companies law - corporate regulations,
  • labour law and other forms of employment.

Company's registration itself is quite a simple and technical activity, while running a company requires more patience and understanding of legal and administrative grounds.

As a rule, we recommend our clients to register a limited liability company of which 100% shares are owned by the parent company. It's a simple and proven structure. When it comes to taxes - it is important to understand the concept of transfer prices, but their application is also not complicated.

Regardless of corporate matters, another aspect worth understanding and distinguishing from the US and UK markets in particular - is the subject of labour law, employment contracts and different methods of employment in Poland. Labour contract is not the only way of employment, but it certainly gives the greatest sense of security to the employee.

In Poland, as an alternative to the Employment Contract, a B2B contract is also used, which clearly differs in the understanding of the B2B contract under UK or US law.

As for the Employment Agreement - we will write an additional post about it, which will deepen this topic and will introduce you to the basics of employment contracts based on the Polish Labor Code.

  1. Financial model

When deciding to open a branch in Poland in the form of a limited liability company, it is worth preparing a Profit and Loss Account as well as Cash Flow forecast. These financial data will allow you to build a model for the coming quarters and assess the real level of financial involvement.

Building a Profit and Loss Account forecast in our opinion is an indispensable element of the process when registering a subsidiary in Poland. We can omit this element if we decide on the subcontracting and outsourcing model directly with your mother company.

If you need help with the preparation of financial data, you can talk to us and we'll make it work for you.

  1. Local suppliers

It is worth doing a decent research and choosing reliable suppliers who will relieve you of your daily duties. We consider important partners to be those who provide services in the field of accounting and tax consultancy, legal services, recruitment and employment, as well as office services.

Well-chosen partners will allow you to avoid everyday hassle connected, among others with:

  • fulfillment of local accounting, HR and tax obligations,
  • employing team members on the basis of a well-structured employment contract or B2B contract, as well as
  • administrative office service (at the beginning we recommend to go for the serviced offices).

Building good relationships with your suppliers at the beginning of the road will save you time and money.

We hope these five points will help you get to know your new local environment better. We encourage you to move your engineering centers to Poland from various reasons - not only from the financial perspective but also because of a very high quality of working standards and quality of the delivered code.

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We are a recruitment agency that was spawned from a tech company and comprehensively understands the IT market. If you’re growing your team – let us know, we know how to help you.

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