Virtual office - several activities under one address

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Starting your own business in Poland is not easy, and it certainly is not cheap. A young entrepreneur may not have any client yet, and he is already obliged to pay monthly social security contributions (in 2019 - PLN 555). Moreover, a seat is also needed. If the entrepreneur cannot afford to rent an office, he can register the activity in his own apartment. If he does not have such a property, a problem arises, as landlords are very (very) reluctant to agree to run a business in their apartments. In such a situation, the entrepreneur may try to register his activity together with other entrepreneurs in a similar situation, in the premises rented for this (and thus reduce costs) or use an institution, which is a virtual office.

Virtual office is a fairly fresh "product" on the Polish market, not yet known to everyone. Although the name "virtual" may be associated with "unreal" or made for appearances and thus scare you away, there is nothing to fear. Such offices are completely legal, and the better (and more expensive) ones are able to meet the expectations for activities in which professional secrecy is the overriding issue (e.g. attorney-at-law, attorney-at-law or bailiff). Of course, you should be aware that the registration of several activities under one address will not be possible without fulfilling the formalities required by law. When is such registration allowed? What are virtual offices? Is it worth using such a service? We will answer these questions in this article.

When is it possible to register several business activities under one address?

As can be seen from the introduction to this article, there are no reasons why several business activities should be registered at the same address. However, for this to be possible, each of the entrepreneurs must have a legal title to the real estate. It does not have to be property, it may well be rental or lending.

The rental and loan institutions are regulated by the Civil Code Act (hereinafter referred to as the Civil Code). Pursuant to Art. 680 of the Civil Code in connection with joke. 659 of the Civil Code, the landlord undertakes to give the tenant the premises for use for a fixed or indefinite period of time, and the tenant undertakes to pay the landlord the agreed rent. On the other hand, the provision of Art. 710 of the Civil Code provides that by the lending agreement, the lender undertakes to allow the taker, for a specified or indefinite period of time, to use the item (premises) given to him free of charge. The loan is free of charge. Thus, the above-mentioned institutions are distinguished by the fact that the rental is associated with the obligation to pay the rent, while the loan is free.

The lending agreement concluded between immediate family members is very beneficial for the borrower, because the provision of art. 21 sec. 1 point 125 of the Personal Income Tax Act exempts from tax lending between members of the immediate family (persons included in tax groups I and II).

What is a virtual office?

Virtual office is a service consisting in renting an entrepreneur a place of business - an address and a mailbox, provided by a company with office space and personnel facilities to support the office. Thus, this office is virtual only in name, in fact, as part of this service, the entrepreneur's "office" matters are handled by the service provider.

Employees of the virtual office will accept the entrepreneur's correspondence, informing him immediately about the possibility of receiving it or viewing it. At the request of the recipients, they can also archive it. Moreover, if necessary, they scan the letters and send them to the client's e-mail address. They can also accept applicants at the headquarters.

This is not the end of the possibilities offered by virtual offices. Larger companies offering this service provide the entrepreneur with a landline number intended for him and act as a secretariat, answering his calls or redirecting calls to the recipient, if necessary. What's more, these companies provide conference rooms where the entrepreneur can make an appointment with the client, and even offer the possibility of renting an entire office room exclusively.

Is such a business system legal?

Along with virtual offices in Poland, there were questions whether registration of the company's seat in such a place is possible, and if so, whether it is entirely legal. As previously emphasized, there are no obstacles to register another activity at the address provided by the virtual office. Thus, registration of the seat is fully compliant with the currently applicable law, as long as the company running the virtual office is the owner of the property in which it runs the service or has the consent of the owner of the premises to sublet it to third parties.

