Don't want to work for your employer? Do you dream of owning your own business, but the barriers of registration and taxes seem insurmountable? You should learn more about the possibility of running a business in Poland without registration. Many entrepreneurs are faced with the question: Is it really possible to start a business without getting caught in the maelstrom of bureaucracy and formalities? Let's look into this issue together and clarify how realistic it is to run a business in Poland without the hassle. Read this article to learn more about doing business in Poland without registering a company. Make yourself comfortable, we're getting started!
Is it possible to run a business without registration in Poland in 2023?
As strange as it may sound, Polish law has provided an interesting possibility to run a business without registering it. It is called Działalność nierejestrowa / firma na próbę.
Let's start with the laws. In April 2018, the Unregistered Activities Act came into force, which gave individuals the opportunity to conduct business activities in Poland without registering a firm. But, as always, there is a main condition - the income from such activities must not exceed 75% (until the first of July this figure was 50%) of the minimum wage in the country. Currently, this means that the revenue from business should not exceed PLN 2,700 per month.
Who can run unregistered activities in Poland?
Let's look at who can take advantage of this alternative form of entrepreneurship.
1. The activity must be carried out by a physical person.
2. No business activity. In order to take advantage of the unregistered activity, you must not have conducted business activities within the last 60 months.
3. Income limitation. As we have already mentioned above, the monthly income from your business must not exceed 2700 PLN.
4. Absence in spółka cywilna. If you participate in a joint activity or have a share in a limited liability company (spółka cywilna), you cannot benefit from unregistered activities.
5. The activity must be non-specific. Specific business lines require a lot of additional permits and interaction with the state. Therefore, it is clear that, for example - you cannot extract minerals in this way.
About foreigners – there is no mention or prohibition in the laws of Poland that can prevent a foreigner from doing business without registration. However, it is worth realizing that in some cases you will need permits from the Voivode (and this is all very long and tedious). For example, if you just sit at home and sew T-shirts and sell them, then no additional permits will be needed. But if you decide to run advertising (and for this you need to sign a contract with another organization) you will need permits from the Voivode.
What are individuals exempted from in case of unregistered activities in Poland?
Operating a business without registration in Poland using unregistered activities brings with it not only a simplification of the process, but also a number of notable advantages.
→ Time-saving and simplified process. One of the key advantages of being unregistered is that you will not have to deal with registering your firm with various government agencies such as CEIDG, GUS and the tax office. Since you are not officially opening your firm, you will not need to obtain NIP and REGON numbers.
→ No social contributions. You will not have to pay social contributions on the ZUS portal as other businesses do.
→ No VAT and no advance payments of income tax. You are also exempt from paying VAT and advance payments of income tax.
→ Simplified accounting.
Obligations when running an unregistered business in Poland
As in all aspects of life, doing business in Poland without registration has two sides of the coin. On the one hand, you get certain advantages and simplifications compared to traditional entrepreneurship. However, on the other hand, there are also obligations that you have to fulfil before the state.
→ Simplified accounting.
→ Respect for consumer rights. Regardless of the form of your business activity, you are obliged to respect and fulfil the rights of consumers.
→ Filing a PIT-36 declaration. Even though you do not need to make an advance payment, income tax will still be calculated on the basis of the declaration. This declaration can be completed online or by hand (you can download the form here). It is worth noting that when submitting the declaration online, you will need to put your digital signature, we told you how to do it in our article.
→ Keeping a sales log. You are required to keep a sales log. This logbook may be required by the tax authorities in the event of an audit. It must contain the following information:
transaction number
date
sale amount
amount of proceeds
Upcoming changes in the law on unregistered activities in Poland. What to expect in 2024?
Until 1 July 2023, individuals were allowed to receive income not exceeding 50% of the minimum wage in the country in order to conduct business without registration. Now, this limit has been increased to 75% of the minimum wage. However, from 2024 onwards, there are plans to make further changes to the system.
Under these plans, an annualized system will be introduced whereby individuals will be able to earn an income of no more than 9 minimum wages per year. This means that entrepreneurs will be able to earn up to 32,400 PLN per year without officially registering their business.
How does it work in practice? Let's look at a working case:
«In 2024, individual X accepts an order for 30,000 PLN for the entire tax year. Currently, if he received the entire amount in one month, he would be required to officially register a business, as the amount exceeds the limit of PLN 2,700 per month. However, with the introduction of the new system in 2024, he would not need to officially register a business as his income does not exceed the limit of PLN 32,400 per year.»
Summarizing the results
Myth or reality? Reality, but the detailed answer to this question depends on your goals, situation and needs. If you run a small business and your business income does not exceed 2700 PLN per month, then Działalność nierejestrowa is the ideal solution for you, as it has many advantages. However, if you intend to run a larger business, you will still have to formalize your company.
