Most foreigners migrate to Poland in search of a better life and employment opportunities. However, some newcomers have more serious plans, considering starting their own business. It is no secret that foreigners can engage in entrepreneurial activity in Poland. However, the specific form of business activity may vary. The most popular options among foreigners are Sp. z o.o. and JDG. They have many differences between them, including tax rates, liability, and contributions to ZUS.
There are quite a few articles and useful materials on the Internet on both JDG and Sp. z o.o. However, few people make detailed comparisons between these two forms of business activity. Such material would be especially useful for all foreigners who are just considering starting a business in Poland. That is why we decided to prepare a detailed comparison of Sp. z o.o. vs JDG for you. Below, we will discuss their main similarities and differences, taxation, and liability. Let's get started!
What is JDG?
We suggest starting with JDG, as it is the simplest form of doing business in Poland today. Why is that? It is suitable for freelancers, consultants, and those who work alone. For example, Onlyfans models in Poland most often work through an individual entrepreneur (you can find more information about this at the link). Here are some features of JDG that you should know from the start:
The entrepreneur bears full personal responsibility for the business's obligations with all of their assets.
No authorized capital is required.
You can choose one of three taxation options.
Not all foreigners are allowed to register a JDG in Poland.
A real-life example. Imagine you have come to Poland from another EU country, say the Czech Republic. You have an idea to provide consulting services online. If your income does not exceed 75% of the minimum wage, you can forget about registering a company altogether. However, if your income is higher, you must conduct your business activities officially. In this case, JDG is the perfect solution for you. For the first 6 months after registering as a sole proprietor, you are exempt from paying taxes. You also have the opportunity to reduce your ZUS contributions during the first two years of running your sole proprietorship.
Discover who can (and cannot) register as a sole proprietor in Poland in 2025
What is Sp. z o.o.?
Spółka z ograniczoną odpowiedzialnością (Sp. z o.o.) means a limited liability company. It is a legal entity separate from its owner. Moreover, one LLC may have several owners who have equal rights to the company. The company pays corporate income tax (CIT), and dividends are taxed additionally. This option is ideal for shops, large enterprises, and ambitious start-ups. What can be highlighted when talking about a limited liability company?
Authorized capital is required (minimum PLN 5,000).
Registration of a limited liability company is available to foreigners, even those who are abroad.
Can be done online.
Accounting and financial reporting are required.
A real-life example. Imagine that you are in your home country and are just planning to move to Poland. Thanks to the S24 online portal, you can register an LLC via the Internet. You need to register on the website, draw up a company agreement based on the template provided online, submit an application, sign it with an ePuap electronic signature, and wait for the court to review the case. This way, you can travel to Poland as soon as your company is registered. Foreign owners of Sp. z o.o. also receives a residence permit.
Check out how to register a Sp. z o.o. remotely in 48 hours
Key differences between Sp. z o.o. and JDG in 2025
So, what exactly distinguishes Sp. z o.o. from JDG? Which option is best to choose? To answer these questions, it is worth reviewing a detailed comparison of these two forms of business activity in Poland. We have prepared a useful table for you below!
Comparison parameter | Sp. z o.o. | JDG |
Legal status | Legal entity | Individual |
Who can open it | Foreigners without PESEL, non-residents, legal entities | Citizens of Poland, EU countries + foreigners with PESEL and residence permit |
Liability | Limited liability, within the limits of the established capital | Full liability for all debts with personal property |
Taxation | 9% or 19% CIT + 19% on dividends | Several options are available: 12/32%, 19% or ryczałt (rates by type of activity) |
Authorized capital | Required authorized capital of PLN 5,000 or more | No authorized capital required |
Financial reporting | Full reporting, mandatory balance sheet and reports required | Simplified reporting, which is possible without the help of an accountant |
More details about liability and taxes
One of the most important and key differences between these two forms of business activity is liability. In a Sp. z o.o., the founder is not liable for the company's debts with their personal property. In this case, the risks are limited to the invested share capital. For example, if an LLC owes a supplier PLN 100,000, the owner does not lose their apartment or car. In a JDG, the entrepreneur is liable for everything — both the business and personal property. If a sole proprietor fails to pay taxes or settle accounts with a client, the debt may be recovered from personal accounts, property, or even the family car.
When choosing a JDG, you can choose your own tax rate using the following scale: 12% up to PLN 120,000 of income, then 32%, a fixed 19%, or a flat tax (ryczałt). In addition, sole proprietors must also pay social security contributions to ZUS. In 2025, this will be around PLN 1,600–2,000, depending on the form of taxation and length of service.
Sp. z o.o. is subject to corporate income tax (CIT): 9% for income up to EUR 2 million per year, 19% if your income is higher. Dividends are additionally taxed at 19% for the founder. For example, if an LLC earned PLN 100,000 in net profit, the owner will receive approximately PLN 73,000 after all taxes.
You should also know about the existence of business incubators. You can conduct entrepreneurial activities by cooperating with a business incubator. In this case, all responsibility, risks, and reporting are assumed by the company you are cooperating with. Taxes usually range from 6 to 12%. Among the popular incubators in Poland, people choose organizations such as Łatwy Start, KPT ScaleUp, AIP, Biznes Link, and the well-known Twój StartUp. In our article, we discussed in more detail how to conduct business activities through a business incubator.
What form of business activity should you choose in Poland?
As you can see, there are many differences between sole proprietorships and LLCs in Poland. Which is better for running a business? You need to understand that it all depends on your goals and the scale of your business. For example, if you are a freelancer with a fairly high income, it is best to simply register as a sole proprietor and forget about the hassle. If you are engaged in serious business, have partners, suppliers, and a team of employees, it is worth considering a limited liability company. You free yourself, as an individual, from risks. You cannot simply take the income, as it is received by a legal entity. You can only receive dividends. We hope our article will help you decide on the form of business activity!
Start your business with aksis
Regardless of the form of business activity you choose, there are many nuances you need to be aware of. Both Sp. z o.o. and JDG have their own characteristics in everything, including taxation, registration, accounting, and much more. That is why the best solution is to have a reliable partner at your side, such as the aksis agency. We have years of experience and cooperation with clients throughout Poland. We will consult with you, select the optimal solution for you, and bring the matter to a successful conclusion. Opening an LLC or sole proprietorship in Poland? Changing the form of taxation? Financial reporting and much more? At aksis, we help with all issues!
