Author Archives: diwafaCrostasp

Tax Incentives for IT businesses in Poland

Poland has long stood out as a strategic hub for the IT sector in Europe. With a great pool of highly skilled developers, a supportive business environment, and competitive operating costs, the country has evolved into a hotspot for tech innovation. A key factor in attracting both startups and established enterprises to Poland is its range of tax incentives aimed at encouraging growth in innovative industries, particularly in IT.

Why Poland is Ideal for IT Relocation or Expansion?

  • Skilled Workforce – Poland offers a large pool of highly educated developers, data scientists, and engineers, recognized globally for their technical expertise
  • Competitive Costs – Lower labor and office costs than in Western Europe or the US allow more efficient use of capital
  • Government Support – The incentives described, such as R&D relief and IP Box, show an ongoing commitment from government authorities to foster innovation and economic growth
  • Strategic Location – As a member of the EU, Poland provides easy access to both Western and Eastern European markets, backed by strong logistics and infrastructure.

This article outlines the most significant tax preferences that can benefit IT businesses in Poland, highlighting the eligibility criteria, application processes, and strategic advantages they offer. Whether you are looking to set up a new IT venture or relocate your existing operations to Poland, these incentives can considerably reduce your tax burden and improve your bottom line.

1. Lump-Sum Tax (Ryczałt) for IT Professionals

A major highlight of Poland’s tax system for self-employed programmers and IT consultants is the lump-sum tax (ryczałt). This simplified form of taxation focuses on gross revenue instead of net income (revenue minus costs). Many IT services such as software development, network administration, and web design can qualify for this scheme.

  • Typical Rates:
    • 12% lump-sum on revenue for most programming, software consulting, or coding activities
    • 8.5% can apply to certain IT-related services not explicitly classified under programming or consulting (for example, project coordination, testing, or specialized management roles), provided they align with specific tax codes.
  • Key Benefits:
    • Low effective rate compared to standard personal income tax (which can reach 32% under the progressive scale) or the 19% flat tax
    • Ease of Administration since deductible costs are not itemized, resulting in more straightforward compliance.
  • Points to Remember:
    • Confirm the correct Polish Classification of Goods and Services (PKWiU) code for your activities
    • If uncertain, consider obtaining a binding GUS opinion on classification or an individual tax ruling to ensure proper application of the lump-sum rate.

This can be an attractive option for individual IT contractors, freelancers, or single-person companies looking to maintain low tax rates and minimal administrative burdens.

2. Research & Development (R&D) Tax Relief (Ulga B+R)

Poland’s R&D tax relief, commonly referred to as Ulga B+R, rewards businesses that engage in innovative, knowledge-intensive activities. Most software houses and tech companies involved in product development, coding, or advanced solutions can benefit from this deduction.

  • How It Works:
    • Qualifying R&D costs are treated as normal business expenses
    • You can then deduct them again (partly or fully) under the R&D relief, effectively doubling (or sometimes even tripling) the tax benefit for the same expenses.
  • Examples of Eligible Costs:
    • Salaries for developers and engineers engaged in R&D projects (up to 200% of these costs can be deducted in some cases)
    • Specialist software licenses or new hardware dedicated to R&D
    • Raw materials or prototypes for testing new software products.
  • Key Requirements:
    • Projects must fit the legal definition of research and development, implying novelty and systematic efforts aimed at creating new applications or advancing knowledge
    • Comprehensive documentation of R&D expenses is essential
    • R&D relief applies to both CIT (corporate income tax) and PIT (personal income tax) payers.

For IT companies that regularly push innovative software solutions, this can provide substantial tax savings, especially when combined with other incentives.

3. IP Box (Innovation Box) – 5% Tax Rate

The IP Box regime is one of the most appealing tax incentives in Poland, offering a 5% tax rate for income derived from qualifying intellectual property (IP) rights, particularly computer software and other proprietary tech solutions.

  • Eligibility Criteria:
    • The IP, for example software code or advanced algorithms, must result from your own R&D activities conducted in Poland
    • Only the income derived from these qualified IP rights is taxed at 5%. Other income remains subject to standard rates.
  • Examples of Qualified Income:
    • Licensing fees for software patents or unique code
    • Royalties from proprietary solutions
    • Revenue from integrated software products offered as part of larger services.
  • Practical Tips:
    • IP Box is claimed at the end of the tax year, through the annual tax return
    • Maintaining detailed documentation to prove the link between R&D work and the resulting IP is crucial
    • IP Box can be combined with R&D tax relief, resulting in significant overall reductions in your tax liability.

For innovative IT firms seeking to monetize proprietary software or advanced technology solutions, IP Box provides a very competitive tax rate.

4. 50% Author’s Costs for Creative Work

Polish tax law allows 50% tax-deductible costs for workers performing creative tasks, which includes software development, provided that authorship rights are transferred to the employer.

  • Who Qualifies::
    • Programmers writing original code
    • Designers and architects of complex IT systems creating intangible creative output.
  • Implementation:
    • Typically used in employment contracts or certain contract-for-service arrangements
    • Must clearly outline transfer of authorship rights and indicate what portion of compensation is tied to creative output.
  • Tax Benefit:
    • Doubles the standard deduction from 20% to 50%, reducing the taxable base on that portion of compensation
    • Annual limit of 120,000 PLN may apply to the overall 50% cost deduction.

By structuring developer agreements correctly, IT employers can improve employee retention and reduce tax costs for both the company and its creative contributors.

5. VAT OSS for Cross-Border Digital Services

IT companies that sell digital goods or services (such as app subscriptions or cloud-based software) to individual EU customers benefit from the VAT One-Stop Shop (OSS).

This system simplifies cross-border VAT compliance by:

  • Reducing the need to register for VAT in multiple EU countries once sales cross a common threshold
  • Allowing a single VAT return submission in Poland for all B2C EU transactions
  • Requiring quarterly consolidated reports, saving time and administrative costs.

This is especially beneficial for SaaS providers, mobile app developers, and e-commerce platforms targeting EU-based consumers.

FAQ: Common Questions About Tax Incentives for IT Businesses

Yes. Income from qualified IP can be taxed at the 5% IP Box rate, while expenses related to R&D activities may qualify for additional deductions through Ulga B+R. Maintaining solid documentation is key.

Conclusion

If you are considering establishing or relocating your IT venture to Poland, the Adwisen team is ready to guide you through the entire process.

Contact us today to discover how Poland can help you reduce taxes and supercharge your IT business. We look forward to supporting your success in one of Europe’s most dynamic and forward-thinking tech ecosystems.

Purchasing Real Estate in Poland as a Foreigner

Poland’s growing economy and central position in Europe make it an attractive destination for foreign investors and individuals looking to purchase real estate. However, buying property in Poland as a foreigner involves specific legal requirements and procedures. This guide provides detailed information to help you understand the process of acquiring real estate in Poland.

Who Is Considered a Foreigner Under Polish Law?

Under Polish law, a foreigner is defined as:

  • Individuals – a person who does not hold Polish citizenship
  • Legal Entities – companies or organizations with their registered office outside Poland
  • Foreign Partnerships – partnerships without legal personality but with legal capacity, established abroad according to foreign laws
  • Controlled entities in Poland – legal entities or partnerships based in Poland but controlled directly or indirectly by foreign individuals or entities mentioned above.

What Constitutes Acquisition of Real Estate?

Acquisition includes obtaining ownership or perpetual usufruct rights to real estate through any legal event, such as:

  • Purchase Agreements – sales, exchanges, or donations
  • Legal Decisions – administrative decisions or court judgments
  • Inheritance – acquisition through wills or statutory inheritance
  • Transformation of rights – conversion of cooperative rights into ownership rights.

Acquiring a share in a property or entering into co-ownership (including marital joint property) is also considered an acquisition.

Do You Need a Permit to Purchase Property?

In general, foreigners need a permit from the Minister of the Interior and Administration to acquire real estate in Poland. This permit is an administrative decision granting consent for the transaction.

Exceptions: When a Permit Is Not Required

You do not need a permit in the following cases:

  • Citizens and Entrepreneurs from the EEA and Switzerland
    • If you are a citizen or an entrepreneur from the European Economic Area (EEA) (which includes EU countries, Norway, Iceland, and Liechtenstein) or Switzerland, you can purchase property in Poland without a permit
  • Acquisition of Certain Types of Property:
    • Residential apartments – Buying a standalone residential unit
    • Garage spaces – acquiring a garage or a share in a garage, if it serves your residential needs.
  • Long-Term Residents:
    • Five-Year Residency – foreigners who have lived in Poland for at least five years after obtaining a permanent residence permit or long-term EU resident status
    • Spouses of Polish Citizens – foreigners married to Polish citizens, living in Poland for at least two years after obtaining a permanent residence permit or long-term EU resident status, acquiring property that will become part of marital joint property.
  • Close Relatives:
    • Acquiring property from a person to whom you are entitled to inherit by law (statutory inheritance), provided the seller has owned or held perpetual usufruct of the property for at least five years.
  • Special Entities:
    • Certain banks acquire property through debt recovery processes.

Important Notes:

  • Border zones and agricultural land -the above exemptions do not apply if the property is located in a border zone or is agricultural land exceeding 1 hectare.
  • Inheritance – generally, you do not need a permit to inherit property if you are a statutory heir. However, if you inherit through a will and are not a statutory heir, a permit is required.

Conditions for Obtaining a Permit

To be granted a permit, the following conditions must be met:

  • No Threat to National Interests
    • The acquisition must not pose a threat to defense, state security, public order, or public health.
  • Proof of Ties to Poland
    • You must demonstrate circumstances confirming your connection with Poland. These can include:
      • Polish origin or nationality – possessing Polish roots or heritage
      • Marriage to a Polish citizen – being legally married to a Polish national
      • Residence permits – holding a valid temporary residence permit (excluding certain types), permanent residence permit, or long-term EU resident status
      • Economic activities – conducting business or agricultural activities in Poland in accordance with Polish law
      • Corporate involvement – being a member of the management board of a company based in Poland and controlled by foreigners.

Special Considerations

  • Property Size Limits
    • Personal Use:
      • Properties for personal residential use should not exceed 0.5 hectares
    • Business Use:
      • The property’s size should correspond to the actual needs of your business or agricultural activities.

