How to become a B2B contractor in the Polish IT sector

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During the last couple of year Poland has emerged as a great place to do business for those looking for new markets in Europe, and as a good place to relocate, for those looking for a fresh start abroad.

We have previously mentioned in our other blog posts, that foreigners have a number of possibilities to conduct business activities here in Poland, depending on their country of origin.

In this article we would like to take a closer look at the Polish IT sector, and give a couple of tips for those looking for a Polish IT company to work with.

Getting a programming job in Poland

First and foremost, if you are an IT specialist, you are in luck, as there’s a huge shortage of IT workers across the country. The fast-growing economy is creating higher demand for programmers, app developers, and web designers.

Unfortunately, there’s a potential problem just around the corner. It’s called B2B. This is probably old news for immigrants currently residing in Poland, but it may come as a surprise for those, who are considering moving here.

So if you are an IT specialist, finding work is not hard, but be prepared, that most companies will expect you to sign a B2B contract with them.

What is a B2B contract, and how do they work

B2B contract or a “business-to-business” agreement is what they call a traditional Service agreement here in Poland, when it’s used:

  • between two legal entities (such as LLCs) or
  • between a legal entity and an individual entepreneur (sole trader).

What it basically means is that rather than being your employer, the IT company will be your Client under such contract. At least from the legal point of view.

As for you, then rather than being an employee under a standard type of an employment contract, you are going to be offering your services as a Contractor.

Long story short: IT companies prefer dealing with IT specialists, who are registered as individual entrepreneurs here in Poland.

Given that working remotely is the new standard in this area of work, Polish IT companies have been switching en mass to this type of cooperation with their de facto employees.

Okay but what does it mean for your average Joe? Well, for starters there are several benefits to this solution, the most important being money itself.

You see, in accordance with the applicable labour Law, companies have to incur huge labour costs. Lower costs means, the salary they can offer you may be substantially higher.

The main downside is that, under such contracts, you are the one in charge of taxes (PIT), social security obligations (ZUS), which would otherwise be a typical employer’s obligation.

Okay, but where’s the catch?

Being a sole trader in Poland

The biggest problem is that if you come from a non-EU (EEA) country, you are out of luck, because you cannot be registered as a sole-trader or as it is called in Polish — działalność gospodarcza.

When it comes to conducting business activities in Poland, under the current Law, there’s a number of possibilities available to non-EU foreigners, unfortunately registering sole trader business is not one of them.

Are there any exceptions available? In theory, yes there are. In accordance with the current Polish law, there are some exceptions for:

  • Polish students,
  • refugees,
  • EU card holders,
  • Pole Card’s holders (a document confirming your ancestors were of Polish origin)
  • Polish permanent residents,
  • plus a couple of others such as human trafficking victims.

But as you can see, those are usually limited to those currently residing either in Poland or at least in a different EU country.

If Poland is a place for a fresh start for you, and you are not a citizen of any of the neighbouring EU countries, your chances of being the exception are unfortunately quite slim.

residence-permit-eu-citizensresidence-permit-eu-citizens

If you are a EU/EEA citizen of course, then it’s a different story for you.

So if you are, let’s say, a British citizen (yes, despite the whole Brexit thing) or you come from Latvia or Estonia, then we got some good news for you.

You can provide business activities on the same terms as Polish citizens.

That includes the ability the ability to register your own sole trader business in the appropriate register — CEIDG, and obtain the tax number required for invoicing purposes — NIP.

Okay, but let’s get back to those who aren’t EU/EEA citizens. Is it a dead end?

Well you if your resume is outstanding, you may convince the IT company you are negotiating with to review their policies and make an exception for you.

The downside is that your salary is probably gonna be lower than it might have been if you were able to set up a sole proprietorship.

We are not trying to discourage you, but the vast majority of companies would have to decline, however there’s always a chance, so you can always try negotiating.

Virtual company as an alternative

The other solution is to register a virtual company, and provide services as member of our business incubation programme. Think of it as an alternative to both LLC and and being registered as a sole-trader. 

This solution is available to anyone without any particular restrictions, so for both EU and non-EU citizens.

After having set up a virtual company with us, you will be able to provide services as a legal person registered in Poland i.e. you will meet the requirements needed to work with any Polish IT as a B2B contractor.

Each virtual company or “virtual project” as we usually call it will be assisted by a professional accountant and a financial advisor. You don’t have to worry about doing the taxes and social contributions we mentioned above all by yourself.

The same goes for your B2B contracts. If you are not familiar with legal clauses, and would like to actually know what you are signing, and the expectations imposed on you as a party involved — worry not.

Each virtual project is supported by a legal department as well. They will be the ones dealing with your contract and your Client if needed.

If you are worried you won’t be able to obtain residence permits for yourself and your family alike, should you choose to set up a virtual company, then you shouldn’t worry.

You will able to obtain the said residence permits without any problems, provided that your salary is sufficient to cover your and your family’s expenses.

To sum it up:

  • you are an EU citizen, you can register a sole trader business;
  • you are a non-EU citizen — virtual company is the way to go (if being employed under traditional employment contract is not possible);

We hope our tips were useful.

Stay sharp.

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