VAT Compliance KYC Procedure in Banks in Poland - SEO Guide for Foreign Companies with VAT Registration
Introduction
The KYC (Know Your Customer) procedure is a key requirement for banks in Poland and the EU. For foreign companies registered for VAT in Poland, complying with KYC regulations is essential to open bank accounts, process payments efficiently, and maintain trustworthy business relationships.
This article explains what KYC entails, why it is crucial for foreign companies operating in Poland, and how to manage the process effectively.
What is the KYC Procedure?
KYC (Know Your Customer) is a process used to identify and verify bank clients. Its purpose is to understand the company's identity, ownership structure, business activities, and potential risks.
KYC is part of AML/CFT regulations (Anti-Money Laundering / Counter Financing of Terrorism) and ensures that banks know who their clients are and where funds originate.
KYC and Banks' Obligations in Poland
Polish banks must comply with national and EU regulations. They are required to:
• implement strict customer verification procedures,
• conduct ongoing monitoring of accounts,
• assume regulatory responsibility for any compliance breaches.
Incomplete KYC documentation can result in account freezes or transaction delays.
Why KYC is Important for Foreign VAT-Registered Companies in Poland
1. Lack of Local Business History
Without a local presence or business history, banks perceive higher risk. KYC reduces this uncertainty by reviewing the corporate structure, beneficial owners (UBOs), and the actual scope of operations in Poland.
2. VAT Registration vs. Business Activity
VAT registration alone does not indicate full business operations in Poland. Banks assess:
• reasons for VAT registration,
• types and volumes of transactions (goods trading, services, e-commerce),
• cooperation with EU and non-EU partners.
3. Ownership Structure and UBO
Complex holding structures or international ownership require:
• identification of the ultimate beneficial owner (UBO),
• submission of official corporate documents,
• certified translations if necessary.
4. Tax and Reputational Risk
Banks verify that transactions are tax-compliant and that companies are not engaged in tax avoidance schemes. Proper KYC documentation protects both the bank and the company from tax authority issues.
Practical Challenges for Foreign Companies
1. Delays in Account Opening
Longer processing times are common, especially for companies with complex ownership structures.
Example: A German trading company experienced weeks of delay when opening a bank account due to additional verification of its group structure.
2. Transaction Freezes
High-value or cross-border payments may be temporarily blocked.
Example: A UK IT services company had payments frozen until the bank verified the contract and nature of the services provided.
3. Periodic KYC Updates
Banks regularly request updated KYC data, even when no significant changes have occurred.
Example: A Czech logistics company had to resubmit corporate and UBO documents, causing temporary restrictions on transfers.
4. Misunderstanding of Business Model
Banks closely examine e-commerce, dropshipping, or digital services due to perceived risks when the business model is not clearly explained.
Example: A Dutch e-commerce company selling to Polish consumers without a physical presence had to detail its supply chain and VAT processing to complete KYC.
Preparing for KYC
• Have complete corporate documentation ready,
• Clearly explain your business model and VAT reasons,
• Keep UBO information current,
• Respond to bank inquiries promptly and accurately.
Transparent communication significantly improves the KYC process.
Summary
For foreign companies with VAT registration in Poland, KYC is critical for opening bank accounts, ensuring payment compliance, and building trust with business partners. Proper preparation and clear communication minimize risks and enhance credibility with banks and partners.
