Are you planning to start a company in Poland and wondering if, as a foreigner, you can be its sole owner? Does Polish law allow 100% of the shares in a company to belong to a person who does not hold Polish citizenship? The answer to this question is crucial for many foreign entrepreneurs starting their business activities in Poland.
Yes, a foreigner can be the sole owner of an LLC (Sp. z o.o.)
The answer is: YES, a foreigner can hold 100% of the shares in a Polish limited liability company (Spółka z ograniczoną odpowiedzialnością – Sp. z o.o.).
Polish law is very liberal in this regard. As mentioned in previous articles, third-country nationals (from outside the EU/EEA/Switzerland) can freely, regardless of their residence status or place of residence, establish capital companies (Sp. z o.o. and S.A.) and acquire and hold shares in them.
This also includes the possibility of holding all (100%) shares in an LLC by a single foreigner. In such a situation, we are dealing with a jednoosobowa spółka z ograniczoną odpowiedzialnością (single-member limited liability company), whose sole shareholder is a foreigner.
Single-member LLC – What does it mean in practice?
The Polish Commercial Companies Code (Kodeks spółek handlowych – KSH) explicitly permits the existence of LLCs where all shares belong to a single shareholder. However, one must remember a few specific rules regarding the operation of such a company:
- Form of Legal Acts: The most important practical difference concerns the form of decision-making. According to the KSH (Art. 156 in conjunction with Art. 210 § 2), a legal act between the sole shareholder and the company represented by them (when the sole shareholder is also the sole management board member) requires the form of a notarial deed. A declaration of will submitted to the company by the sole shareholder also requires written form under pain of invalidity, unless the S24 system provides for a different form. In practice, this means, for example, that resolutions of the sole shareholder (e.g., approving financial statements, amending the articles of association) must be recorded by a notary, which generates additional costs and formalities compared to multi-member LLCs where simple written resolutions often suffice. Exception: If the company was established via the S24 system and the articles were not subsequently amended by a notary, some resolutions can be adopted using the resolution template in the S24 system.
- Prohibition of “Granddaughter Company”: There is a restriction that a single-member LLC cannot be formed solely by another single-member LLC.
- Disclosure in KRS: The fact that the company has a single shareholder is disclosed in the National Court Register (KRS). Changes in this regard (e.g., if new shareholders join) must also be reported.
- Liability: Despite its single-member nature, the LLC remains a separate legal entity, and the shareholder’s liability for its obligations is generally limited to the amount of contributed capital (unless the shareholder is also a management board member – then they may be subsidiarily liable in certain situations).
Comparison with sole proprietorship (JDG)
It is worth distinguishing a single-member LLC from a sole proprietorship (JDG):
- JDG: This is an activity conducted directly by a natural person who is liable for obligations with all their assets. As mentioned in previous articles, the ability for a foreigner from a third country to establish a JDG is highly restricted and depends on their residence status (e.g., permanent residence, Pole’s Card).
- Single-Member LLC: It is available to every foreigner as a form of ownership, while offering limited personal liability for the shareholder. It constitutes a separate legal entity.
Does this apply to other company types?
- Joint-Stock Company (S.A.): It is theoretically possible for a single foreigner to establish a single-member joint-stock company as well. However, due to significantly higher minimum share capital requirements (PLN 100,000) and a more complex structure, this form is very rarely chosen by individual entrepreneurs.
- Partnerships (Registered, Partnership, Limited, Limited Joint-Stock): By definition, they require at least two partners, so 100% ownership by one person is not possible.
Scenario: freelancer sets up a single-member LLC
Maria, a graphic designer from Brazil, wants to provide her services to clients in Poland and internationally through her own Polish company. She does not have a residence status entitling her to establish a JDG.
- She decides to set up a single-member Sp. z o.o., where she will be the sole shareholder and president of the management board.
- Since she is abroad and has no Polish electronic signature, she uses a law firm, granting a lawyer a Power of Attorney (with Apostille and translation) to establish the company.
- The company is registered in the KRS with Maria as the sole shareholder.
- When Maria, acting as the sole shareholder, needs to make formal decisions regarding the company later (e.g., approve annual financial statements), she must do so via resolutions in the form of a notarial deed.
- She also remembers that she needs to separately legalize her own stay in Poland if she wants to live here and manage the company (e.g., by applying for a temporary residence permit for the purpose of conducting business activity).
Registration formalities – Are there differences?
The registration process for a single-member LLC in the KRS is very similar to that of a multi-member company. The same basic documents need to be submitted (articles of association, list of shareholders – indicating one shareholder, declaration on capital contribution, management board details, fees, etc.). The main difference appears later, in the ongoing operation of the company and the requirement for the notarial deed form for the sole shareholder’s declarations of will.
Legal support for foreigners’ single – Member companies
If you plan to establish a single-member LLC as a foreigner, our law firm can assist you:
- In the company registration process (whether via S24, if you have the required signatures, or through a representative).
- In explaining the specific formal requirements concerning single-member LLCs (e.g., the necessity of resolutions in notarial deed form).
- In ensuring the company’s operations comply with Polish law.
- In the process of legalizing your stay in Poland related to your business activity.
In conclusion, the answer to the title question is affirmative. As a foreigner, you can be the sole owner (hold 100% of the shares) of a Polish limited liability company. This is an accessible and popular form for foreign entrepreneurs, while providing limited liability. However, remember the specific formal requirements related to making decisions by the sole shareholder.
(Please remember that the information contained in the article is general and mainly concerns LLCs. It is always advisable to consult the details with a lawyer based on your individual situation and business plans.)