Agricultural Land and Border Zones

  • Acquiring agricultural land over 1 hectare or properties in border zones may have stricter regulations and may require additional approvals or conditions.

Key Points

  • Start Early
    • Begin the application process well in advance of any contractual deadlines
  • Complete Documentation
    • Ensure all required documents are complete and accurately translated to avoid delays
  • Stay Informed
    • Laws and regulations may change; keep updated on any legislative changes that may affect your application
  • Consult Authorities
    • For any uncertainties, consult directly with the Ministry of the Interior and Administration or legal experts.

 

Legal Assistance

Purchasing real estate in Poland as a foreigner involves adhering to specific legal requirements designed to balance national interests with foreign investment opportunities. By understanding the obligations and preparing thoroughly, you can successfully acquire property in Poland.


Contact Adwisen for expert guidance through every step of the process. 

Legal Geek Conference – London 2024

On 16-17 October 2024, Adrianna Skolimowska and Katarzyna Rodzik – Samsonowicz of our legal team had the privilege of attending the Legal Geek Conference in London. This annual event is a key gathering for professionals passionate about the intersection of law and technology. 

 

This year’s conference was particularly noteworthy, with a strong emphasis on Artificial Intelligence (AI) and its transformative impact on legal tech.

Highlights of the Conference

The Legal Geek Conference brought together a remarkable assembly of industry experts, innovators, and thought leaders from around the globe. The agenda was packed with insightful presentations, panel discussions, and keynote speeches covering a broad spectrum of topics within legal tech.

Notable sessions included:

  • Emerging trends in legal AI – experts discussed the latest developments in AI applications, including machine learning algorithms for legal research and predictive analytics.
  • Data privacy and security – with increasing concerns over data breaches, sessions focused on ensuring compliance with regulations like GDPR while leveraging technology.
  • Regulatory technology – exploring tools that help businesses stay compliant with evolving laws and regulations efficiently.

The conference also featured interactive workshops where attendees could engage hands-on with new technologies, such as AI-driven contract analysis tools.

Networking Opportunities

Beyond the formal sessions, the conference offered unique networking opportunities. Interactive side events and social gatherings allowed our team to connect with like-minded professionals, share insights, and explore potential collaborations. These interactions provided valuable perspectives on how other firms are integrating technology into their practices.

But What Actually is Legal Tech?

Legal tech includes a wide range of technologies designed to streamline and enhance the delivery of legal services. It includes software and platforms that automate routine tasks, facilitate legal research, manage case documents, and improve communication between legal professionals and clients. The goal of legal tech is to make legal services more accessible, efficient, and cost-effective.

Transformative Role of AI in Legal Tech

Artificial Intelligence is at the forefront of legal tech innovation. Its capabilities extend far beyond automation, enabling more sophisticated analysis and decision-making processes.

Here are some key areas where AI is making a significant impact:

  • Advanced legal research – AI-powered research tools can sift through extensive amounts of legal data, case laws, and statutes to find relevant information quickly. Natural Language Processing (NLP) allows these tools to understand context and nuances in legal language, providing more accurate and comprehensive results than traditional keyword searches.
  • Document automation and analysis – AI can streamline contract review and management by analyzing contracts to identify clauses, obligations, and potential risks, speeding up the review process and ensuring consistency across documents. Additionally, during mergers and acquisitions, AI tools can quickly assess large volumes of documents to identify liabilities and compliance issues, enhancing the efficiency of due diligence.
  •  Predictive analytics – AI algorithms can analyze historical case data to predict outcomes of legal proceedings. This assists lawyers in developing strategies, assessing the merits of a case, and advising clients on the likelihood of success.
  • Virtual assistants and chatbots – AI-powered chatbots can handle routine client inquiries, schedule appointments, and provide updates on case statuses. This improves client engagement and frees up time for legal professionals to focus on more complex tasks.
  • Compliance monitoring – AI systems can continuously monitor changes in laws and regulations, alerting businesses to new compliance requirements. This proactive approach helps prevent legal issues before they arise.

Benefits for Adwisen's Clients

For our clients—foreign investors aiming to establish or expand their businesses in Poland—the integration of AI and legal tech into our services offers substantial benefits:

  •  Efficiency and speed– Time is often a critical factor in business decisions. AI accelerates the processing of legal documents, permits, and applications, reducing the time it takes to establish operations in Poland. Faster turnaround times mean our clients can capitalize on market opportunities more quickly.
  • Cost-effectiveness – By automating routine tasks, we can reduce the operational costs associated with legal services. These savings are passed on to our clients, providing high-quality services at more competitive rates.
  • Enhanced accuracy and risk mitigation – AI minimizes the risk of human error in document preparation, contract analysis, and compliance monitoring. This leads to more accurate outcomes and reduces the likelihood of legal disputes or regulatory penalties.
  • Personalized and strategic advice – With AI-driven insights, we can offer more tailored advice that aligns with each client’s unique business objectives and risk profile. Predictive analytics enable us to forecast potential challenges and opportunities specific to the Polish market.
  • Improved accessibility – Technologies such as virtual assistants and online platforms make it easier for clients across different time zones to access our services and receive timely updates.

Our Commitment to Data Security

We understand that confidentiality and data security are paramount in the legal industry.

At Adwisen, we use only top-quality software that ensures the complete security of our clients’ data. Our technology solutions are selected not only for their efficiency and innovation but also for their reliable security features that comply with the highest industry standards.

Adwisen's Commitment to Innovation

At Adwisen, we recognize that embracing technological advancements is key to providing the best services.

Our participation in the Legal Geek Conference reflects our dedication to staying at the forefront of industry developments.

We are continuously exploring innovative solutions to enhance our service offerings, including:

  • Investing in AI technologies – We are evaluating and adopting AI tools that can improve our efficiency and the quality of our services. This includes advanced document management systems, compliance software, and client communication platforms.
  • Training and development – Our team is committed to continuous learning. By attending conferences like Legal Geek, we ensure our professionals are knowledgeable about the latest technologies and how to leverage them effectively.
  • Collaborative partnerships – We are open to collaborating with tech providers and other law firms to develop and implement cutting-edge solutions that benefit our clients.

Looking Ahead

The legal industry is in the process of a technological revolution, and AI is a significant driver of this change.

For businesses entering the Polish market, partnering with a forward-thinking firm like Adwisen means gaining access to the most advanced legal support available.

We are excited about the future and the opportunities that legal tech and AI present. By integrating these technologies into our practice, we aim to enhance the value, efficiency, and effectiveness of our services – all while ensuring the utmost security and confidentiality of client information.

If you are considering expanding your business into Poland and would like to learn more about how Adwisen can support you with innovative and secure legal solutions, please do not hesitate to contact us.

LLC Management Board Members’ Liability

A limited liability company (LLC) is one of the most popular forms of conducting business in Poland, mainly due to the limited liability of shareholders for the company’s obligations. This feature is also present in other capital companies, including the simple joint-stock company. However, establishing an LLC is the easiest and quickest—it requires an initial share capital of just 5,000 PLN.

Besides the shareholders, who are the owners of the company, there is a management board appointed by them. The shareholders themselves are not liable for the obligations or actions related to the company. A significantly larger portion of responsibility in an LLC lies with the management board members. The issue of the board’s obligations towards the company is more complex, so in this article, we will attempt to shed light on this topic.

The Basic Role of the Management Board in a Limited Liability Company

As mentioned at the beginning, shareholders are not responsible for the company’s daily operations. Their main role is to make decisions on key, strategic matters for the company.

The management board appointed by the owners is responsible for running the company’s affairs and representing it externally. Basic duties include, among others, ensuring proper accounting, timely submission of financial statements, and acting in the company’s interest.

Management Board Member Liability for Company Obligations

When a company incurs debt, such as borrowing money, the debtor is the company itself, not its shareholders. Therefore, the company’s creditor cannot demand repayment of that debt from the shareholders. When the company’s funds are insufficient to cover the debt, the entire responsibility falls on the management board members, who must cover the company’s obligations with their personal assets.

How does this work?

If execution against the company’s assets proves ineffective, the management board members are jointly and severally liable for the company’s financial obligations with all their personal assets.

Management Board Member Liability for Damage

Who Is Liable?

Liability for damage applies to:

  • Members of the Management Board
  • Members of the Supervisory Board
  • Liquidators.

Note: Shareholders acting solely as owners are typically excluded, unless they also serve in one of the roles above. The provision does not extend to proxies or attorneys-in-fact appointed for specific tasks.

Principles of Liability

Liability arises from actions or omissions that are:

  • Contrary to Law

Violations of statutory provisions, including the Commercial Companies Code and other relevant laws.

  • Contrary to the Company’s Articles of Association

Breaching internal regulations or failing to follow required procedures.

This liability is contractual, based on the relationship between the company and its bodies members, and can be both joint and several, when harm results from collective actions of the company’s bodies.

Modifying Liability

Companies and their bodies members can agree to modify liability terms, potentially imposing stricter obligations than those required by law.

Exoneration from Liability

To such avoid liability individuals must demonstrate:

  • Absence of Fault

They performed their duties properly and did not cause harm.

  • Due Diligence

They exercised the care expected of professionals in their position.

Elevated Standard of Care

Management board members are held to a higher standard of care due to the professional nature of their duties, which includes:

  • Knowledge of Company Operations and Finances
  • Compliance with Legal Obligations
  • Active Oversight and Management.

Ignorance of financial issues or lack of necessary expertise does not absolve one from liability.

The Business Judgment Rule

The “business judgment rule” protects board members from liability for decisions that harm the company if those decisions were:

  • Made Loyally

In good faith and with the company’s best interests in mind

  • Within Justified Business Risk

Based on reasonable information, analysis, and appropriate under the circumstances.

This rule recognizes that business decisions inherently involve risk and aims to encourage prudent decision-making without fear of undue liability.

Does This Liability Expire?

Yes, the statute of limitations also applies to this liability.

In the event of liability of a member of the management board of a limited liability company a three-year limitation period applies. The claim becomes time-barred after three years from the date on which the injured party learned, or with due diligence could have learned, about the damage and the person obliged to repair it. However, this period cannot be longer than ten years from the date on which the event causing the damage occurred.

It is therefore important to determine exactly when the limitation period begins.

