Employing a person in Poland by a UK company without a local subsidiary

There is a real and practical need for UK companies to employ people in Poland due to several challenges and dynamics in the current world of work. The rise of remote work and digital transformation has made Poland an attractive location for hiring IT and tech talent remotely, without necessarily requiring a physical office presence. This trend supports UK companies in accessing skilled workers while managing costs and operational complexity.
 
UK companies can employ people in Poland either through establishing a legal entity (subsidiary or a branch) or by contracting people without a local subsidiary (either employees or self-employed individuals), which offers flexibility in employment models and compliance with Polish labor laws. This flexibility is valuable in a rapidly changing work environment post-Brexit and post-pandemic.
 
When a UK company wants to employ someone in Poland without establishing a Polish subsidiary, it generally has three options to consider. Which option is the best depends largely on perspective and context. Here are the options:

1. Direct employment by the UK company  

A UK company can directly employ a Polish resident. In this scenario, the employment contract can be governed by Polish or English law, but Polish employment law will generally apply if the work is performed in Poland

The UK company must obtain a Polish Tax Identification Number (NIP) to fulfill obligations such as social security contributions. This is done by submitting a NIP-2 application to the tax authorities in Warsaw. All formalities can be arranged by a local attorney having a proper power of attorney.
 

• The company must register as a payer with the Polish Social Security Institution (ZUS) and handle monthly social security contributions for the employee

 

• The employee will generally be responsible for their own income tax, but in practice, the UK employer often pays this on their behalf

 

• Before employment begins, the candidate must undergo a medical examination and health & safety training, which the employer must arrange

 
Key steps for direct employment:
 

1. Obtain a Polish NIP number for the UK company

 

2. Register as a payer with ZUS (social security authority)

  

3. Sign an employment contract (in Polish and in English which is compliant with Polish law)

  

4. Arrange mandatory medical and health & safety training for the employee

  

5. Calculate and pay social security contributions and income tax in Poland

 
This process allows a UK company to legally and compliantly employ staff in Poland without a local subsidiary, provided all Polish legal and administrative requirements are met.
 
2. Using a B2B (Business-to-Business) contract  

Instead of a standard employment contract, the UK company can contract with a self-employed person in Poland. The Polish worker sets up their own business and invoices the UK company for services. This approach is governed by the Polish Civil Code, not the Labour Code, and is common among IT professionals and freelancers
 
The administrative burden is lighter, but this arrangement is only suitable if the relationship is genuinely business-to-business and not an employment relationship.

3. Using a contract for a specific work  

Another solution is a contract for a specific work (also known as project-based or fixed-term contract) which offers several compelling advantages for programmers, making it an attractive and often optimal choice compared to traditional permanent employment. This contract is also governed by the Polish Civil Code, not the Labour Code.
 
One of the key benefits for contractors is favorable tax arrangements. A contract for a specific work that includes the transfer of copyrights can be beneficial for IT professionals in Poland because it allows them to apply a favorable tax regime with lower taxes. This is possible if the employee transfers the economic copyrights to their work to the employer under a contract that explicitly separates copyright remuneration from other salary components. Under such an arrangement, the employee can apply a 50% tax-deductible cost (TDC) to the income received from transferring copyrights, effectively reducing taxable income by half.
 
Conclusion
 
Which option is the best depends largely on perspective and context. Direct employment is usually the safest choice. B2B contracts are suited for experienced professionals comfortable with self-employment and tax management, offering flexibility and cost savings to the employer. Contracts for a specific work are suited for authors who create work and transfer the economic copyrights to their work to the employer. For non-EU nationals, work permits and visas are required, which may complicate hiring if the employee is not an EU citizen.
 
Woźniak Legal possesses the expertise and experience necessary to effectively assist you. Our lawyers can assist you in resolving the challenges and finding the right option.
 
Please contact us on office@woznialegal.com.
 
You can also email me directly on grzegorz.wozniak@wozniaklegal.com.