What social insurance contributions have to be paid by a foreigner running a business in Poland
Are you a foreigner wishing to run a business in Poland? Check in which country you will be subject to social insurance.
Who can run a business in Poland
You have the right to set up and run a business in Poland even if you are not a Polish citizen. In addition, you can offer or provide your services on a temporary basis or set up a branch or representative office of a foreign entrepreneur in Poland.
Remember! Depending on your status, in particular whether you are a citizen of the European Union or not, you can either have complete freedom to choose the form of your business or your choice will be limited to certain forms.
Read:
- what business activity can a foreigner conduct in Poland
- What are the different legal forms of running a business in Poland? One-person business activity and companies.
If you wish to run a business in Poland, you need to check where you will pay your social insurance contributions. The institution collecting and pooling social insurance contributions in Poland is the Social Insurance Institution - Zakład Ubezpieczeń Społecznych (ZUS).
Depending on your country of origin, you will be subject to different social insurance provisions and obligations. The extent of these obligations will vary for:
- citizens of the European Union (EU), the European Economic Area (EEA) and Switzerland,
- citizens of countries that are not members of the European Union,
- citizens of the United Kingdom of Great Britain and Northern Ireland.
Citizens of the European Union, the European Economic Area and Switzerland
Foreign nationals who are citizens of the European Union, the European Economic Area and Switzerland have freedom to set up a business in all countries of the European Union. They are treated in the same way as nationals of the Member State in which they set up their business, i.e. they are subject to the provisions and rules of that State.
The Member States of the European Union are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Spain, Sweden.
The Member States of the European Economic Area, apart from the Member States of the European Union, are: Norway, Iceland, Liechtenstein.
A person who pursues work activity in the capacity of an employed person or of a self-employed person in a Member State is, in accordance with the principle of the place of work, subject to the legislation of the State in which the work activity in the capacity of an employed person or of a self-employed person is pursued.
Read how to employ a citizen of the European Union, the European Economic Area or Switzerland (PL).
This means that you are subject to social and health insurance and have to pay contributions to the insurance system in the country where you work.
A person working in several countries
In the case of a citizen of the European Union, the European Economic Area or Switzerland working simultaneously in several countries who wishes to run a business in Poland, additional circumstances relating to their situation must be taken into account in order to determine which insurance regulations they will be subject to.
Remember! Regardless of whether a foreigner engages in business activity in several countries, they will be subject to only one social insurance system.
If you are a foreigner who engages in business activity in several countries belonging to the European Union, the European Economic Area or in Switzerland, the following rules apply to you:
- you are subject to the legislation of the state of your residence if you pursue a substantial part of your business activity in that state
Example
You are a French citizen and run a chain of patisseries in Paris. You have also opened one patisserie in the UK, where you start selling your pastries. In this situation, you are subject to social insurance in France.
- If you do not reside in the country where you pursue a substantial part of your business activity, you are subject to the legislation of the country where the centre of interest of your activity is located.
Example
You live in Germany, where you have opened a small traditional patisserie. In Paris, you run a chain of patisseries, which you develop, supply and use to enter into further business partnerships with new partners. In this situation, you are subject to French insurance regulations.
Important! The above rules are applicable both when your business activity is registered in only one country but you conduct it on the territory of several countries, and when your business activity is registered in various countries belonging to the European Union, the European Economic Area or in Switzerland.
Conducting temporary business activity in Poland
If you run a business in a country belonging to the European Union, the European Economic Area or in Switzerland, and you are only temporarily running a business in Poland, you are not obliged to register with the Polish insurance system.
The document that confirms that you do not have to apply Polish social insurance regulations is the A1 form. You will receive it from an institution equivalent to the Polish Social Insurance Institution in the state where you run your business on a regular basis. The form will show how long you are subject to the legislation of your state.
Remember! A1 form issued by an insurance institution of one European Union Member State is binding on institutions of other states. The exception is when A1 form is withdrawn or has been declared invalid.
Before starting temporary business activity in Poland, you must inform a branch of the Social Insurance Institution competent over the planned place of your business activity.
Check which branch of the Social Insurance Institution will be competent for your business (PL).