Does the Vote of Approval Have an Impact on the Liability?

The liability of members of bodies may also be affected by granting them a vote of approval. However, this is not a necessary relationship. There are cases where a vote of approval, although granted, does not exclude liability.

Criminal Liability of Management Board Members

If a management board member knowingly fails to file a bankruptcy petition, they may face criminal liability. According to the Penal Code, for acting to the detriment of the company’s creditors, a management board member can be sentenced to a fine, restriction of liberty, or even imprisonment. Such sanctions aim to prevent situations where management board members deliberately avoid filing for bankruptcy to conceal the company’s difficult financial situation.

Management Board Liability for Tax and Social Security Obligations

The members of the management board are jointly and severally liable for tax and social security of a limited liability company or a limited liability company in organization with all their assets, if enforcement against the company’s assets turned out to be wholly or partially ineffective.

The members of the management board are jointly and severally liable for tax arrears of a limited liability company or a limited liability company in organization with all their assets, if enforcement against the company’s assets turned out to be wholly or partially ineffective, and a management board member has not demonstrated that:

  • A bankruptcy petition was filed in due time or restructuring proceedings were opened or an arrangement was approved in the arrangement approval proceedings
  • The failure to file a bankruptcy petition was without his fault.

As well as does not indicate the company’s property from which enforcement will enable a significant part of the company’s tax arrears to be satisfied.

Circumstances Excluding Board Members' Liability

A management board member can exonerate themselves from liability if they can prove that:

  • Timely Filing of Bankruptcy Petition or Opening of Restructuring Proceedings

A bankruptcy petition was filed on time, or a decision to open restructuring proceedings or approve an arrangement in arrangement approval proceedings was issued within the same timeframe. The management board should file a bankruptcy petition within 30 days from the day the company became insolvent.

  • Lack of Fault in Failing to File for Bankruptcy

The board member should have exercised due diligence stemming from the professional nature of their activities and maintained loyalty to the company. If, during their tenure, the grounds for declaring bankruptcy arose and they did not file the petition, they should demonstrate that they were not at fault in this omission. Evidence of no fault might include prolonged illness or being denied access to the company’s information, provided they took steps to obtain such information.

  • Creditor Did Not Suffer Damage Despite Failure to File for Bankruptcy

The absence of damage means that, despite not filing the petition on time, the creditor’s ability to satisfy their claims from the company’s assets did not diminish.

Regardless of these conditions, a board member can always raise the defense of set-off or statute of limitations.

Procedure for Creditors Seeking Liability

Creditors can pursue monetary claims by filing a lawsuit at the court competent for the domicile of the defendant board member. However, the right to effectively seek compensation is limited by time.

Claims for damages caused by a tort expire three years from the date the injured party learned or, exercising due diligence, could have learned about the damage and the person obliged to repair it. Nevertheless, this period cannot exceed ten years from the date the event causing the damage occurred. Independently, the claim against the company may also become time-barred.

Bankruptcy Law Liability

Creditors can pursue monetary claims by filing a lawsuit at the court competent for the domicile of the defendant board member. However, the right to effectively seek compensation is limited by time.

Claims for damages caused by a tort expire three years from the date the injured party learned or, exercising due diligence, could have learned about the damage and the person obliged to repair it. Nevertheless, this period cannot exceed ten years from the date the event causing the damage occurred. Independently, the claim against the company may also become time-barred.

  • Failure to File for Bankruptcy

They did not file a bankruptcy petition within the statutory period, despite being obliged to do so by law.

  • Contributing to Failure to File

They significantly contributed to not filing a bankruptcy petition on time while actually managing the debtor’s enterprise.

  •  Failure to Hand Over Assets Post-Bankruptcy

After the bankruptcy declaration, they did not hand over or indicate the assets, accounting books, correspondence, or other documents of the bankrupt entity, including electronic data, which they were obliged to submit by law.

Conclusion

The liability of management board members – including financial liability – is primarily associated with the violation of basic duties related to performing functions on the management board. These include initiating bankruptcy or restructuring proceedings in a timely manner. In practice, the initiation of these proceedings is the basic circumstance that allows a member of the management board to be free from the need to repay the company’s debts from private assets.

Note: this article does not constitute legal advice.

If you are interested in the liability of members of the management board of a limited liability company, schedule a consultation with us! We offer extensive knowledge supported by many years of experience.

Unregistered Business Activity in Poland

To explain what unregistered business activity in Poland is, it’s first necessary to understand what registered business activity is—namely, non-agricultural economic activity.

Economic Activity in Poland

Economic activity refers to organized profit-making activities conducted in one’s own name and on a continuous basis. A profit-making activity is one that is conducted with the intent of generating profits. The organized nature of the activity is demonstrated by its execution using specific material or immaterial resources.

An activity is considered to be conducted in one’s own name when the entity organizing it does so for their own benefit and bears responsibility for any obligations incurred. An activity is considered continuous when it is carried out regularly and repeatedly.

Entrepreneur in Poland - Legal Definition

An entrepreneur is a natural person, a legal entity, or an organizational unit without legal personality to which a separate law grants legal capacity, engaged in economic activity. Partners in a civil law partnership are also considered entrepreneurs in the scope of the business activities they conduct.

What is Unregistered Business Activity?

Unregistered business activity is not considered economic activity if it is conducted by a natural person whose monthly revenue from this activity does not exceed 75% of the minimum wage, and who has not conducted economic activity in the last 60 months.

The regulations concerning unregistered activity do not apply to activities carried out under a civil law partnership agreement. Additionally, unregistered activity cannot involve activities that require a license, permit, or registration in a regulated activity registry.

It’s important to note that this refers to the revenue due in a given month, not necessarily the amount actually received that month. Revenue from economic activity is considered to include amounts due, even if not yet received, excluding the value of returned goods, discounts, and rebates.

Unregistered Business Activity - Foreigners’ Rights

There are no regulations prohibiting or restricting foreigners who are legally residing in Poland from conducting unregistered business activity, provided they meet the general conditions for this activity (the same as for Polish citizens).

However, once the revenue limit is exceeded, the foreigner has to register sole proprietorship and therefore must meet the conditions to do so.

Third Country Nationals Restrictions

Citizens of countries that are not members of the European Union and the European Economic Area may set up their own sole proprietorship in Poland if they have a residence title that entitles them to do so.

Check our Step-by-step guide to setting up a one-person business in Poland

Is a Person Conducting Unregistered Business Activity Considered an Entrepreneur?

Since this activity is not considered economic activity, the entity conducting it is not an entrepreneur. If the conditions specified in the regulations are met, a natural person conducting an activity that does not constitute economic activity under the law is not required to apply for registration in the Central Registration and Information on Economic Activity (CEIDG).

Does Unregistered Business Activity Entitle One to Social and Health Insurance?

Unregistered business activity is not considered economic activity and therefore does not entitle one to social or health insurance. A natural person conducting unregistered activity is not required to:

  • Register for social and health insurance or health insurance alone
  • Register as a payer of contributions for their insurance under social insurance regulations.

What Happens if a Person Conducting Unregistered Business Activity Exceeds the Revenue Limit?

If the limit of 75% of the minimum wage is exceeded in any given month, the person is required to submit an application for registration in CEIDG within 7 days of the day the limit was exceeded. In this case, the activity becomes economic activity starting from the day the revenue limit was exceeded.

Tip: From 1 July to 31 December 2024 the limit equals PLN 3,225 per month. Starting 1 January 2024 the limit will be PLN 3 469,50.

Unregistered Business Activity - Legal Obligations

When conducting unregistered business activity, one is required to:

  • Keep a simplified sales record
  • Settle the revenue from unregistered business activity (after deducting costs) in the annual PIT-36 tax return according to the tax scale
  • Issue invoices or receipts upon the buyer’s request
  • Adhere to consumer rights, including the right to withdraw from a distance contract within 14 days and to fulfill obligations related to complaints, returns, or repairs.

Settling Unregistered Business Activity

It will not be possible to settle unregistered activities if you have not kept appropriate records of income.

You do not have to report the start of your business to the tax office, but keeping simplified records is your responsibility. Sales documents or incurred costs, issued invoices, transfer confirmations – these will be the basis for submitting a declaration and calculating the personal income tax on unregistered activities that must be paid. This is important because without records, the tax office will independently determine the sales value and may calculate a higher tax on the determined amount.

Unregistered Business Activity - Taxes

Conducting unregistered activities is not exempt from the obligation to pay income tax on the income earned, as revenues from such activities are not exempt from tax.

Unregistered Business Activity – which PIT?

One of the privileges of running an unregistered business is the frequency of tax settlements. It is not conducted on a monthly or quarterly basis, but only once a year. Income from running a small business must be reported in PIT-36 return.

Unregistered activities do not have to be reported to any office. The Tax Office will learn about your business from your tax return.

Unregistered Business Activity and VAT

According to the VAT Act, unregistered business activity is also considered economic activity. In practice, this means that a natural person who decides to run a business in this form is a VAT taxpayer.

The essence of unregistered business activity is its small scale. Those conducting such activity, like any entity earning income not exceeding PLN 200,000 per year, have the right to benefit from VAT exemption.

Who Doesn’t Qualify for VAT Exemptions?

However, it should be noted that some entities are excluded from benefiting from VAT exemptions regardless of their revenue level. This includes suppliers of precious metal products, most goods subject to excise tax, new means of transport, as well as computers and electronic devices.

Additionally, persons providing advisory, legal, jewelry, and bailiff services are also excluded from the VAT exemption.

Furthermore, individuals without a business seat in Poland must register as active VAT taxpayers.

Obligations for VAT-Exempt Unregistered Businesses

Those who conduct unregistered business activity and benefit from VAT exemption are required to maintain a daily sales record. This document should be updated systematically, no later than before the first sale on the following day. Its content is very simplified compared to records kept for VAT purposes. The document includes a serial number, date, and value of sales, as well as cumulative sales value.

Owners of unregistered businesses exempt from VAT are not required to issue invoices (unless requested by the client, no later than 3 months from the end of the month in which the transaction was completed).

Can Unregistered Business Activity Include Online Sales?

