Are you a business owner or investor based in Europe, looking for using tax efficient jurisdictions to structure your business and investments?
Maybe you have heard of offshore jurisdictions or the conventional ‘tax havens’ and are considering if it’s the right strategy to use these countries for tax planning.
Actually, the solution might be much closer than you think.
If you can find a country right in the heart of Europe, with a stable legal system, which can provide you more or less the same tax benefits, would you consider establishing a holding company in such a country?
Well, that is exactly what Poland offers.
Why wander in far-off locations when good solutions are right in front of you?
With ease of access and high cost efficiency, Poland offers a great alternative to the classic “tax haven” jurisdictions. How? Let’s look at this in a little more detail.
Poland has recently had a slew of amendments in taxation, referred to as the “Polish Deal”, which make it a very attractive jurisdiction from a tax perspective. The amendments have established a preferential system of taxation of holding companies, such as a Polish Limited Liability Company ( Polish: Spólka z ograniczona odpowiedzialnoscia or Sp z o o).
The preferential system is available for a Polish holding LLC which has tax residency in Poland and which directly holds at least 10% shares in the capital of the investee company. If this condition is met, the Polish holding LLC can avail of exemption from taxation for 95% of the dividends received from the investee company. Let’s look at how the tax benefits work out with an example of a dividend of EUR 100,000 from one or more investee companies.
|Amount of dividends to be declared||EUR 100,000|
|Amount of dividends which will be taxed (95% are exempt)||EUR 5,000|
|Corporate tax applicable on dividend income (at the rate of 19%)||EUR 950|
|Effective tax on the dividends (950 / 1,00,000)||0.95 or 1%|
In addition to this, the disposal of the shares held in the investee entities is fully exempt from tax, which means that if you are building an entity to sell, your holding company will not be taxed on the transfer of those shares too.
In addition to taxation, there are other advantages too.
Ease of access and handling
Being based in the heart of Europe, Poland is easily accessible from other countries. The digitalisation of the processes makes it possible to move things faster, thus saving time on both counts.
Poland delivers greatly in terms of the ease to incorporate and manage the business from outside of Poland, compared to the cost incurred in establishing a Polish holding LLC. The price-performance ratio is much better than other traditional jurisdictions.
We at LTC Business Services, have advised many business owners and other clients on the establishment and the effective use of holding companies in Poland. With us by your side, you can expect clear guidance and smooth sailing through the processes, even when you are not resident in Poland.
Read more about more about Poland at https://ltcbs.eu/poland/
Contact us today to establish your holding company in Poland and derive these great benefits!