Detailed Guide to Employer of Record (EOR) vs. Entity Establishment in Poland

Poland has emerged as a top hiring destination in Central Europe, thanks to its growing tech sector, strategic EU location, competitive costs, and highly educated workforce. But for companies seeking to hire in Poland without prior local experience, understanding labor regulations and compliance obligations is essential. Businesses typically choose between two models: hiring through an Employer of Record (EOR) or setting up a local legal entity. This guide compares both options to help you decide the best approach for your global expansion into Poland.

Table of Contents

• Introduction to Remote Hiring in Poland
• EOR vs. Setting Up an Entity in Poland
• Factors to Consider When Choosing EOR or Entity Establishment
• Why Time to Market Matters in Poland
• Cost Implications of EOR vs. Entity in Poland
• Compliance and Legal Exposure in Poland
• Setting Up a Legal Entity vs. Using EOR in Poland
• Switching from EOR to Entity in Poland
• Choose Asanify for EOR in Poland
• FAQs

Introduction to Remote Hiring in Poland

Poland is home to a thriving digital economy, EU-aligned regulations, and strong English proficiency in tech and service roles. Cities like Warsaw, Kraków, and Wrocław have become global hubs for developers, designers, finance professionals, and remote support teams.

However, foreign companies face challenges when hiring in Poland, such as:

• Complex labor laws favoring employees
  
• Mandatory social contributions and benefits
  
• Local language documentation and compliance
  
• Multi-level taxation (PIT, ZUS contributions, health funds)
  

To address these, companies can either:

• Establish a legal entity (e.g., sp. z o.o.) in Poland
  
• Use an Employer of Record (EOR) to legally employ on their behalf
  

Both models offer access to Poland’s talent, but differ in cost, speed, risk, and operational complexity.

EOR vs. Setting Up an Entity in Poland

An Employer of Record acts as the legal employer for your Polish workforce while you manage day-to-day operations. The EOR handles employment contracts (in Polish), payroll, income tax, ZUS contributions (social security), and labor compliance.

In contrast, entity establishment involves forming a subsidiary such as a limited liability company (sp. z o.o.), which allows full control but requires substantial local setup and ongoing legal oversight.

Factors to Consider When Choosing EOR or Entity Establishment

When entering the Polish market, companies must carefully evaluate which hiring model suits their business goals. Here are the key factors to consider:

Speed of Hiring

Speed is often one of the most important factors for companies expanding into new markets.

• EOR: Hiring through an Employer of Record in Poland typically takes just 7–10 business days. The EOR already has a registered entity, established HR infrastructure, and local compliance expertise. This enables rapid onboarding with minimal delays, perfect for companies needing quick access to Polish talent.
  
• Entity Setup: Forming a legal entity in Poland—usually a sp. z o.o. (limited liability company)—can take 1 to 3 months. This timeline includes preparing incorporation documents, registering with the National Court Register (KRS), applying for a VAT number, and opening a Polish bank account. During this period, no employment activity can legally begin, potentially delaying your market-entry strategy.
  

Short-Term vs. Long-Term Goals

Your strategic hiring objectives should influence whether to choose an EOR or entity establishment.

• EOR: An Employer of Record is well-suited for short- to mid-term goals such as market testing, setting up a project-based or remote team, or hiring only a handful of employees. EORs offer flexibility and low commitment while ensuring full legal compliance.
  
• Entity: If your company plans to open a permanent office, build a long-term research and development team, or engage in extensive hiring, setting up your own legal entity in Poland offers full operational control. It’s ideal for companies seeking to create intellectual property locally or manage business processes directly from within the country.
  

Administrative Overhead

Running operations in Poland comes with administrative tasks that vary significantly depending on your hiring model.

• EOR: EOR providers manage all administrative responsibilities, including drafting employment contracts in Polish, payroll processing, income tax withholdings, ZUS (social security) contributions, and regulatory filings. They act as your local HR and legal extension, reducing the internal resources needed on your end.
  
• Entity: Managing a legal entity requires more hands-on involvement. You will need to hire or contract local accountants, HR managers, and legal consultants to navigate Polish labor laws, tax regulations, and payroll. This increases your cost, overhead, and legal exposure.
  

Why Time to Market Matters in Poland

Poland is recognized as one of the fastest-growing economies in the European Union, attracting significant foreign investment and global companies looking to scale. Time to market can make or break your expansion strategy.

Delays in hiring can:

• Push back key product development or client delivery timelines
  
• Lead to missed revenue opportunities or tender deadlines
  
• Result in the loss of top Polish candidates to competitors
  
• Increase dependency on costly contractor arrangements or freelancers
  

Using an EOR enables you to:

• Onboard employees in a matter of days
  
• Establish a compliant and immediate presence in Poland
  
• Avoid the paperwork and red tape associated with forming a new entity
  
• Mitigate risks by leveraging the EOR’s legal infrastructure and in-country HR team
  

Cost Implications of EOR vs. Entity in Poland

Setup and Maintenance Costs

Understanding the total cost of employment is critical when choosing your hiring model.

