Holding Company in Poland

 

A holding company in Poland is preferred by entrepreneurs for several reasons, one of them related to the smaller withholding taxes on profit or dividends that must be paid. Due to centralized management activities, licensing and financing, a holding company in Poland can prove itself to be a very efficient way to inssure business achievements for a group of subsidiaries in a certain country or region.

 

You can watch the video below on how to register a Polish holding company:

 

 

 

Before registering a holding company in Poland, the shareholders must establish their exact business goals, operational and logistical requirements and to study all details related to the local taxes. 

 

Generally, there are several hints that can make a business become an efficient Polish holding company right from the start:

 

- when opening a holding company in Poland it would be ideal for the owner to find a jurisdiction where incoming dividends from the branches of holding companies are subject to low withholding tax.

- It would be advantageous if the holding company could be created in a Polish jurisdiction where dividend income sent from the branches to the holding company would be subject to a low corporate income tax.

- The profits of the holding company in Poland obtained from selling shares should be subject to a low rate of capital gains tax.

- The dividends sent by the holding company to the parent business entity should either be exempt from or subject to low withholding tax rates in the respective jurisdiction.

 

Polish Holding Company in the legal system

 

 

According to the law, a holding company in Poland is not a subject to distinctive taxes or special foreign company rule. In Poland, intra-border tax consolidation is allowed, but cross border consolidation is not possible. The possibility of consolidating taxes in Poland depends on the share capital of the companies, their types and other such characteristics. For further details on this topic and an in-depth analysis of the entrepreneurs' business and fiscal possibilities, we strongly recommend taking the advice of a company formation specialist in Poland.

 

Generally, the tax for dividends in Poland is 19% and can be reduced under the law of Deferred tax assets (DTA). The good news is that Poland has over 80 DTA. This type of tax does not exist for dividends paid to companies in the EU and EEA (European Economic Area) states, which are subject to the conditions of the Parent-Subsidiary Directive.

 

Another advantage from the taxes point of view is that in Poland, starting from 1 July 2013, the interest and royalty payments paid by Polish corporate residents to associated European Union companies are exempted from withholding taxes. 

 

What legal entity is suited for opening a holding company in Poland?

Main advantages of opening a Polish holding company

• - The GDP for Poland increased by 6.8% in 2021, compared to the previous years, according to the Polish Statistical Information Centre;
• - Poland saw a 5% net inflow of foreign direct investment in 2021;
• - Between 2010 and 2018, the total value of assets held by companies with foreign capital in Poland rose by 70%, reaching a value of $415 billion;
• - The biggest investors in Poland were Germany, the U.S., France, and the UK, which collectively held 48% of the assets owned by foreign companies operating in Poland;
• - The government offers a range of investment incentives for opening a Polish company, such as an income tax exemption, available for a period between 10 to 15 years.

 

For more information about a Polish company formation or how to open a holding company in Poland, please contact us and we will make sure you receive advice for your business.