Imagine doing what you love in an amazing town in Poland. While this could continue to seem like a distant dream, the reality is that it is easier to become a freelancer in Poland than you might think. By walking through a few straightforward steps, you could soon be living the dream. While the process to register as a freelancer in Poland is relatively simple, it does take time. With this in mind, now is the perfect time to get started with the process. What does it take to start working as a freelancer in Poland?
Requirements to Work as a Freelancer in Poland
Before you can give up your 9-to-5 way of life and freelance in Poland, you need to obtain the necessary documentation. One of the important items that you need is a PESEL, which is an identification number that every citizen and foreigner who is working in the country must have. This number also enables you to open a business bank account, pay your taxes and get healthcare while working in Poland.
As a freelancer, you will be running your own business in Poland. All businesses must have a REGON number. This number places your business in a national business registry.
When you register your business, you will be given a NIP. NIP is the tax ID number that is needed to pay your business taxes.
Because you will be running a sole proprietor business in Poland, you must also register with the Central Register for Information on Economic Activity. This agency, which is also known as the CEIDG, has a no-cost, online registration process. You must also notify the CEIDG when you pause or restart business activities. The CEIDG provides you with the REGON and NIP numbers.
How to Register to Work as a Freelancer in Poland
You can see that there are several important steps to take to register as a freelancer in Poland. However, you may be curious about the process for completing these steps. The registration process for the PESEL is simple. You simply apply with the Polish government by completing a straightforward form and providing information to document your identity, such as a passport.
Next, you will register with the CEIDG. You can submit the CEIDG-1 form via mail, in person or online. There is no cost associated with registering with this agency. When you register, you will automatically be given a REGON. This places your business on the national registry. You will also be assigned a NIP automatically through your CEIDG registration. Keep in mind that you will need to provide proof of your registration with CEIDG as well as your NIP and REGON when you open a business bank account in Poland.
If you are a foreigner who is freelancing in Poland, you must also obtain a freelancing work visa. To do so, you must provide your rental contract or proof of residence, financial documents to show that you have the means to support yourself and an employment contract.
Tax Duties for Freelancers in Poland
Do you need to pay taxes as a freelancer in Poland? You are considered a Polish tax resident and are required to pay taxes if you reside in the country for more than half of the year. While some countries have a progressive tax rate structure, this is not the case in Poland. Regardless of your income level, the Poland government will take a 19% cut of your income from freelancing every year. To file your taxes, you must use either a PIT-36 or a PIT-37 form.
In addition to paying personal income tax on your earnings, you are responsible for paying duties on any goods that you sell in foreign countries. Depending on the country and the types of goods sold, this tariff may range from zero to almost 400%. There is also a 5% import tax and a varying excise tax if you sell luxury products.
Health Insurance Contributions for Freelancers in Poland
Health insurance is available to all citizens as well as foreign residents in Poland through the National Health Fund, or NFZ. This is administered through the Ministry of Health of Poland. To participate in this insurance plan, you will be responsible for paying 37,80 PLN monthly. You can conveniently apply for NFZ benefits by providing a completed application form, a copy of your passport and other related proof depending on your status as a citizen, foreign resident or student.
Once you have completed the registration process for NFZ, you will have full access to all of the benefits offered through the NFZ. The many benefits include prescription medications, dental care, physician care, hospitalizations, in-patient treatment, specialized care and more.
VAT Rate for Freelancers in Poland
In Poland, freelancers are required to pay VAT on the goods that they sell. This value-added tax specifically applies to both goods and services provided to clients and customers in Poland. It also applies to goods that are both imported and exported to countries inside and outside of the European Union. The standard VAT rate is 23%. However, there are some rules for a VAT exemption and a reduced rate. The reduced rates are 8% and 5%.
Tracking VAT due and paid in Poland can be a significant chore. After all, there are various rules and rates related to the application of VAT. One of these rules is to create invoices for each good or service sold.
How to Create Invoices as a Freelancer in Poland
Are you wondering how you can comply with the VAT invoice requirement? You will need to prepare a detailed invoice that has several key details on it for each transaction that you complete, and you will need to keep your invoices filed away for several years. All of your invoices should be sequentially numbered, and they should include the name and address of the seller and the buyer. They also need your VAT registration number, the VAT tax rate or the reason for the exemption and the amount of VAT tax paid. Transaction details, such as the date, the item purchased and the cost of that item, are also required.
Some freelancers in Poland prepare their own invoices manually, but this takes a considerable amount of time. Others take advantage of a VAT invoice template. Perhaps the fastest and easiest way to keep up with this VAT requirement, however, is to take advantage of Xolo Leap. In addition to helping you launch your EU online company, Xolo Leap also enables you to keep track of your finances, get paid via payment gateways, report taxes and issue invoices with VAT rates added automatically.
7 Steps to Register and Open a Freelance Business in Poland
Freelancing in Poland comes with impressive benefits that you understandably want to start taking advantage of as soon as possible. However, several steps require your attention before your business will be up and running. These steps include:
- Apply for a freelance work visa in Poland.
- Apply for a PESEL for the right to work in Poland.
- Register with the CEIGD. By doing so, you will obtain a certificate of registration as well as REGON and NIP.
- Sign up for NFZ through the Ministry of Health of Poland.
- Set up a business bank account in Poland.
- Register to pay VAT in Poland.
- Set up your business’s financial management system and invoices, such as by using Xolo’s services.
Did you know that you do not have to be located in Poland to start a freelancing business in this country? Xolo Leap is a special product that enables you to use e-Residency to create your Estonian business from any location. You can also take advantage of its intuitive business management features for streamlined operations.
Become and Work as a Freelancer in Poland
When you freelance in Poland, you will have greater control over your professional career. For example, you can pick and choose your clients and customers, set your compensation rate and even adjust your work hours to suit your personal needs. While freelancing in Poland comes with incredible benefits, you must first register to live and work in the country.
Learn More Today!
You could go through the motions of setting up your business as a freelancer on your own, or you could simplify the process. At Xolo, we believe that all freelancers should be able to start working in Poland without a hassle, and we are thrilled to support you in your efforts through Xolo Leap. Get your freelance business up and running today!