Legal Entity Setup:

• You’ll incur notary and legal fees for registering the entity
  
• Register with the KRS (National Court Register), obtain a REGON (statistical number), NIP (tax ID), and VAT number
  
• A local corporate bank account is mandatory, often requiring in-person visits or local representatives
  
• You’ll also need to appoint a board of directors and may be required to deposit share capital
  
• Estimated setup cost: €4,000–€10,000
  
• Ongoing costs: Include monthly accounting, legal audits, payroll administration, and possible mandatory filings with Polish authorities
  

EOR Setup:

• No upfront legal costs or registrations
  
• Monthly per-employee fees: Typically range from €400 to €750 depending on role, benefits complexity, and location
  
• Taxes, payroll, contracts, and compliance filings are bundled into the service fee, offering predictability and lower administrative costs
  

Compliance Costs

Entity Approach:

• Requires drafting Polish-language employment contracts compliant with the Polish Labor Code
  
• Responsible for PIT (Personal Income Tax), ZUS (social security) filings, and the management of the Employee Capital Plans (PPK)
  
• Any errors in labor law or tax compliance can lead to inspections, penalties, or legal disputes with employees
  

EOR Solution:

• The EOR takes full ownership of compliance
  
• Automatically updates contracts and benefits based on national changes or regional labor agreements
  
• Manages sick leave, paid time off, maternity and parental leave, and remote work policies in accordance with Polish law
  

Compliance and Legal Exposure in Poland

Polish employment law is employee-centric, and failure to comply can have serious legal and financial consequences.

Key labor requirements include:

• 26–33 days of paid vacation annually, depending on seniority
  
• Employment contracts must be in Polish and signed before work begins
  
• The maximum standard workweek is 40 hours
  
• Strict procedures for termination and notice periods
  
• Mandatory employer contributions to ZUS for health, pension, and accident insurance
  

Non-compliance may result in:

• Penalties from PIP (Polish Labor Inspectorate)
  
• Lawsuits for unlawful termination or contract violations
  
• Retroactive tax and benefit payments
  

With an EOR, all legal responsibilities are transferred to the provider, minimizing your company’s exposure while maintaining a strong employee experience.

Setting Up a Legal Entity vs. Using EOR in Poland

Legal Entity Steps

If you decide to establish a legal entity, you must:

1. Choose the appropriate legal structure (most commonly sp. z o.o.)
   
2. Appoint directors and prepare notarized articles of association
   
3. Register with the National Court Register (KRS)
   
4. Apply for a NIP (tax ID), REGON (statistical number), and VAT ID
   
5. Open a local bank account
   
6. Hire an accountant for ZUS and PIT reporting
   
7. Draft all employment contracts in Polish and enroll employees in the mandatory PPK scheme
   

EOR Path

With an EOR:

• You can hire within 1–2 weeks
  
• Receive fully compliant, Polish-language contracts tailored to role and location
  
• Have ZUS and PIT payments managed monthly
  
• Avoid permanent establishment risk and bureaucratic setup
  
• Ideal for companies without any Polish legal presence
  

Switching from EOR to Entity in Poland

Many companies begin with an EOR and later transition to an entity as their team and operations grow.

When to Switch:

• Team size exceeds 10+ full-time employees
  
• You’re opening a physical office or R&D unit in Poland
  
• You need direct control over intellectual property, employment structures, or invoicing
  
• You’re looking for long-term tax optimization or funding from local sources
  

Transition Steps:

1. Form your legal entity and obtain all registrations
   
2. Draft new employment contracts under your Polish entity
   
3. Transfer social security registrations for each employee
   
4. Inform relevant authorities and coordinate with the EOR for legal handover
   
5. Ensure there’s no disruption in salary, benefits, or tax compliance during the transition
   

Top-tier EORs like Asanify offer comprehensive assistance throughout this process, ensuring continuity and compliance.

Choose Asanify for EOR in Poland

Choose Asanify as your Employer of Record (EOR) partner in Poland to hire quickly and compliantly without setting up a local entity. Whether you’re onboarding one engineer in Kraków or a full team in Warsaw, Asanify simplifies the process with fully localized payroll, legally compliant contracts, and expert HR support. Our team has deep knowledge of Polish labor laws, tax regulations, and statutory benefits. We offer transparent pricing, rapid onboarding, and dedicated support to ensure a smooth hiring experience. Asanify empowers global companies to access top Polish talent while staying compliant and reducing the administrative burden of international hiring.

FAQs

Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant  or Labour Law  expert for specific guidance.