How to set up a company in Poland and benefit from the IP Box regime?

Poland is one of the most popular business locations in Europe. The central location, attractive labour market, and incentives for foreign investors are just some of the benefits of starting a business in Poland.
One of the most popular tax incentives in Poland for foreign investors is the IP Box scheme, which stands for "Intellectual Property Box" - a well-known tax scheme for innovative businesses. Poland’s IP Box offers generous tax incentives, which tech companies can benefit
from under specific conditions.
 
What exactly is IP Box, and how can your company benefit from it?
 
The IP Box in Poland is a tax relief for entrepreneurs who commercialize intellectual property rights (IP) developed from their own research and development activities. Qualified income from these IP rights is taxed at a preferential rate of 5%, instead of the standard income tax rates of 12%, 19%, or 32%. This applies to income generated from patents, copyrights to software, utility models, and other qualified intellectual property rights. To benefit from the IP Box, a business must conduct research and development leading to the creation, development, or improvement of qualified intellectual property rights and maintain proper accounting records for the revenue, expenses, and income related to those rights.
 
What is the recommended plan of action?
 
The first step is to set up a company in Poland. Setting up a company primarily involves the following steps:
 

1. Choose a legal form: The most common structure for foreign investors is the limited liability company (sp. z o.o.).
2. Prepare documents: This includes company name, office address, object of activity, share capital information (minimum PLN 5,000), and details on shareholders and management board.
3. Notary and articles of association: You need to prepare and sign the articles of association. This can be done with a notary (traditional and online options exist).
4. Register the company: Submit an application to the National Court Register (KRS) via the S24 portal (for a faster process, typically 48 hours) or the PRS system (can take 1-3 weeks).
5. Post-registration compliance: Complete legal formalities like beneficial owner registration (CRBR), civil law transactions tax (PCC-3), tax reporting (NIP-8), and VAT registration (VAT-R).
6. Open a bank account: A Polish bank account is necessary for handling tax and social security payments and for official recognition by authorities. It should be the bank located in Poland.

 
How to benefit from the IP Box regime in Poland?
 
To take advantage of the IP Box regime, special preparation and careful planning are essential. Below is a guide to developing a strategic approach:
 

• Confirm you are conducting R&D activities. These may be carried out independently or outsourced.
• Ensure the R&D leads to the creation, development or improvement of qualified intellectual property. Eligible IP includes patents, utility models, industrial designs, topographies of integrated circuits, medicinal or plant product registrations, plant variety rights, and copyright in computer software (the latter is especially relevant for IT companies).
• Obtain or apply for legal protection of the intellectual rights generated. Only IP that is legally protected and registered is eligible.
• Maintain detailed and separate accounting records for each IP right. This enables clear tracking of:
  •  
  • - revenue associated with each specific IP;
  • - tax-deductible expenses and R&D costs attributed to the creation or improvement of the IP;
  • - nexus calculations for the proper allocation of preferential taxation.
  •  
• Prepare robust internal documentation on R&D activity and the process of generating IP. This should detail project milestones, personnel, expenditure, and descriptions of inventions or software .
• Keep all evidence of commercialization (licensing agreements, sales contracts, invoices) relating to each qualifying IP right.

Conclusion
 

• Strategic planning, meticulous recordkeeping, and clear R&D linkage to your IP rights are crucial.
• Legal and accounting advice is recommended, especially in the initial application phase and to adapt to legislative updates over time.
• Companies of all sizes and legal forms can benefit, provided stricter documentation obligations are met.

By combining incorporation in Poland and structuring your activities to include R&D with protected IP, you can leverage one of the EU’s most attractive tax regimes for innovative enterprises.