In addition, you should present the certificate of applicable legislation (A1) obtained in your state. This certificate must be certified by the Polish branch of the Social Insurance Institution.
In addition, a foreigner who is conducting temporary business activity in Poland must:
- comply with the requirements relating to running a business in the Member State in which the foreigner is registered,
- run a business in the foreigner's Member State for at least 2 months prior to starting a business in Poland,
- run a business in Poland that is similar to the one run in the foreigner’s home country (activity in the same industry, discipline, branch of the economy),
- maintain the infrastructure necessary to run a business in their country.
Important! Maintaining infrastructure is understood as using office space in the country of the foreigner’s regular business, paying taxes there or having a professional licence and VAT identification number.
Example
Helga runs a tailor’s shop in Germany. In Poland, she has opened a cleaning company. While working in Poland, Helga will be covered by insurance in Poland, as her business activity in Germany is not similar to the one run in Poland.
Example
Pierre runs a plumbing company in France. He has signed a contract with a Polish company to carry out plumbing work in a hotel in Poland. The work is scheduled to last 15 months. As the business activity that Pierre will carry out in Poland is similar in nature to the one he conducts in France and the posting period of the business activity does not exceed 24 months, Pierre will be insured in France.
Conducting temporary business activity in Poland may not exceed 24 months. After this period, if you still wish to run a business in Poland, you must start paying social insurance contributions under Polish regulations. However, there is an exception to this rule. An insurance institution from your country can apply on your behalf to the Polish Social Insurance Institution for an agreement on exception. If the Polish Social Insurance Institution accepts such a solution, you can continue paying contributions in your Member State.
If you know before you start your business in Poland that it will exceed 24 months, you can immediately apply to your insurance institution to have it enter into an agreement on your behalf for the entire duration of your business.
Combining work activity in the capacity of an employed person with running a business
If, as a foreigner, you are employed in a Member State of the European Union, the European Economic Area or in Switzerland and you wish to start a business in Poland, you will be subject to social insurance in only one of these states.
In such a situation, the applicable social insurance legislation will be the legislation of the country in which you are employed, that is working in the capacity of an employed person.
Example
A Czech employed by a telecommunications company in Prague decided to open a sales company in Poland. As he works in the capacity of an employed person in the Czech Republic, he will be subject to the social insurance system of that country.
Marginal work
If you are a foreigner working or engaging in business activity in more than one country, whether you are actually subject to the social insurance regulations of the country concerned may be questioned. This will happen if your work or business activity run in one Member State is considered to be marginal work.
Marginal work is work that is interpreted to be permanent but of little temporal or economic (profit) significance. This means that it takes up less than 5% of your regular working time or you earn less than 5% profit by doing it.
A person who performs marginal work in one Member State and also works in another Member State cannot be considered to be working on a regular basis in two or more Member States. Therefore, such a person will not be covered by the social insurance provisions of the state where they perform marginal work.
Example
A Bulgarian works in two countries: in Bulgaria at the FAZ company, and in Poland he engages in business activity. As the foreigner works in the capacity of an employed person in Bulgaria, the Bulgarian insurance provisions should apply to him. However, if the remuneration from his work there is less than 5% of the income that he earns, this work will be considered marginal work, and he will also have to register for social insurance in Poland. He will be deemed to be working exclusively in Poland and must pay contributions here on all income earned from all types of activity.
Running a business exclusively in Poland
If you are a foreigner from a country of the European Union, the European Economic Area or from Switzerland and you run a business exclusively in Poland, while at the same time you do not perform work in the capacity of an employed person in any other country, you are subject to compulsory insurance in Poland in the same way as other Polish entrepreneurs. This means that you have to register for insurance in Poland and pay insurance contributions in Poland.
Read how to register with the Social Insurance Institution (ZUS).
What type of insurance non-EU citizens are subject to
If you are a citizen of a country outside the European Union, the European Economic Area and of Switzerland, in order to undertake professional activities, including business activity, you must have a residence title that entitles you to do so.
Check what type of residence title entitles you to register business in CEIDG.
If you wish to run a business in Poland, you will be subject to Polish social insurance on a compulsory basis.