Unregistered business activity is an excellent solution if your online store is intended only as an additional source of income or if you want to grow your business slowly without initially aiming for high sales figures. Sales do not have to be limited to the form of an online store, though. Marketplace platforms like Amazon, Allegro, or eBay are also convenient, allowing sales by individuals who do not operate a registered business, as detailed in the regulations of these portals.

DAC7 Directive - Online Trade Reporting Rules Effective from July 2024

Starting 1 July 2024 regulations implementing the DAC7 directive, which regulates the issue of online trade reporting, entered into force in Poland.

The reporting obligation covers platforms enabling the rental of real estate or parking spaces, personal provision of services, sale of goods and rental of means of transport. Reports to the Head of the National Tax Administration will include users of e.g. Vinted, OLX or Airbnb who made at least 30 transactions or whose revenue from sales on the platform exceeded EUR 2,000 annually.

Seller Responsibilities Under DAC-7

The DAC-7 directive brings new obligations for sellers, particularly those using marketplace platforms, requiring them to be aware of updated rules. While these changes do not introduce additional taxes, they do increase transparency in online sales, potentially drawing more attention from tax authorities.

Clarifying Misconceptions: What DAC-7 Doesn’t Mean for Sellers

Sellers should note that DAC-7 does not create new tax burdens. Moreover, even if a platform reports data for sellers who exceed 29 transactions or earn more than EUR 2,000 annually, this does not automatically require registering as a business. Sellers should understand that platforms are required to request necessary data, but they are not obliged to proactively provide it unless asked.

Consequences of Non-Compliance

Non-compliance with DAC-7 regulations can lead to financial penalties for platforms and restrictions for sellers. Sellers should be aware of potential risks and prepare accordingly. The penalties for sellers have been moderated, with a phased approach now in place. If sellers fail to provide requested data in time, the platform will first withhold payouts. Only if further non-compliance occurs will sales activities be suspended. Initially, both sanctions were to be imposed at once, which would have made it difficult for sellers to continue operating smoothly.

Summary

  • Foreigners Can Also Start Small – if you’re a foreigner legally residing in Poland, you can engage in unregistered business activity under the same conditions as Polish citizens. However, exceeding the revenue threshold requires you to register as a sole proprietor.
  • Revenue Limits – if you’re conducting unregistered business activity, make sure your monthly revenue does not exceed 75% of the minimum wage. Keep track of this carefully, as exceeding the limit requires you to register your business within 7 days.
  • Simplified Record Keeping – keep a daily sales record with basic details like serial numbers, dates, and sales values. It’s a simplified version compared to registered businesses, but necessary for accurate reporting.
  • Tax Obligations – even though you’re not required to register as a business, you still need to report your income annually via the PIT-36 tax return.
  • Invoice Requirements – you’re not required to issue invoices unless a client requests one. If they do, you have up to 3 months after the end of the month in which the transaction occurred to issue the invoice.
  • VAT Exemptions – you can benefit from VAT exemption if your revenue stays under PLN 200,000 annually. However, certain sectors, like precious metals or excise goods, do not qualify for this exemption.
  • E-Commerce – unregistered business activity is ideal if you’re starting small or testing the waters, particularly for online sales through platforms like Amazon, Allegro, or eBay.
  • DAC7 Directive – if you sell on platforms like Vinted or Airbnb and exceed 30 transactions or EUR 2,000 annually, be aware of reporting obligations these platforms have from July 2024.

Conclusion

Remember: The information provided in this article is for general informational purposes only and does not constitute legal advice.

If you have any doubts or questions regarding unregistered business activity or want to develop your business into a registered sole proprietorship or company – contact us! 

We offer you our experience and professional support that will help you go through all legal processes smoothly and hassle-free. 

 

Estonian CIT in Poland

What is Estonian CIT?

This is a modern method of taxation that promotes investments and minimizes tax settlement formalities. It is modeled after the system functioning in Estonia, which is famous for its quite simple and therefore friendly method of taxation based on the structure that assumes that taxation takes place only when dividends are paid to partners, while they do not pay tax on current income during the company’s operations. Such a system undoubtedly significantly facilitates taxation, and therefore running a business itself, by eliminating tax obligations. It can also be used as an incentive for further development, financed by the generated profit. The assumption of this method of taxation is to simplify and facilitate the incurring of tax burdens.

These regulations are addressed to entities with the simplest share structure possible, i.e. limited liability companies and joint-stock companies, and from 1 January 2022, also limited partnerships, limited joint-stock partnerships and simple joint-stock companies whose shareholders are only natural persons and who do not hold shares in the capital of another company, participation titles in an investment fund or in a collective investment institution, all rights and obligations in a company that is not a legal person and other property rights related to the right to receive benefits as the founder beneficiary of a foundation, trust or other entity or a legal relationship of a fiduciary nature. However, a shareholder of such a company cannot have property rights related to the right to receive benefits as the founder or beneficiary of a foundation, trust or other entity or legal relationship of a fiduciary nature, but may have shares, shares or all rights and obligations in a company that is not a legal person.

Who Will Not Benefit From the Estonian CIT?

Estonian CIT cannot be used by:

  • Financial companies (e.g. banks)
  • Lending institutions
  • Taxpayers conducting business in special economic zones
  • Taxpayers declared bankrupt or liquidated
  • Taxpayers created as a result of a merger or division or divided by separation.

Is Estonian CIT Available For New Companies?

Yes.

In the case of a taxpayer starting a business, the condition regarding the structure of income is deemed to be met in the first tax year of lump-sum taxation.

The employment condition does not apply to the year of commencement of this activity and the 2 consecutive tax years.

However, starting from the second tax year, the taxpayer must increase employment annually by at least 1 full-time position until the employment level specified in this provision is reached.

How To Switch to Estonian CIT?

Switching to taxation in the form of Estonian CIT is not obligatory, and the decision on this matter rests with the taxpayer. To take this step, it is necessary to submit an appropriate notification to the tax office.

If you decide to take such a step before the start of the tax year, you have until the end of January to inform the head of the relevant tax office about your choice.

However, if your change of mind occurs during the tax year, the process becomes a bit more complicated. First, you will have to settle CIT according to standard rules. The next step is to close the books and prepare financial statements. Thanks to this, you will be able to correctly determine the tax base.

What Is the Subject To CIT Taxation?

The Estonian CIT tax applies not only to the company’s net profit and dividends (as shown in the examples above), but also to the so-called hidden profits, i.e.: monetary and non-monetary benefits, paid, gratuitous and partially paid benefits, or benefits provided to shareholders or partners (e.g. loans).

Expenditures not related to business activity are also taxed, as is the excess of the market value of the assets taken over or contributed in kind over the value of the assets in the event of a merger, division, transformation of entities or contribution.

It is worth mentioning here that expenses, depreciation write-offs and write-offs for permanent loss of value that are related to the use of vehicles and other assets solely for business purposes are not included in this group – they are therefore treated as business-related expenses and not subject to taxation. If the same expenses and deductions concern assets used in mixed activities, 50% of them are subject to Estonian CIT.

Estonian CIT Rate

The Estonian CIT rate is higher than when taxed under general rules and is 10% for a small taxpayer and a taxpayer starting a business and 20% for other taxpayers. When taxed under general principles, the corporate income tax rate is 9% and 19%, respectively. The partners are obliged to pay personal income tax on the dividend paid. However, in Estonian CIT it is subject to a reduction of 90% of the tax paid by the company – in the case of companies with the status of “small taxpayer” and companies starting their business, and 70% of the tax paid by the company in the case of other companies. When taxing income under general rules, partners cannot benefit from such a reduction.

Advantages of Estonian CIT

Estonian CIT is a real revolution in thinking about taxes. Thanks to the lack of tax on reinvested profits, companies can better plan their investments and implement them without fear of immediate tax burdens.
Moreover, the availability of Estonian CIT for various types of companies makes it an attractive option for both small and larger enterprises operating in various industries.

Disadvantages of the Estonian CIT

Although Estonian CIT may offer some benefits, there are disadvantages that effectively discourage some entrepreneurs from using this solution. The disadvantages of Estonian CIT in Poland include, among others:

  • The threat of having to suddenly pay tax retroactively with interest, which may constitute an unexpected financial burden for the company. (in the event of falling out of this form of taxation, e.g. through loss of employment or acquisition of shares in another company)
  • Tax on hidden profits, which may affect companies that do not settle transparently or have complex financial structures
  • Taxation of expenses that are not directly related to generating income may limit the investment opportunities of enterprises
  • Cost analysis in terms of hidden profits, such as the use of a company car by the owner, provision of services by the owner on a B2B basis but at rates much higher than market rates, without the possibility of justifying their validity, etc.

Are you interested in switching to Estonian CIT and have more questions or need assistance? Or maybe you are interested in other tax issues? Adwisen offers you comprehensive service in this area. Our experienced team will help you find the perfect solution for you!

Source:

https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU19920210086

Legal Stay in Poland

Are you a foreigner who wants to legally stay in Poland?

Are you considering moving to Poland to experience living in a new country?

Poland is a wonderful destination, offering a rich history, vibrant culture, and a growing economy. However, to fully enjoy your stay, it is important to understand the legal requirements for staying in the country.

Making sure you have all the necessary legal documents will help you avoid any legal issues and allow you to focus on settling into your new life in Poland. This guide is here to make that process easier for you.

Legal Stay In Poland – The Basics

The legalization of a foreigner’s stay depends on their country of origin. Those coming to Poland are categorized as:

  • European Union (EU) nationals, and their families, or
  • third-country nationals.

EU Member States are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

For the purposes of immigration regulations, an EU national also includes citizens of Norway, Iceland, Liechtenstein, and Switzerland.

The Schengen Area countries include: Austria, Belgium, Bulgaria, Denmark, Finland, France, Greece, Spain, Luxembourg, the Netherlands, Germany, Portugal, Romania, Sweden, Italy, Estonia, Lithuania, Latvia, Malta, Poland, the Czech Republic, Slovakia, Slovenia, Hungary, Croatia, as well as Liechtenstein, Switzerland, Norway, Iceland.

EU citizens can stay in Poland for up to 3 months without any registration of their stay. Third-country nationals can enter the territory of the Republic of Poland based on a visa or visa-free movement (if they are entitled to it).

From 24 February 2022, Ukrainian citizens who came to Poland due to the war can stay until 30 September 2025, without applying for a residence permit.

