How much does it cost to start a business - the necessary information
Currently, there is a belief that in order to achieve something and gain financial stability, the best solution is to set up a company. The reality confirms this view, because most of the people who have earned something in life are entrepreneurs who started by making a decision to "go on their own". Regardless of whether the motivation to create your own business is dreams, necessity or curiosity, every starting businessman has to make several important decisions at the very beginning, which will determine the cost of setting up a business. How much does it cost to start a business?
Subject and legal form
At the beginning, the future entrepreneur must make a decision regarding the subject of his business. It is worth noting here that legal activity, the subject of which is consistent with the Polish Classification of Activities, may be registered. This is an important decision because it is often dependent on, among others, legal form and whether it will be necessary to register as an active or exempt VAT payer, but more on that later.
As for the legal form of business - you can choose between a sole proprietorship or a company. With a larger-scale company, the choice is more likely to be the latter. On the other hand, sole proprietorship is a classic model of running your own business - the owner is the boss himself, makes tax settlements, and is responsible with all his assets for the company's obligations.
An activity in the form of a company is chosen when more than one person is willing to run the company. There is a civil partnership or one of the companies listed in the Code of Commercial Companies - general partnership, limited partnership, partnership, limited joint-stock partnership, limited liability or joint-stock partnership.
It is also possible to change the form of business already during its operation, but it is worth knowing at the beginning what will be more profitable to avoid unnecessary formalities and problems. In this article, we will focus on the costs of establishing a company in the form of a sole proprietorship.
Cost: PLN 0
Registering your own company is not difficult - in the case of a sole proprietorship, it is necessary to enter it in the Central Register and Information on Economic Activity. This is done by completing the CEIDG-1 form, which is also an application for entry into the national official register of national economy entities (REGON), an identification or update application to the head of the tax office (NIP), a declaration on the choice of the form of personal income tax.
This application also constitutes a notification or a change in the notification of the contribution payer to the Social Insurance Institution or a declaration on continuing social insurance for farmers.
Entry in the Central Register and Information on Economic Activity takes place by filling out an electronic form and is completely free. The only requirement when submitting the application is a signature. It can be:
- electronic (available for purchase from one of the five companies involved in this),
- with the help of the so-called "Trusted profile" - such a profile can be created on the website www.epuap.gov.pl - it requires a one-time visit to the office for confirmation, the service is free,
- handwritten and personally submitted to the commune office.
It is also possible to sign the application manually and send it by registered mail, but then the signature must be notarized.
For comparison, in the case of commercial companies, it is necessary to obtain an entry in the National Court Register - the cost of such an operation is PLN 500 of the court fee and PLN 100 for the publication of the first entry in the Court and Economic Monitor.
Cost: PLN 0
Establishing a company and the issue of tax on goods and services
Entrepreneurs who want (or must) be VAT payers are required to submit a registration application to the head of the competent tax office using the VAT-R form. This obligation also applies to EU VAT taxpayers.
Until the end of 2014, the head of the tax office charges a stamp duty in the amount of PLN 170 for issuing a confirmation of registration of a VAT payer as an active VAT payer or an exempt VAT payer.
Registration for VAT purposes has been free since 2015. Additionally, the obligation to obtain confirmation of the registration application has been abolished. However, if the entrepreneur wants to apply for such a confirmation, he will be obliged to pay a stamp duty in the amount of PLN 170.
Cost: PLN 0
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Application for insurance
Despite completing the already mentioned CEIDG-1 application, the entrepreneur is obliged to pay an additional visit to the Social Insurance Institution. This is due to the fact that the above-mentioned form is used to register the owner of the company as a payer of social security contributions, but it is not used to register as an insured person. For this purpose, the entrepreneur is obliged to submit:
ZUS ZUA - if it will pay both ZUS and health contributions,
ZUS ZZA - if it will only pay health contributions (due to the combination of benefits, e.g. for simultaneous full-time work).
Notifications to the Social Insurance Institution should be made no later than 7 days from the date of registration of business activity. The term covers both working and non-working days. If it would end on a Saturday or a public holiday, the report can be made the next working day.
The above-mentioned activities do not require the payment of any additional fees.
Cost: PLN 0
It may turn out that the selected object of activity is subject to the obligation to obtain a license, concession or entry in the register of regulated activity issued by state authorities. These are the so-called regulated activities, for which one should take into account the necessity to incur additional costs for issuing the appropriate permit.
An example of a rationed activity is having a taxi or a shop selling alcoholic beverages.
Cost: depending on the type of business
Additional permits and certificates
It is worth remembering that for each visit to the tax office, in order to issue any additional consent or certificate (e.g. about no criminal record), the entrepreneur will be obliged to pay a stamp duty of an appropriate amount.
When trying to set up a company, it is worth knowing at the very beginning what activities in the legal and tax field will be necessary, what should be done first, what you need to obtain consent for, whether you will need to obtain a certificate, license, etc. Help in this matter is provided by the e-harmonogram.pl portal, which will help future entrepreneurs in planning the formal and legal path and estimating the costs of setting up a specific business.
Cost: PLN 30-50 (for consent / certificate)
Although Polish regulations do not require a stamp from entrepreneurs, the vast majority of companies decide to make it at the very beginning. It often turns out to be indispensable for running a business or required by contractors. It is worth providing the company with a stamp, the more so as it is not a high cost - it should not exceed PLN 30.
Cost: PLN 30
Corporate bank account
Every entrepreneur must have a bank account - it is necessary, for example, for settlements with the tax office or the Social Insurance Institution. However, the law does not require a special settlement account. An entrepreneur may use a private account, however (depending on the number of business transactions) it is worth considering what will be a more convenient solution. Each of them has specific advantages and disadvantages, and it is up to the entrepreneur to decide which one to choose.
Using a private bank account will definitely save you money. Setting up a special company account is associated with additional fees - from a few to a dozen or so zlotys (although there are also offers of free account opening for the company). Maintaining a private account is also cheaper than a company account - in the second case, you should take into account the costs of 30 to even 200 PLN per month. However, such a solution allows for clear settlements with contractors - private transactions do not mix with company ones, which may turn out to be particularly important during a tax audit.
Cost: PLN 0-200 (depending on the bank's offer)
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Other Additional Fees and Expenses
Of course, depending on what activity the entrepreneur decides on, whether he has adequate premises and equipment, setting up a company will involve costs at a different level. The above-mentioned fees result from statutory provisions or common law (e.g. a stamp). However, the entrepreneur should take into account the need to incur other costs, for example related to the purchase or rental of premises, accounting costs, costs of purchasing machinery and equipment and other necessary office supplies.
There are also situations when the entrepreneur purchases goods for the established company before its registration. This is an additional cost that will require an initial inventory.
Cost: as needed
Summing up, the cost of setting up a business depends on many factors, but the basic activities that the future entrepreneur is obliged to perform are not burdened with very high fees (the only cost of registering a "normal" business relates to registration for VAT purposes). It is therefore possible to set up a business without incurring any costs. It is also worth noting that all expenses related to setting up a business will be tax deductible costs, which (depending on the selected form of taxation) the entrepreneur will be able to deduct from income, thus reducing the tax base.