Employment of foreigners is time-consuming and entails a number of costs and obligations. Many companies circumvent the regulations on employment of foreigners by establishing limited liability companies in which they acquire shares. Foreigners working for such companies receive remuneration which is not subject to social security contributions or tax in Poland. 

This is permitted by the provisions of the Commercial Company Code, however, what is of key importance, is that the shareholders are required to actually provide recurring performances to the company. Working for the company’s clients, discharging a function in its governing body or providing continuous performance, e.g. renting an office, may not be included among them. However, such performances may include advisory services, recruitment of new employees or delivery of goods. 

Application of the provisions of the Commercial Company Code in similar cases may be treated by the state authorities (especially Border Guards and State Labour Inspection Service) as circumventing the regulations on employment of foreigners. This, in turn, may lead to charging the persons organizing such “work” with a number of criminal allegations – illegal entrustment of work to foreigners, infringement of employee rights, failure to report data to the Social Security Institution and concealing the tax base. Therefore the use of this scheme requires a detailed analysis and actual linking of the foreigner’s shares in the company with the performances provided by them to the company. Otherwise, if such link is only “on paper” the organizer of the scheme expose themselves to serious legal consequences. 
 

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