If a United Kingdom citizen was legally residing in Poland before the end of the transition period, i.e., before December 31, 2020 and they continue to reside in Poland after December 31, 2020, then they are a beneficiary of the Withdrawal Agreement and have the right to reside in Poland under the same conditions as citizens of EU member states. In this situation, the family members of such a citizen are also beneficiaries of the Withdrawal Agreement. In all other cases, UK citizens are treated, in terms of residence in Poland, as third-country nationals.

The regulations concerning the legalization of foreigners’ stay are particularly burdensome for non-EU citizens.

A residence permit for a foreigner is granted or refused by the voivode competent for the foreigner’s place of residence (for example, a foreigner residing in Warsaw will apply in the Masovian Voivodeship, while a foreigner residing in Gdynia will apply in the Pomeranian Voivodeship).

As a rule, the application must be submitted by the foreigner who is legally residing in Poland, i.e., no later than the last day of their legal stay (there are exceptions to this rule).

The voivode places a stamp in the foreigner’s travel document confirming the submission of the application for a residence permit within the deadline (and without formal deficiencies). Residence in Poland based on the stamp is considered legal (even if the visa or previous residence card expires) until the decision on the residence permit is issued, and in the case of an appeal against a negative decision, until the second-instance decision becomes final.

The stamp (if it is the only basis for staying in Poland) does not permit travel to other Schengen Area countries. With the stamp confirming legal residence, the foreigner can travel to their country of origin, but they will not be able to return to Poland or cross the Schengen Area border on that basis (to re-enter Poland, a visa must be obtained if the foreigner is from a country not covered by the visa-free regime).

EU Nationals

EU citizens and their families can stay in Poland for 3 months without any conditions.

If the stay in Poland exceeds 3 months (or if it exceeds the period for which the long-stay visa was granted), EU citizens must register it. This is not the same as residence registration. Stay registration is handled by the Voivodeship Office, while residence registration is done at the Municipality Office.

The obligation to register residence applies to:

  • Citizens of European Union member states
  • Citizens of Norway, Liechtenstein, and Iceland
  • Citizens of Switzerland – this also applies to the spouse and dependent child of an EU citizen or their spouse, who are joining or residing with them in the territory of the Republic of Poland
  • Citizens of the United Kingdom of Great Britain and Northern Ireland that are a beneficiary of the Withdrawal Agreement
  • Family members of the above-mentioned citizens who are residing together in the territory of Poland.

The right of residence granted to an EU citizen, as mentioned in points 1 and 2, also extends to their family members who are joining or residing with them in the territory of Poland.

Conditions for stay over 3 months

An EU citizen is entitled to reside in the territory of Poland for a period longer than three months if they meet any of the following conditions:

  • They are employed or self-employed in Poland.
  • They are covered by public health insurance or have the right to healthcare services and possess sufficient financial resources to support themselves and their family members.
  • They are studying or undergoing vocational training, are covered by public health insurance or have the right to healthcare services, and possess sufficient financial resources to support themselves and their family members without relying on social assistance.
  • They are married to a Polish citizen.

Despite the obligation to register the residence of an EU citizen for stays in Poland longer than 3 months, the right of an EU citizen to reside in Poland for more than 3 months is based on meeting the aforementioned residence conditions, not on the registration itself. Failure to fulfill the registration requirement does not negate an EU citizen’s right to reside in the territory.

The certificate of residence registration for an EU citizen is valid for a period of 10 years.

Family Members

Non-EU family members of an EU citizen must obtain a residence card for an EU citizen’s family member.

An individual is recognized as a family member of an EU citizen if they are:

  • The spouse of an EU citizen;
  • The child of an EU citizen or the child of their spouse (stepchild) under 21 years old;
  • The child of an EU citizen or the child of their spouse (stepchild) who is dependent on the EU citizen or their spouse;
  • The parent of an EU citizen or the parent of the EU citizen’s spouse (parent-in-law) who is dependent on the EU citizen or their spouse;
  • The parent of a minor EU citizen who is the actual caregiver of the minor and on whom the minor EU citizen depends for support.

The residence card of a family member of an EU citizen is valid for 5 years.

Permanent Stay

EU citizens obtain the right to permanent residence after staying in Poland for at least 5 continuous years. This means living in Poland for at least 6 months each year. Exceptions are for military service and significant personal reasons (e.g., pregnancy, illness, studies). Absence should not exceed 12 consecutive months.

In some cases, a foreigner may be eligible for permanent residency in Poland after a shorter period of continuous residence.

The document confirming the right of permanent residence and the permanent residence card of a family member of an EU citizen are valid for 10 years.

Third-country Nationals

Temporary Stay Up to 3 Months

Non-EU citizens can stay in Poland (and other Schengen countries) for up to 90 days under visa-free movement. This applies to nationals from countries with which Poland has an international agreement. For example, U.S. citizens with biometric passports can travel visa-free.

Temporary Stay Over 3 Months

To stay in Poland for more than 3 months (or if it exceeds the period for which the long-stay visa was granted), a foreigner must obtain a temporary residence permit, justifying the need to stay in Poland. The residence permit can be based on for example:

  • Work
  • Business
  • Education or studies
  • Graduating from a university
  • Scientific research
  • Family life
  • Internship
  • Volunteering
  • Delegation
  • Seasonal work
  • Other circumstances

A foreigner applying for a temporary residence permit must present i.a.:

  • Documents confirming their reason for stay in Poland
  • Health insurance
  • Financial means for staying in Poland.

A temporary residence permit is issued for a minimum of 3 months and maximum of 3 years. The foreigner should apply no later than the last day of their legal stay in Poland. The stay is considered legal from the application date until the decision is made.

After approval, the foreigner receives a residence card valid for a maximum of 3 years.

If a foreigner holds a Polish residence card, they can travel visa-free to other Schengen Area member states for a period not exceeding 90 days within any 180-day period. When traveling within the Schengen Area, they should always carry a valid residence card, a valid passport, and proof of health insurance.

Temporary residence permits cannot be extended (the law does not provide for a procedure to extend a temporary residence permit). If a foreigner wishes to stay in Poland, they must apply for a new permit.

A foreigner should leave Poland before the temporary residence permit expires, unless they have obtained another valid document allowing them to stay legally in Poland (e.g., another temporary residence permit, a permanent residence permit, or an EU long-term residence permit).

Legalization of Ukrainian Citizens' Stay

On March 12, 2022, the law on assistance to Ukrainian citizens due to the armed conflict came into force. It exempts Ukrainian citizens from needing a residence permit if they entered Poland after February 24, 2022. Regardless of the document used to cross the border, every Ukrainian citizen can stay legally in Poland until 30 September, 2025.

The law also covers:

  • Extending the legality of stay based on a temporary residence permit and national visa until June 30, 2024, if the permit/visa expires after February 24
  • Extending visa-free stay and Schengen visa validity until June 30, 2024, if the person was in Poland when the war started, and the document expires after that date.

The law does not apply to those who had an EU long-term resident permit, refugee status, subsidiary protection, tolerated stay, or applied for international protection before the war started.

Permanent Stay

A permanent residence permit is the right to reside in Poland for an indefinite period granted to a third-country national or stateless person, upon their application, in specific cases.

Persons eligible for permanent residence permits are:

  • Minor children of Polish citizens
  • Minor children of foreigners with permanent or long-term EU resident permits
  • Spouses of Polish citizens meeting certain conditions
  • Foreigners of Polish origin planning to settle in Poland
  • Holders of a valid Pole Card and/or is a person of Polish origin
  • Victims of human trafficking
  • A person who has been granted asylum in Poland
  • Foreigners residing in Poland for at least 5 years on refugee status or 10 years on tolerated stay
  • Citizens of the United Kingdom of Great Britain and Northern Ireland that are a beneficiary of the Withdrawal Agreement meeting certain conditions.

The stay of a foreigner, which forms the basis for granting a permanent residence permit, is considered uninterrupted if none of the absences lasted longer than 6 months and the total of all absences did not exceed 10 months, unless the absence was due to certain personal situation (e.g. work, studies, health).

The decision regarding the issuance of a permanent residence permit is granted for an indefinite period. However, the residence card itself is valid for 10 years, meaning that the card must be renewed every 10 years through a card renewal procedure. There is no need to reapply for the permit or go through the application process again.

A permanent residence permit (permanent residence card) allows for travel to other Schengen Area countries. However, the stay based on this permit cannot exceed 90 days within a 180-day period. If the foreigner intends to stay in a particular country for longer than the specified limit, they should regularize their stay according to the regulations in that country.

Long-Term EU Residence Permit

The EU long-term residence permit is a permit that grants the right to reside permanently in Poland.

A foreigner can obtain an EU long-term residence permit if they:

  • Have legally and continuously resided in Poland for at least 5 years
  • Have a stable and regular source of income for the 3 years of residence in Poland immediately prior to submitting the application (for those holding a Blue Card, stable income is required for 2 years)
  • Have health insurance
  • Have guaranteed access to accommodation
  • Provide a document confirming temporary residence registration or a certificate stating the inability to obtain such registration
  • Demonstrate proficiency in the Polish language (at least at level B1).

A foreigner’s stay is considered uninterrupted if none of the absences exceeded 6 months and all absences in total did not exceed 10 months within a 5-year period. The period in Poland is still considered uninterrupted if the absence was due to a certain personal situation (e.g., work, studies, health).

For the 5-year residence period in Poland, only half of the time spent by the foreigner is counted if they resided based on a visa or temporary residence permit issued for the purpose of completing studies or vocational training or during an asylum procedure.

Certain periods are not included in the 5-year residence period in Poland, for example: if a foreigner is a posted worker, holds a visa issued for humanitarian reasons, or during the procedure for granting refugee status.

Documents confirming knowledge of the Polish language, as explained in the Requirements stage, may include:

  • A certificate of Polish language proficiency at least at level B1, issued by the State Commission for the Certification of Polish Language Proficiency [more information: certyfikatpolski.pl].
  • A certificate of completion of a school in Poland, including primary, secondary, or post-secondary school, where Polish was the language of instruction.
  • A diploma from a university in Poland where Polish was the language of instruction.
  • A school leaving certificate or university diploma from an institution abroad where Polish was the language of instruction.

