Tax Consultant at RSM Poland
You want to scale your business and you need more staff? Or perhaps you are planning to launch a new business project and are looking for employees with specialist expertise and unique competences? Are you wondering how to find new human resources necessary to meet your business assumptions? Hiring foreigners may be the answer to your needs.
In this series, we will present employer’s obligations resulting from the employment of a non-Polish national. We are going to discuss foreigner’s arrival and stay, employment, as well as tax and insurance obligations involved in this employment. This way, showing you that hiring foreigners in Poland is by no means an uphill struggle, we will make you familiar with procedures and formal requirements that simply must be observed.
Who is considered a foreigner?
Any person who is not a Polish national is considered a foreigner. For the purpose of our analysis, foreigners shall be divided into:
- citizens of the European Union (EU) and the European Economic Area (EEA), i.e. Iceland, Norway, Lichtenstein, and Switzerland;
- third-country nationals, i.e. citizens of non-EU and non-EEA countries.
Hiring citizens from the first group, including all aspects of their arrival, stay and getting a job in Poland, is a less complicated procedure than hiring third-country nationals. The arrival of third-country nationals in Poland itself involves some additional obligations; in most cases, they need a visa.
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Visa or another residence document
For third-country nationals, crossing the border and later staying on the territory of Poland requires a visa or another residence document. The exception here are citizens of countries with which Poland has a visa-free travel regime. It is the foreigner’s obligation to get a visa. However, it’s the employer’s obligation to verify whether the foreigner is staying in Poland legally and in line with the purpose defined in the visa. The document submitted to the employer for verification must be valid and up-to-date. If you hire a foreigner on the basis of a contract of employment, the employer is obliged to keep the visa or another residence permit in the employee's personal file. If you conclude a civil-law agreement with a foreigner, the employer shall keep the visa or another residence permit in the employee’s personal file throughout the entire term of work.
However, if a foreigner applies for a visa to work, he or she must submit the following documents to the consulate:
- a work permit received from the future employer (if required) or
- written employment intention letter from the employer, if a work permit is not required.
A work visa is issued for a period of stay indicated in the work permit or an employment intention letter. It should be noted, however, that this period cannot be longer than expected for the visa type concerned.
A third-country national who wishes to stay and work on the territory of Poland for a period longer than provided for in his or her visa, should obtain a residence permit. Such a permit is issued by a province governor competent for the foreigner’s place of residence and granted for a period necessary for the purpose of the stay of the foreigner on the territory of Poland, yet not longer than 3 years.
The visa purpose is indicated on the visa sticker and may be the following:
- 04 – performance of business activity;
- 05 – performance of work by a foreigner for a period of up to six months during 12 consecutive months, on the basis of an employment intention letter registered with the district labour office;
- 06 – performance of work on the basis of documents other than an employment intention letter, e.g. a work permit.
Time for penalties
The entity (employer) entrusting work to a foreigner without a valid residence document may be subject to quite severe sanctions, namely:
- fine from PLN 1,000 to PLN 30,000;
- restriction of liberty or imprisonment of up to 3 years;
- foreigner’s salaries and contributions paid by the employer may be excluded from tax deductible costs;
- the entity hiring a foreigner may have denied access to funds from structural funds, the Cohesion Fund and the European Fisheries Fund or funds for the Common Agricultural Policy – for a period from one to 5 years;
- the entity may be obliged to return the amount equivalent to the aforementioned public funds received over a period of 12 months before the date of judgement or ruling to the State Treasury;
- the entity may be excluded from public procurement procedures for a year after the date the ruling becomes final and binding.
Exemption from liability
If an entity that hired a foreigner has fulfilled all the following conditions:
- prior to commencing work, they demanded the foreigner to furnish a valid document under which the holder is entitled to stay on the territory of Poland;
- they keep a copy of this document throughout the entire period of work performed by the foreigner (unless they knew that the presented document was forged);
- they registered the foreigner for social insurance purposes, provided that such obligation results from the legislation in force;
they shall not be subject to a penalty for an offence and crime consisting in hiring a foreigner without a valid document permitting him or her to stay on the territory of Poland.
In the next article we are going to discuss whether hiring a foreigner being an EU or EEA national is actually less complicated and whether the employer may face penalties for any failure to follow this procedure. A slightly different perspective on hiring employees and employer’s obligations in Poland is presented in our post Polish and German Business Cooperation (part 4). Hiring Employees in Poland.
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