Lawyer in Poland

The difference between Sp. zoo and JDG
(TOV-FOP or LLC-IP)

Choose for yourself what is more favourable for you

Choosing the right form of entrepreneurship in Poland:
Sp. z o.o. v. JDG

To start a business in Poland and before starting an entrepreneurial activity you have to calculate everything very much.
The most popular in Poland are the limited liability company (Sp. z o.o.) and the sole proprietor (JDG).
We can't say which is better - each form has its own pros and cons, its own opportunities and limitations.
The right form of entrepreneurial activity is the key to future success.

The following describes the basic differences between an entrepreneur and a limited liability company in order to choose the right form and start a business in Poland. Who can establish a Sp. z o.o. and who can register a JDG.
In each individual case, it is necessary to carefully consider the question - in what form it is better to register a business, what form will provide the easiest and quickest way to maximise profits.

Poles themselves, in order to start a business in Poland, register Sp. z o.o. instead of JDG mainly to avoid monthly payments to ZUS - it is expensive to pay the equivalent of 350-400 euros monthly to ZUS after the grace period expires, the second reason for choosing Spzoo is the liability for the debts of JDG with its own property, the founders of Spzoo do not bear such liability.

We provide services throughout Poland.

The main differences between JDG Sp. z o.o.

Who can establish Sp. z o.o.

Any foreigner, except for incapacitated persons who have committed an offence on Polish territory, etc.
Can be established by one or more founders

Registration of LLC (Sp. z o.o.)

Possible through a notary and remotely
Takes an average of 5-6 days
Costs more than registering as an entrepreneur
There's a government fee

Authorised capital of Sp. z o.o.

Minimum 5000 PLN, a declaration of its formation is required upon registration, there is no requirement to deposit it to a current account

Accounting Sp. z o.o.

With very few exceptions, an accountant or support from an accounting firm will be needed
No simplified accounting systems
Costs more

Taxes Sp. z o.o.

9% on profits (until turnover of €2 million per annum is achieved) or 19% on profits (on turnover over €2 million)

Liability Sp. z o.o.

The founders are liable for the authorised capital contributed at the time of registration
Members of the management board may in some cases be liable with their personal assets

Social insurance payments in Sp. z o.o.

Most of the time optional, but:
If one founder - monthly payments
Paid to employees when remuneration for work is paid to them
The management board can work without pay and not pay social security contributions

How many founders can there be

In Sp. zoo, as in other companies, may have one or several founders - accordingly, contributions made at the establishment of the company and profits from its activities may be distributed among the founders of the company in different ways.

Money Withdrawal Sp. z o.o.

  1. 19% tax on dividends
  2. Other forms of money withdrawal - then taxes depending on the chosen form

Who can register as a JDG

Ukrainians who are legally staying on the territory of Poland
Visitors to Poland on a PBH visa
Holders of a Pole Card or a residence permit in Poland
Holders of residence permit in Poland (but not all)
Having EU resident status
And a number of others

Registration of JDG

Mostly remotely, can be in ujond (planned to move to exclusively remote registration)
Takes an average of 1 day
You can do it yourself for free

Authorised capital of JDG

No

JDG Accounting

Easier and cheaper
It is possible to self-manage
Lots of profiled online programmes

JDG Taxes

  1. Progressive scale - 12%/32% of profits
  2. Linear - 19% of earnings
  3. From turnover - varies greatly

JDG's responsibility

Full liability for obligations by personal property

Social security for JDG

Obligatory from the moment of registration

ZUS payouts, as they grow, become the biggest minus in JDG - as they are paid compulsorily

 

JDG Founder

There can be only one entrepreneur, he alone spends his personal money and his property, he alone is liable for all debts and is the sole beneficiary - all profits or losses are his.

 

JDG Money Withdrawal

The money after taxes is the property of the entrepreneur

In this case, there are virtually no differences in business operations and in recruitment for Sp. z o.o. и JDG.

However, each activity has specifics of starting a business

You can see what permits are required for a particular business and what requirements you need to fulfil on the following page

Peculiarities of doing business

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