The decision to issue this permit is given for an indefinite period. However, the residence card itself is valid for 5 years, which means it must be renewed every 5 years through a card renewal process. There is no need to reapply for the permit or go through the initial application process again.

An EU long-term residence permit issued by Poland allows for travel to other Schengen Area countries. However, the stay based on this permit cannot exceed 90 days within a 180-day period. If the foreigner intends to stay in a particular country longer than the allowed limit, they should regularize their stay according to the regulations of that country.

Conclusion

Poland presents a welcoming environment for those seeking new opportunities, whether for work, study, or simply experiencing a new culture. However, understanding and complying with the legal requirements for staying and working in the country is crucial.

Adwisen specializes in providing expert assistance with the process of obtaining residence permits and related matters for both entrepreneurs and private individuals. With a deep understanding of immigration law and extensive experience, we ensure that all formalities are handled efficiently. Our expertise will guide you through the complex process of legalizing your stay smoothly and without legal complications.

Sources:

Legal Aspects Of Employment In Poland

Are you hiring in Poland or intend to do so? Or maybe you’re thinking about working in Poland? This article is a great source of knowledge about legal aspects of employment in Poland – you will get to know the types of employment and the basics of the Polish labor law. It aims to clarify the formal and legal aspects of different types of contracts regulating various employment methods. It covers those arising from the Labor Code as well as those, increasingly common, from the Civil Code. The solutions resulting from current law are discussed in this publication to familiarize employers or the individuals seeking employment with their most important elements.

What Exactly Is The Definition Of Employment?

Employment is a form of professional activity that involves the paid engagement of human resources and skills (human capital) in the activities of an economic entity. Each such employment is a specific type of agreement between the employee and the employer and is subject to legal regulations. The common feature of various employment contracts is a clear division: the employer guarantees the employee a job under strictly defined conditions and for a strictly defined remuneration, and the employee, in return, ensures honest and well-performed work.

What Are The Kinds Of Employment In Poland?

In Poland, there are different forms of employment. Depending on the legal nature of the contracts, they are divided into those arising from the Labor Code and those arising from the Civil Code:

  • Labor Code (k.p.) – This is the Act of June 26, 1974, Labor Code (Journal of Laws of 2014, item 1502, as amended), which is the primary source of labor law and includes various types of employment contracts
  • Civil Code (k.c.) – This is the Act of April 23, 1964, Civil Code (Journal of Laws of 2016, item 380, as amended), which regulates civil-law relations between natural and legal persons, including contracts for specific work and contracts of mandate.

What Are The Types Of Employment Contracts Under The Polish Labor Code?

The Labor Code, depending on the duration of the contract and the purpose for which it is concluded, distinguishes three types of employment contracts:

  • For a trial period
  • For a fixed term (including a substitution contract)
  • For an indefinite term.

In addition to employment contracts, the Labor Code also distinguishes:

  • Appointment
  • Nomination
  • Election.

What Are The Advantages Of A Polish Employment Contract?

An employment contract gives the full scope of rights arising from the Labor Code. With this type of contract, the employee is entitled to paid leave, maternity leave, and health benefits. During illness, the employee receives remuneration paid by the employer or the Social Insurance Institution (ZUS) and can access free medical services. In case of an accident, social insurance covers treatment and rehabilitation costs, and in case of loss of work capacity, it provides the right to apply for a pension. After losing a job, it is possible to receive unemployment benefits, and upon retirement, a pension is paid.

For most people starting work, it is more beneficial to enter into an employment contract, thus establishing an “employment relationship”. By establishing an employment relationship, the employee commits to performing a specified type of work for the employer under their direction and at a place and time designated by the employer. The employer, in turn, commits to employing the employee for remuneration. Establishing an employment relationship and determining the conditions of work and pay, regardless of the legal basis of this relationship, requires the mutual consent of the employer and employee. It is not permissible to replace an employment contract with a civil-law contract while maintaining the conditions for performing work.

Trial Period Contract

According to the regulations, a trial period contract is usually the first contract concluded with an employer and can last for a maximum of 3 months. During this period, both the employer and the employee have the opportunity to evaluate each other – the employer can assess the employee’s skills and qualifications and their potential for performing a specific type of work, while the employee can assess the working conditions, scope of duties, and the workplace atmosphere.

Such a contract can be concluded only once. This limitation does not apply if another trial period contract is concluded with the same employee but for a different position or if there is at least a 3-year break in employment. After the trial period, an employment contract can be concluded for a fixed term or an indefinite term. The employer may also choose not to conclude any further contract, resulting in the termination of the employment relationship. A trial period contract cannot be concluded with minors, whose employment and dismissal are regulated by separate provisions.

During the trial period, the employee is entitled to paid leave, sick leave, free health care, remuneration, and a notice period. The law also provides protection for pregnant women during this period, but only if the contract is concluded for a period longer than one month and would expire after the third month of pregnancy. In this case, the employer is obliged to extend the contract until the end of pregnancy, with the contract ending on the day of delivery. The woman retains the right to maternity benefits without the right to maternity leave.

Fixed-Term Contract

A fixed-term contract can be the second contract with an employer after the trial period or the first one if no other contract preceded it. This is a term contract, meaning the termination date must be specified in the contract.

Amended labor law provisions limit the duration of such a contract and the number of consecutive fixed-term contracts with the same employee. The total period of employment based on a fixed-term contract or contracts concluded between the same employer and employee cannot exceed 33 months. A fixed-term contract can be concluded only three times with one employee. Concluding another fixed-term employment contract or if the total period of employment based on fixed-term contracts exceeds 33 months will automatically result in concluding an indefinite-term employment contract.

Transforming a fixed-term contract into an indefinite-term contract depends on the following conditions:

  • Fixed-term contracts must follow one another
  • The period between the termination of one contract and the conclusion of another must not exceed one month
  • The successive contracts must be terminated.

Transforming a fixed-term contract into an indefinite-term contract depends on the following conditions:

Substitution Contract

A substitution contract is a specific type of contract to which the provisions concerning fixed-term contracts indicated in Article 25 of the Labor Code apply. Employers can conclude it to provide a substitute for an employee absent for justified reasons, e.g., due to illness, parental leave, or unpaid leave. The employer can assess a potential substitute by employing them for a maximum 3-month trial period.

The substitution contract should specify the same type of work (position) as the substituted employee’s employment contract. However, it can specify a different working time and remuneration.

A substitution contract differs from a fixed-term contract primarily due to:

  • No limitation to 33 months total duration of employment and no necessity to transform it into an indefinite-term contract even if it is concluded for the fourth time – this means that if a substitution contract was concluded for a specified period (e.g., two years), and after this term, the substituted employee does not return to work, the employer can extend the substitution contract for another, any period. Such extensions can occur multiple times, and an employee working on a substitution contract does not transition to an indefinite-term employment contract
  • No protection for pregnant women – this means that if the period for which the employee was employed expires, the employer does not have to extend her employment contract until the day of delivery (similarly in the situation when the substituted employee returns to work). During the contract period, a pregnant woman has the same rights to leave work for medical examinations related to pregnancy, which cannot be conducted outside working hours, retaining the right to remuneration.

An employee employed under a substitution contract is entitled to social insurance and has the right to free medical care and sick leave. However, if the substitution contract expires during the employee’s illness and the substituted employee returns to work, the substitution contract is not extended.

Indefinite-Term Contract

An indefinite-term contract is an open-ended contract concluded without specifying the end date of the employment relationship. It assumes the existence of a permanent legal bond between the employer and the employee and guarantees employment stability. This is the most advantageous form of employment for the employee, providing the most extensive guarantees, primarily regarding the permanence of the employment relationship. The benefits of an indefinite-term contract include longer notice periods, the necessity to justify the decision to terminate, and, in some cases, the requirement to consult with trade unions operating at the workplace. An employee employed under this contract is entitled to all privileges arising from the Labor Code, namely:

  • Insurance (retirement, disability, sickness, health)
  • Wage protection (cannot be lower than the minimum and must be paid on time)
  • Working time protection
  • Stability of employment (notice period)
  • Leave entitlements
  • Protection for certain groups (women, minors, disabled persons)
  • Special entitlements for specific occupational groups.

Appointment

Appointment is a non-contractual employment relationship established by administrative decision. It is a way of establishing employment where the nature of the job requires it and in situations where employees face particularly high demands. An employment relationship based on appointment is established in cases specified in separate regulations, known as service pragmatics (specific sectoral regulations). These are legal acts regulating the rights and obligations of public service employees.

Civil Law Contracts In Poland

Employment based on civil law contracts occurs when the employer enters into a legal relationship with a natural or legal person that is not regulated by the Labor Code but is governed by the provisions of the Civil Code. When concluding civil law contracts, there is greater freedom in shaping the terms of the contracts. However, this does not mean complete freedom. Civil law also sets specific boundaries that the parties to the contract cannot exceed.

Among the many contracts provided for in the Civil Code, the most widely used as the basis for providing work are:

  • Mandate contract
  • Contract for specific work
  • Agency contract.

The main feature distinguishing these contracts from employment contracts is the lack of subordination of the contractor (employee) to the principal. At the same time, contractors of civil law contracts are deprived of the protections and employee rights provided to employees by the Labor Code. In most cases, they are not covered by regulations on paid leave, maternity leave, minimum wage, overtime, and notice periods.

Mandate Contract

The subject of the mandate contract is the performance of a specified legal action (for a fee or free of charge) for the principal. The parties to the mandate contract can be any individuals or legal entities, provided they have the legal capacity to act. The principal commissions specific actions, and the contractor performs the mandate. The mandate contract can be paid or unpaid.

In the case of a paid mandate, the amount of remuneration should be specified in the contract so that the remuneration for each hour of performing the mandate is not lower than the minimum hourly rate.

In the case of an unpaid mandate, it is necessary to include a clause in the contract stating that there is no remuneration. If such a clause is missing, and it is not clear from the contract or the circumstances that the contractor agreed to perform the mandate without remuneration, the mandate is considered paid. If the amount of remuneration is not precisely determined, the contractor is entitled to “remuneration corresponding to the performed work,” taking into account the time spent on the mandate, the complexity of the tasks, and the contractor’s professional preparation.