Despite the above, choosing a virtual office will not always be a good idea. Registration is one thing, but running a business is another topic. There are types of activities that, due to their nature, will not be suitable for conducting in such a virtual office. A lot also depends on the type of services offered by the e-office rental company and what it offers. And so, as an example, you can take commercial companies that, in order to be able to operate in a virtual office, must be able to rent a conference room and an office room, because according to the interpretation of the Director of the Tax Chamber in Krakow, the company can freely choose the place of its seat, however, it must be the actual seat. Thus, it is not enough to rent an office dedicated only to receiving correspondence. The company's board of directors must have a place where it can conduct board meetings. Also, companies conducting activities requiring special confidentiality and caution in dealing with clients must carefully choose virtual offices. In the case of, for example, legal professions, the entrepreneur (attorney, legal advisor) must ensure that the company running the e-office is able to provide him with an individual office room, a conference room, as well as an armored cabinet in which he will be able to keep his files. customers.

Bearing in mind the above, it should be stated that if the type of activity allows it, and the company running virtual offices is able to provide all the required amenities, the registration of the company's headquarters in the e-premises and running a business there is fully legal. This was confirmed by the Supreme Administrative Court in the judgment of 5 August 2014 (file reference: II FSK 3549/13), where it stated that:

"In the current realities of economic trading, taking into account modern technologies, management activities and business activities are and can be carried out anywhere, also with the use of the so-called virtual offices or coworking offices (shared) ".

Advantages and disadvantages of a virtual office

For most entrepreneurs (not only beginners), the main advantage of a virtual office is the price. Instead of paying the rent for renting their own office, which in a large city may exceed several thousand zlotys, the entrepreneur will spend from several dozen to a maximum of several hundred zlotys a month for renting an e-office - virtual offices in the center of Warsaw in "exclusive" class A office buildings cost up to PLN 500 per month .

Moreover, reputable companies that provide the type of services in question employ the entire staff of office workers, from assistants to accountants, who are at the disposal of the landlord. Of course, if the subscription does not include this type of service, using an assistant will be associated with an additional fee.

When it comes to running a business, you cannot forget about tax issues. The entrepreneur can fully save all expenses related to renting an e-office as tax deductible costs and thus reduce the calculated income tax. In addition, in the event of an inspection by the tax office, the landlord may take advantage of the experience of virtual office employees who, due to the nature of the work they perform, have frequent contact with the inspectors and know exactly what to expect from such an inspection.

Another advantage is the fact that the leaseholder of a virtual office does not have to worry about buying office equipment, i.e. furniture, computer equipment, a multifunction device or a projector.

For some enterprises it is also important that the majority of companies with virtual offices are based in the centers of large cities. This has a large impact on the "prestige" of the enterprise using the virtual office, because such a location of the seat has a positive effect on the perception of the company by contractors and customers.

Of course, there are also downsides to using a virtual office. One of them is the obligation to pay extra for each additional service that is not included in the subscription. So, if it turns out that in a given month the entrepreneur has to hold more meetings with clients, use the conference room extensively or use the knowledge of office employees, e.g. in the matter of tax, the monthly fee may increase several times from the above-mentioned several hundred zlotys.

What's more, the virtual office has specific working hours, which also limits the possibility of using it. In such cases, the landlord's non-standard working hours or evening meetings with clients will be a great obstacle in using the e-office.

It is also not stated that the current favorable jurisprudence of administrative courts will not change in the next years. Tax offices from the very appearance of the service in question on the market try to curb the activities of virtual offices. There are still cases that they refuse to register a business in a given e-premises or make it difficult for entrepreneurs renting virtual offices to assign a tax identification number, i.e. NIP.

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Virtual office - summary

Answering the questions at the beginning of the article, it should be stated unequivocally that the registration of many business activities under one address is completely legal. Depending on the type of business, there may of course be smaller or larger problems when sharing an office with other companies, so before deciding to combine several activities in one place, you should think carefully and take into account all the circumstances that may give the tax office an excuse to control or impose a penalty.

So if there are no obstacles to registering several companies in one place, the entrepreneur has the full right to use the virtual office. When choosing a specific service provider, however, it is worth getting acquainted with the legal title of the company running e-offices for the rented premises - if the company owns the property or has the consent of the owner of the premises to sublet it to third parties, such a virtual office is fully legal. However, in order to minimize all risks, you should choose only large and experienced companies with a rich history of providing this type of service.