Important! There is an exception to this rule. If Poland has an agreement with your country under which you can remain in the insurance system in the country of your residence, this exempts you from registering with the Polish social insurance system.
Social insurance for partners in partnerships and single-member limited liability companies
A foreigner who is a partner in a single-member limited liability company or a partner in a general partnership, limited partnership or partnership will be treated as a person running a business, and is therefore subject to compulsory social insurance in Poland.
However, if a foreigner works in the capacity of an employed person in their country or has another social insurance title in that country, such as the right to an old-age pension, they are not subject to compulsory social insurance in Poland.
Still, health insurance will be compulsory.
Read more about entrepreneurs registering for insurance.
How to register a business as a contribution payer with the Social Insurance Institution (ZUS)
In Poland, the registration of a one-person business by a foreigner is free of charge and the registration process is the same as for Polish citizens.
You must register your one-person business with the Central Registration and Information on Business (CEIDG). You can do this in a number of ways, including online through business.gov.pl. You can also submit an application in person at any city or municipal office.
Read how to start a one-person business
On the basis of your entry in CEIDG, the Social Insurance Institution will automatically enter you in the register of contribution payers and record information about your settlements in the payer’s account. It will also send information on the number of your contribution account in the Social Insurance Institution to your mailing address.
The Social Insurance Institution will prepare for you:
- ZUS ZFA – your application as the contribution payer,
- ZUS ZBA – information on your bank accounts as the contribution payer,
- ZUS ZAA – information on your business addresses.
Remember! Should the data in CEIDG change, the Social Insurance Institution automatically updates the data in its system.
If you are starting a business that is subject to registration with the National Court Register (KRS), the Social Insurance Institution will itself register you as a contribution payer (on the ZUS ZPA form) after obtaining your supplementary data from the tax office.
In the National Court Register you need to register: partnerships: general partnership, partnership, limited partnership, limited joint-stock partnership, commercial companies: limited liability company and joint-stock company, European companies and a branch of a foreign entrepreneur.
Note! International agreements between individual states and Poland may impose additional restrictions or entitlements on the possibilities of running a business. Make sure that there is no international agreement in force with respect to the foreigner’s country of origin that regulates this matter.
Read how to register with the Social Insurance Institution (ZUS).
How to register yourself and your employees with the Social Insurance Institution (ZUS) for insurance
If you are a foreigner and run a business, you must register yourself as an insured person within 7 days of starting your business.
If your business is subject to an entry in CEIDG or you are a partner in a single-member limited liability company, a partner in a limited partnership, in a general partnership or a partnership, register:
- on the ZUS ZUA form – for social insurance and health insurance, from the day you start your business
- on the ZUS ZZA form – for health insurance.
If you employ employees, contractors or persons who will assist you in the business, you have 7 days from the time they start working (employee/contractor) or start assisting in the business (family and household members assisting in the business) to register them.
Read how to register with the Social Insurance Institution and for insurance.
Remember! If you run several companies, you settle the contributions for your employees in one set of documents.
What types of social insurance contributions you have to pay in the Social Insurance Institution (ZUS)
As an entrepreneur, you must settle and pay contributions for yourself to the Social Insurance Institution as follows:
- social insurance, of which old-age pension, disability and accident insurance are compulsory and sickness insurance is voluntary,
- health insurance,
- Labour Fund (FP) and Solidarity Fund (FS).
If you have registered and run a company in Poland and want to hire employees, you are bound by the same settlement rules with the Social Insurance Institution as the rules applicable to Polish entrepreneurs.
For your employees, you pay the following contributions:
- social insurance: old-age pension, disability, accident, sickness
- health insurance
- Labour Fund (FP) and Solidarity Fund (FS)
- Guaranteed Employee Benefits Fund (FGŚP)
- Old-age Bridging Pension Fund (FEP) – if you employ employees who were born after 31 December 1948, work in special conditions or perform work of a special nature.
Important! Entrepreneurs who are just starting a business or closed their previous business at least 60 months earlier and do not plan to provide services to their former employer for the first six months of their business activity can benefit from a relief for starting a business. After 6 months, you can take advantage of another option to reduce your contribution and pay reduced contributions on a preferential base for 24 months.