The contractor must inform the principal about the progress of the contract and, upon completion, provide a report on its execution. Mandates are contracts of diligent performance, meaning that the work performed for the principal is important, even if it does not necessarily lead to a specific result.

The Civil Code does not require any specific form for the validity of a mandate contract, meaning it can be concluded in any way, i.e., orally, in writing, or implied. There are also no limitations regarding the duration of the contract.

The regulations allow the inclusion of a substitution clause in the mandate contract, under which the contractor can entrust the performance of all or specific tasks to a third party.

A mandate contract, like an employment contract, involves the obligation to pay health insurance contributions unless the contractor has contributions paid from another source (e.g., is a student under 26 years of age, has an employment contract, or runs a business – but in a different scope than the mandate). The payment of the sickness insurance contribution is voluntary.

A mandate contract can be terminated by either party at any time. If the principal terminates the contract and it is paid, they must pay the contractor part of the remuneration corresponding to the completed tasks. In the case of mandate contracts, the cost of earning income is 20% or 50% (applied when using copyrights), and the tax is 18% of the remuneration base.

A mandate contract is less convenient for the contractor because it does not provide full-time employment or job security and does not grant employee rights such as paid leave.

Contract For Specific Work

A contract for specific work is an agreement in which the contractor agrees to produce a specified work, and the principal agrees to pay for it.

A contract for specific work is a typical contract of result, paid and bilateral. The condition for the existence of a contract for specific work is the specification in the contract of the work to be performed by the contractor. The work can be tangible, such as creating a database, writing an article, or intangible, such as organizing a trip.

The contract must specify the type of work, the deadline, and the method and amount of payment. If the work is improperly or untimely performed, the principal can terminate the contract. Such a contract does not provide the employee with any social protection, and the employer does not bear responsibility for ensuring occupational safety and health, paid leave, severance pay, or benefits.

One advantage of this contract is that the principal does not care when and how it is performed – only the final result matters.

The remuneration for the work should be specified in the contract, but it does not necessarily have to be in the form of a specific amount. Instead, it can include guidelines for determining the remuneration after the work is completed, indicating what the principal expects and what could lead to higher or lower remuneration. Remuneration for the work can be in the form of a lump sum. If the parties cannot precisely determine the components of the remuneration when concluding the contract, such as the duration of the service, material costs, or the scope of work, they can adopt a cost-based remuneration.

A contract for specific work, unlike employment contracts and mandate contracts, does not involve the obligation to pay insurance contributions (except when the contractor performs work for their employer). Additionally, when the work is of a creative nature, and the contract transfers copyrights to the principal, a high cost of earning income – 50% – can be applied. In other cases, the cost of earning income is 20%.

A contract for specific work terminates in the event of the contractor’s death or incapacity to work. This applies only to works whose performance depends on the contractor’s personal characteristics. If the materials used for the work belonged to the contractor and the work was partially completed and valuable to the principal, the principal must pay the contractor or their heir an appropriate part of the remuneration and take the materials in their current state. Claims arising from a contract for specific work expire after 2 years from the completion of the work, or if the work was not completed, from the date it should have been completed according to the contract. Time worked under such a contract is not counted toward the overall length of service.

Agency Contract

Another type of non-employment relationship is the agency contract. The essence and function of this contract are to regulate the provision of intermediary services between the parties to the contract.

By signing an agency contract the agent agrees, within the scope of their business activity, to constantly mediate in concluding contracts with clients on behalf of the principal, or to conclude them on behalf of the principal. The principal agrees to pay the agent the agreed remuneration (commission). To secure the agent’s interests the regulations guarantee that each party can request the other party to confirm the content of the contract and any amendments or additions to it in writing.

An agency contract can be concluded for a fixed or indefinite period. Termination of a contract concluded for a fixed period or a contract performed by the parties after the specified period occurs:

  • With one month’s notice in the first year of the contract
  • With two months’ notice in the second year of the contract
  • With three months’ notice in the third and subsequent years of the contract.

Statutory notice periods cannot be shortened.

An agency contract can also be terminated without notice. The reason can be the non-performance of duties by one of the parties in whole or in part, or other extraordinary circumstances.

The agency contract provides the agent with some savings. As a self-employed person, the agent pays social insurance contributions at a fixed rate, independent of the earned remuneration.

Management Contract

A management contract is an unnamed contract, meaning it is not yet regulated by civil law provisions. The parties to this contract can freely determine their mutual rights and obligations based on the principle of autonomy of will and mutual agreement.

A management contract is a bilateral and paid contract. Its primary content is the management (conducting) of a business. By concluding such a contract, the manager agrees to continuously and effectively manage the business on behalf of and for the account of the other party for remuneration. It should be noted that this form of employment does not guarantee minimum remuneration or the right to paid leave. Another characteristic of a management contract is the unregulated working time.

Managers can be individuals, self-employed individuals, and legal entities. The other party to the contract must always be an entrepreneur. A management contract is generally considered a contract of diligent performance with elements of a contract of result. The contract can describe in detail what the diligence should entail. However, the manager will generally be liable for the lack of diligent performance, not for the failure to achieve the result. The entrepreneur can stimulate the manager to achieve desired results by stipulating in the contract a reduction in remuneration in case of not achieving the set result. The amount of remuneration depends on the parties’ agreements and should be specified in the contract, if not as a specific amount, then at least by indicating the principles of its calculation.

The management contract should not contain clauses characteristic of an employment relationship. The manager should have the freedom to conduct the business. They do not have to perform the assigned tasks personally, and the parties can allow third parties to perform certain tasks (substitutes). The manager can decide how and when to accomplish the assigned tasks. Working time should not be strictly specified, as it depends on the duties assigned to the manager.

The manager’s liability for damage caused to the entrepreneur is based on general principles specified by the Civil Code. The manager is liable for the full amount, not only for the actual damage caused to the enterprise but also for the lost benefits the entrepreneur could have achieved if the manager had not caused the damage. The manager is liable for both actions and omissions. Furthermore, the manager can be held responsible for the actions of others if they perform their tasks with the help of others or delegate the performance to others.

The management contract is also not subject to regulations guaranteeing employment protection. The manager must therefore be prepared to receive a termination notice at virtually any time. During the contract negotiations, attention should be paid to the length of the notice period.

Conclusion

The Polish labor market offers a variety of employment forms, each with its own legal framework and specific provisions. Employment contracts under the Labor Code provide comprehensive protections and benefits, including paid leave, health care, and social insurance, making them highly advantageous for employees. On the other hand, civil law contracts offer more flexibility but come with fewer protections and benefits.

Liked the article and want to know more? Need help with an employment problem? Adwisen offers you professional and helpful assistance, so don’t hesitate to contact us!

Sources:

  1. The Act of June 26, 1974, Labor Code (Journal of Laws of 2014, item 1502, as amended)
  2. The Act of April 23, 1964, Civil Code (Journal of Laws of 2016, item 380, as amended)

Extending Support for Ukrainian Refugees: New Amendments to Polish Legislation

The Act of March 12, 2022 on assistance to citizens of Ukraine in connection with an armed conflict on the territory of this country was adopted in order to create a specific legal regulation providing an ad hoc legal basis for legal stay for Ukrainian citizens who, as a result of hostilities, were forced to leave their country of origin. The application of the Act so far, over two years, has brought experience indicating the need for another amendment, consisting in clarifying some of its provisions, changing some of the adopted solutions, and supplementing it with new regulations.

As the conflict in Ukraine continues, Poland has taken significant steps to extend and modify the assistance provided to Ukrainian refugees.

The recent amendments to the Act on Assistance to Ukrainian Citizens, passed on May 15, 2024, aim to address the evolving needs of refugees and streamline the support mechanisms.

Here’s a comprehensive look at the new changes and what they mean for Ukrainian citizens seeking refuge in Poland.

Key Amendments to the Legislation

Extended Protection Period

The new legislation extends the assistance for Ukrainian citizens fleeing the war until September 30, 2025. This extension aligns with the EU Council Implementing Decision (EU) 2022/382 of March 4, 2022.

The key change was to extend the period during which the stay in the territory of the Republic of Poland of Ukrainian citizens who arrived in connection with hostilities carried out on the territory of Ukraine is considered legal and the related access to health benefits, family and social benefits, benefits paid by ZUS and the possibility of staying in collective accommodation facilities.

The Act also introduced extending:

  1. The authorization period for municipal employees as volunteers for specific tasks,
  2. The temporary use of buildings for housing Ukrainian citizens,
  3. The validity period for various Ukrainian citizens’ visas, permits, and documents,
  4. The period for granting temporary residence permits to Ukrainians under specific conditions,
  5. The period for suspending proceedings to obligate Ukrainian citizens to return to Ukraine,
  6. The period for the health minister to assign professional numbers to doctors/dentists for providing services to Ukrainians,
  7. The suspension of deadlines for handling foreigners’ residence permit matters by the voivode.

The Act stated that if the EU extends protection to March 2026, the act includes provisions for an automatic extension of protection.

On June 14th 2024, the EU countries approved the extension of temporary protection for Ukrainians staying in the European Union until March 4, 2026.

Application Deadline Extensions

The amendments provide a four-month extension for submitting applications for the conditional right to practice as a doctor, dentist, nurse, or midwife. This also applies to the recognition of certificates for citizens from countries that have denounced mutual recognition agreements.

Transitioning from Temporary Protection to Temporary Residence

The stay of Ukrainian citizens with a PESEL UKR number will now be legal in Poland until March, 2026. Starting next year, refugees can change their status from temporary protection to temporary residence granted for 3 years.

To qualify for this status change, a Ukrainian citizen will have to:

  • Complete and update all necessary data in the PESEL UKR database at the municipality office,
  • Submit an electronic application to the voivode,
  • Have had active UKR status on March 4, 2024, and on the application date,
  • Ensure security services do not object to the status change.

Upon successful application, individuals will receive a residence card marked “previously held temporary protection.” Refugees will be able to apply for this change until March 2025.

Withdrawal of Certain Benefits

From July 1, the government will withdraw support for:

  • Photography services,
  • One-time payment of 300 PLN for “settlement”.

However, these benefits are not abolished but frozen, allowing easy reinstatement if the war situation worsens.

