Company law, company formation, restructuring Setting up a Polish LLC (sp. z o.o.) with foreign shareholders and directors
Overview: Foreign participation in Polish companies
Poland is an attractive location for international entrepreneurs. Setting up a Polish LLC (sp. z o.o.) by a foreign company or appointing foreign directors is legally permitted and very common in practice.
However, there are specific formal and legal requirements to consider at an early stage.
Can foreign shareholders set up a Polish sp. z o.o.?
Yes. Foreign natural and legal persons may freely be shareholders in a Polish limited liability company (sp. z o.o.). This applies both to EU and non-EU nationals and entities.
Setting up a Polish sp. z o.o. by a foreign company is also possible, provided that the company’s existence and legal status can be properly documented.
What documents are required from foreign shareholders?
The scope of required documents depends on the shareholder's legal form.
Natural persons
- copy of passport or ID card,
- address and date of birth details,
- certified translations into Polish where required.
Legal entities
- recent excerpt from the commercial register,
- articles of association or shareholders’ agreement,
- document confirming the authority to represent the company,
- certified translations into Polish.
Can foreigners serve as directors in Poland?
Yes. Foreigners may freely serve as directors (management board members) of a Polish sp. z o.o. Neither their place of residence nor their nationality needs to be Polish.
A director may perform their duties entirely from abroad, as long as statutory and organisational requirements are met.
Residence and employment law aspects
For EU nationals, there are no specific residence requirements linked solely to holding a directorship. For third-country nationals, a residence permit may be required if the role is physically performed in Poland.
The mere fact of being a management board member does not automatically create an employment relationship.
Tax aspects for foreign shareholders and directors
Foreign shareholders are generally taxed in their state of tax residence. Dividend distributions from Poland may, however, trigger withholding tax in Poland.
For directors, the key question is in which country their remuneration should be taxed. Double taxation treaties play a central role here.
Specific issues for German entrepreneurs
Many clients ask whether, as a German entity or individual, they can set up a company in Poland. The answer is: yes, without any difficulty. German individuals and companies very frequently set up Polish LLCs (sp. z o.o.).
Particular attention is paid to:
- proper documentation,
- appropriate tax structuring,
- avoiding permanent establishment risks,
- clear separation between the German and the Polish company.
Liability and duties of foreign directors
Foreign directors are subject to the same duties as Polish directors.
These include, in particular:
- proper management of the company’s affairs,
- compliance with the company’s tax obligations,
- timely filing for insolvency where required,
- compliance and documentation obligations.
Lack of knowledge of Polish law does not exempt a director from liability.
Common mistakes made by foreign founders
Typical mistakes include:
- incomplete or incorrectly translated documentation,
- lack of prior tax planning,
- underestimating the scope of directors’ liability,
- mixing personal and company funds.
These issues can be easily avoided with professional legal and tax support.
FAQ – frequently asked questions
Does the director have to live in Poland?
No. Having a place of residence in Poland is not required.
Is a Polish bank account mandatory?
Yes. A business bank account in Poland is required for a sp. z o.o.
Can a foreign holding company be the sole shareholder?
Yes. A foreign company can be the sole shareholder of a Polish sp. z o.o.
Conclusion – properly preparing foreign shareholders and directors
The involvement of foreign shareholders and directors in Polish companies is clearly regulated and straightforward to implement in practice. The key factors are complete and correct documentation, well-thought-out tax structuring, and a clear understanding of the duties that come with the role.
Taking these points into account enables foreign businesses to set up or manage a Polish sp. z o.o. safely and efficiently.