Changes in Private Housing Support

From July 31, support for providing housing and food for Ukrainian refugees in difficult situations will be possible only under agreements with the voivode or local government acting on the voivode’s order. The most controversial change is ending the 40 PLN compensation for private accommodation, due to increasing issues with this system.

The benefit provided till July 31 was extraordinary and has lost its original purpose over time. Initially, it was to compensate Polish citizens hosting Ukrainian war refugees with accommodation and meals when institutional care was scarce. Recently, the number of applicants has decreased, and with one-third of places available in collective accommodation facilities, it is assumed that refugees needing further support can now use these facilities.

Focused Refugee Support

Assistance will now concentrate in shared living centers financed under Article 12 of the aid act. New regulations ensure:

  • Collective accommodation for at least 10 people or in public sector properties, with full-day catering,
  • Operation of reception points,
  • Transport related to accommodation or medical care,
  • Other necessary actions approved by the relevant minister.

Support will continue for those at risk of social exclusion, such as:

  • Disabled individuals,
  • Elderly women (60+) and men (65+),
  • Pregnant women or those with children under 12 months,
  • Single caretakers of three or more children, with at least one under 14,
  • Minors in foster care or without educational benefits,
  • Individuals granted an exemption by the voivode due to difficult living conditions.

Inclusion of Additional Foreigners

The act now includes:

  • Minor children of Ukrainian citizens,
  • Minor children of spouses of Ukrainian citizens.

These groups can now access the assistance provided by the Aid Act.

Access to the Polish Labor Market

The Act proposed maintaining the current rules of access to the labor market for Ukrainian citizens. Every citizen of Ukraine will be able to register at the labor office as an unemployed person in order to look for a job. Training in Polish for doctors, nurses and midwives will also be maintained. The possibility of providing care for minor Ukrainian citizens by the Voluntary Labor Corps will also remain unchanged.

Changes are planned regarding the notification that must be submitted by an employer employing a Ukrainian citizen.

Changes to labor market access include:

  • Reducing the employer notification period from 14 to 7 days for hiring Ukrainian citizens,
  • Additional notifications for changes in employment terms,
  • Employers must indicate minimum wage rates in notifications,
  • Ukrainian citizens must inform their employer upon receiving a temporary residence and work permit.

Educational Benefits and New Provisions

Linking the 800+ benefit and “Good Start” program to compulsory education, Ukrainian children must attend a Polish educational system school to qualify. A child of a Ukrainian citizen for whom they apply for an educational benefit or a good start benefit must fulfill the obligation of one-year pre-school preparation, compulsory schooling or compulsory education. This condition will not apply to children who, due to age or postponement, do not fulfill these obligations.

The Social Insurance Institution must suspend benefits if school attendance is not confirmed.

Right to Practice Medicine

The extension until September 30, 2025, allows the health minister to assign practice rights to doctors and dentists with temporary registration who intend to provide health services to Ukrainian citizens. It also restores the ability for Ukrainian psychologists in Poland to offer services from July 1, 2024, to March, 2024.

Conclusion

These amendments represent a comprehensive approach to supporting Ukrainian refugees in Poland, ensuring they have the necessary legal, social, and economic resources to rebuild their lives. The extended protection period, streamlined processes for status changes, and focused support mechanisms aim to provide stability and security for those affected by the ongoing conflict. As the situation evolves, Poland remains committed to adapting its policies to meet the needs of Ukrainian citizens seeking refuge.

Legal Lublinnovation

Adwisen always wants to keep a hand on the pulse when it comes to new technologies that can improve our performance and client satisfaction.

On 23-24 May 2024 Katarzyna Rodzik – Samsonowicz, lawyer from our legal team, attended Lubninnovation. This amazing event regarding legal tech and legal design, took place in Lublin – a beautiful Polish city, famous for its rich history, cultural significance, and academic contributions.

The event was organized with an aim to connect lawyers interested in innovations, educate them about the possibilities that the new technologies can give them and how to make clients’ legal experience better.

Lublinnovation provided speeches and discussions involving legal and IT professionals, creative workshops and a great chance to networking!

Who Were The Guests?

The event was spruced up with international guests, including Tessa Manuelo (Founder & CEO of Legal Creatives), Raquel Garcia (Senior Best Delivery Advisor at Clifford Chance), Anna Posthumus Meyjes (Legal Designer – Founder of Aclara Legal Design), Gaga Mucko (Senior Legal Counsel at Instapro Group), Simona Chaminska (IT Product Owner at Hilty in Switzerland), Karol Andrea Valencia J. (Lawyer, UX & Service Designer, Full-stack Developer, Co-founder @WOWLegalX), Ana – Maria Drăgănuță Briard (Partner Attorney-at-Law, LL.M. @Legally Remote, Vice President and Ambassador for Romania to European Legal Tech Associacion) as well as Polish specialists including– Tomasz Zalewski (Partner at Bird&Bird Poland, President of Legal Tech Poland Foundation), Katarzyna Abramowicz (sygnanet.pl, specfile.pl, specprawnik.pl, oduslug.pl), Iga Kurowska (Innovation at Karnov Group AB), Przemysław Barchan (Founder of Barchan Legal law firm, member of ELTA), Maciej Kacymirow (Local Partner, Greenberg Traurig), Kamila Kurkowska (President and founder of Women in Law Foundation), Tomasz Prus (Head of Marketing, Innovation Catalyst CMS Cameron McKenna), Monika Dudziak (Legalny Offtop, Chief Marketing Officer, Dudziak – Media), Marcelina Szwed – Ziemichód (Legalny Offtop, MSZ Tax) and many more.

What Was Discussed During The Event?

Lublinnovation covered a lot of interesting subjects, including:

  • The role of creativity in the legal industry
  • AI and its real impact on the work of lawyers
  • Legal Tech implementations
  • Digitalization in Legal Practice
  • Legal project management
  • Legal design in B2B relationships
  • Contract design
  • Practical use of icons and visualizations in documents
  • Social Media for lawyers

What Are Our Thoughts On The Event?

This event is certainly was interesting and productive for us, as it was filled with fascinating content that not only supplemented our knowledge with current news, but also allowed us to plan a strategy of new solutions for our clients, enriched with legal tech and legal design. We had a chance to meet many industry specialists whose knowledge was extremely useful and presented in a very accessible way!

What Is Legal Tech?

Legal tech, short for legal technology, refers to the application of technology and software to provide legal services and support the practice of law. It encompasses a wide range of tools and platforms designed to improve efficiency, reduce costs, and enhance the accessibility and quality of legal services. Here’s a closer look at what legal tech entails and its impact on the legal profession.

Key Components Of Legal Tech

  • Document Automation – Legal tech includes software that automates the creation, review, and management of legal documents. These tools can generate standard forms, contracts, and other legal documents quickly and accurately, reducing the time and effort required by lawyers
  • Artificial Intelligence (AI) – AI is a significant driver of legal tech innovation. AI-powered tools can analyze large volumes of legal data, predict case outcomes, and assist with legal research. For instance, AI can help lawyers identify relevant case law, statutes, and regulations much faster than traditional methods
  • Blockchain Technology – offers secure and transparent ways to manage and execute legal contracts. Smart contracts, which are self-executing contracts with the terms directly written into code, are a prominent example. Blockchain ensures the integrity and immutability of legal documents and transactions
  • E-Discovery – tools that automate the process of identifying, collecting, and producing electronically stored information (ESI) for legal cases. These tools help lawyers handle large datasets, making it easier to locate relevant information and evidence
  • Legal Research Platforms – online legal research platforms provide access to vast databases of legal resources, including case law, statutes, and legal commentary. These platforms often incorporate advanced search functionalities and AI to enhance research efficiency
  • Case Management Software – helps law firms organize and manage their cases, clients, deadlines, and billing. These tools streamline administrative tasks, improve communication, and ensure that important deadlines are met
  • Online Dispute Resolution (ODR) – ODR platforms facilitate the resolution of disputes through online mediation and arbitration. These platforms provide a more accessible and cost-effective alternative to traditional litigation, particularly for smaller disputes
  • Legal Analytics – these tools analyze data from past cases to identify trends, patterns, and insights. Lawyers can use these insights to develop strategies, predict case outcomes, and make data-driven decisions.

What Are The Benefits of Legal Tech?

  • Increased Efficiency – Legal tech automates repetitive tasks, allowing lawyers to focus on more complex and strategic aspects of their work. This increases overall productivity and reduces the time required to complete tasks
  • Enhanced Accuracy – Automation and AI reduce the risk of human error in legal processes. This enhances the accuracy and reliability of legal work, from drafting documents to conducting legal research
  • Improved Access to Justice – Legal tech tools, such as online legal services and ODR platforms, make it easier for individuals to access legal assistance. This is particularly important for underserved populations who may not have the resources to hire traditional legal services.
  • Better Client Experience – with improved efficiency, accuracy, and communication, legal tech enhances the overall client experience. Clients benefit from faster turnaround times, more transparent processes, and better outcomes.

What Is Legal Design?

Legal design is a multidisciplinary approach that applies design thinking principles to the legal field. It aims to make legal systems, services, and products more accessible, understandable, and user-friendly for everyone. By integrating elements of visual design, user experience (UX) design, and communication, legal design seeks to bridge the gap between complex legal information and the needs of users, whether they are clients, lawyers, or other stakeholders.

Key Principles of Legal Design

  • Simplification and Clarity
  • Visual Communication
  • Iterative Process
  • Collaboration and Interdisciplinarity

Applications

  • Contracts and Agreements
  • Legal Forms and Documents
  • Client Communication
  • Online Legal Services

Benefits of Legal Design

  • Enhanced Understanding
  • Improved Client Experience
  • Increased Efficiency
  • Greater Transparency
    Innovative Solutions.

The collaborative and interdisciplinary nature of legal design fosters innovation, leading to the development of new tools and methods that improve legal services.

Conclusion

Legal tech and legal design are revolutionizing the legal industry. As technology continues to advance, the legal profession must embrace these innovations to stay competitive and meet the evolving needs of clients. By understanding and leveraging legal tech, lawyers can enhance their practice, improve client outcomes, and contribute to a more just and equitable legal system.

As Adwisen, we are constantly improving our qualifications and updating our knowledge so that our services remain at the highest level and our clients’ experiences are the best possible.